After CSI,California shows Green Leadership again with an innovative Feed in Tariff-Reverse Auction Subsidy Scheme
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September 1, 2010California has been at the forefront of Green Energy Leadership in the USA with massive subsidy schemes.California Solar Initiative (CSI) implemented in 2007 for setting up 3000 MW of Solar Power in California by 2016 is the most ambitious Green Energy Program in the USA till now.More than 46000 installations have been done in this program accounting for more than 50% of USA’s Solar Energy Capacity till now.This program was unlike the successful FIT programs implemented in Europe.CSI provided for cash grants to solar installations which was gradually stepped down after predetermined number of MW installations.Now California is trying to promote medium solar energy installations between 1-20 MW in size through another innovative scheme
FIT-Reverse Auction Solar Subsidy Scheme is an Innovative One
Though California Public Utilities Commission (CPUC) has not completely given out the details for this program,this scheme seems quite innovative from the US perspective.This Scheme will help the State circumvent the FERC guidelines on setting up FIT by different State Governments.This Subsidy Program will involve a Reverse Auction Mechanism (RAM) every 6 months in which 250 MW of projects will be awarded to lowest bidders.Project Size can be between 1-20 MW for a total Project Capacity of 1 GW in the next 2 years.This Program will try to avoid the disadvantages of Feed in Tariff Schemes as it will introduce a Market Based Element into the Tariffs.However this project is still at a preliminary stage and will need a lot of fine tuning.Note similar scheme have been implemented in China and India as well.The Chinese 280 MW of Projects have seen cuthroat competition with loss making bids by State Owned Utilities.It remains to be seen whether California can make a success of this RAM Program where China has failed.Even India has reported a huge response for the JNNSM First Phase of PV Projects.The Success of this California program will be crucial as it might serve as a template for future programs by other states and the Federal Government.
California proposal could jumpstart U.S. solar market – EE Times
In one effort to jumpstart the market, the California Public Utilities Commission (CPUC) has issued a proposed decision to launch a new renewable incentive program in the state. This feed-in tariff (FiT) program will require investor-owned California utilities to purchase electricity from renewable energy systems between 1 and 20 MW in size. The so-called Renewable Auction Mechanism (RAM) feed-in tariff model addresses many of the challenges facing wholesale renewable energy policy in California and the U.S.
This proposed program stimulates activity by establishing a market for smaller to mid-size (up to 20 MW) renewable projects that can be incorporated into existing utility distribution infrastructure.Last month, the Federal Energy Regulatory Commission (FERC) ruled that states do not have the authority to establish wholesale electricity rates that exceed utility “avoided costs.” The CPUC program overcomes this jurisdictional challenge. The CPUC proposal establishes a 1-gigawatt (GW) pilot program for power from eligible mid-sized renewable energy systems. The program requires California’s three largest investor owned utilities to hold biannual competitive auctions into which renewable developers can bid.
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