Vermont Establishes Feed-In Tariff for Renewables

Vermont is the first U.S. state to establish a full system of renewable energy feed-in tariffs.

Legislation went into effect at the end of business on May 27, 2009. 

H. 446 creates tariff rates for renewable energy based on the cost of
generation, plus a reasonable profit. Costs will be covered by
ratepayers. 

Several other U.S. states are considering similar legislation,
which has proven effective in boosting solar energy in Germany and Gainesville, Florida. The legislation is similar to Ontario, Canada’s Green Energy Act.

The program is capped relatively low, at 50 megawatts (MW). And
individual projects are capped at 2.2 MW. But the tariff levels are
generous–differentiated by technology and size.

The legislation also creates a specific tariff for small wind turbines
of less than 15 kW capacity. That tariff mandates payments of $0.20/kWh
to owners of grid-connected small wind turbines.

Other tariff levels include:

• $0.14/kWh for wind tubines larger than 15 kW
• $0.12/kWh for landfill and biogas
• $0.30/kWh for solar

Republican Governor James Douglas allowed the bill to become law without his signature, as is allowable by Vermont law.

In a letter summarizing his concerns with the bill, Douglas said he
supports the development of renewable energy, but believes the bill
"fails to recognize the current viability of renewable energy in a
competitive setting and will needlessly increase costs to Vermont
consumer so as to subsidize this one favored business sector." 

He said he would not veto the bill, because the Vermont Public Service
Board is required to revisit the rates within the next four months and
periodically thereafter to determine whether the prices are
appropriate.