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Input tariff

Arnold Schwarzenegger, the Governor of California, is now following Germany’s example and introducing feed-in tariffs for small-scale solar power producers. In Germany both companies that build windmills and households with solar panels on the roof know exactly what they are going to be paid for the electricity they generate. The German government has ordered that electricity companies are obligated to both accept and to pay a set price for environmentally-friendly electricity. This makes it simpler to finance renewable projects.

The income for power producers is dependent on what kind of energy source produced the electricity. In Germany, for instance, solar power has been supported for many years by setting prices several times higher than the market price. Germany is one of few countries that has invested in support for solar energy, and is now responsible for almost half of the world’s solar-powered energy production. This has also given rise to a thriving solar energy industry and employment opportunities in the fields of research, building and installation of solar energy equipment.

By means of input tariffs (feed-in), governments can exercise a great deal of influence on the choice of technologies. With a feed-in system, the power producer’s income is secure, while the volume is dependent on how attractive this income is for the parties involved. In some countries, feed-in systems have yielded a far greater output (and therefore expense) than authorities planned, while the output has been smaller than expected in other countries because the subsidy has been too low.

Read more:
http://www.renewableenergyworld.com/rea/news/article/2009/04/south-africa-introduces-aggressive-feed-in-tariffs
http://greeninc.blogs.nytimes.com/2009/10/15/small-clean-energy-producers-get-a-boost/?scp=1&sq=Feed%20in%20germany&st=cse
http://fit.powerauthority.on.ca/