If domestic solar panels become as common on the plains and rooftops of the United States as they are abroad, it may be because the financing technique that gave Europe an early lead in renewable energy is starting to cross the Atlantic.
The idea is to pay homeowners and businesses cash for producing green energy. In Germany, for example, a homeowner with a rooftop solar system may be paid four times more to produce electricity than the rate paid to a coal-fired power plant.
Earlier this month, Gainesville became the first city in the United States to introduce higher payments for solar power, which is otherwise too expensive for many families or businesses to install. City leaders, who control their electric utility, unanimously approved the policy after studying Germany’s solar-power expansion.
Furthermore, Hawaii, where sky-high prices for electricity have stirred interest in alternative energy, hopes to have a similar policy in place before the end of the year. The mayor of Los Angeles wants to introduce higher payouts for solar power. California is considering a stronger policy as well, and bills have also been introduced in other states, including Washington and Oregon.
“I’m seeing it with my own eyes – it’s really having a good effect on our local economy, particularly in these hard times,” said Edward J. Regan, the assistant general manager for strategic planning at Gainesville Regional Utilities in Florida.
The surge of interest in the feed-in payment system is a recognition that despite generous state and federal incentives, the United States still lags far behind Europe in solar power. Germany, where feed-in tariffs have been in place since 1991, has about five times as many photovoltaic panels installed as the United States, though they still account for only 0.5 percent of electricity in that country.
Wind power and other sources of renewable energy are generally included in the European payment systems, but solar – as one of the costliest renewables – has benefited the most. Payment rates in Europe for wind are substantially lower than for solar, according to Christian Kjaer, chief executive of the European Wind Energy Association.
In the United States, solar panels remain prohibitively expensive – a major reason that the panels account for far less than one percent of electricity generation. Generating power from the sun using rooftop panels can cost four times as much as coal, the largest and cheapest source of electricity in the country.