UC Berkeley Study Touts Benefits of a California Feed-In Tariff

Enacting a robust feed-in tariff (FIT)
in California to achieve the state’s 33% Renewables Portfolio Standard
(RPS) would create three times the
number of jobs, over 2 billion in additional tax revenue, and stimulate
tens of billions in new investment, according to a new study conducted by the University of California, Berkeley.

Furthermore, the adoption of a comprehensive FIT will cost-effectively fulfill California’s 33%-by-2020
goal on schedule.

Headed by Distinguished Professor of Energy Dan Kammen of UC Berkeley’s Energy and Resources
Group, the analysis examined the economic benefits of a FIT deployed in California to facilitate the
state’s effort to achieve the 33% RPS by 2020.

A FIT is essentially a fixed price, long-term contract for a
utility to buy electricity produced by renewable energy generators. The Berkeley study specifically
examined a FIT that would be available to solar projects up to 20 megawatts (MW) in size.

Professor
Kammen and his colleague Max Wei studied the impact of such a FIT on employment, tax revenue, and
investment compared to current RPS scenarios being modeled by California regulatory agencies.
The study’s key findings include that three times the number of jobs will be created if a FIT is enacted to
complement the RPS. This translates into roughly 280,000 more clean energy jobs over the next decade, or an
average of 28,000 jobs per year, with more jobs created in the early years because wholesale distributed
generation (WDG) projects can come online quickly.

Another key finding includes over $2 billion in
additional tax revenue for the state. Further, the study found that a comprehensive FIT would stimulate
up to $50 billion in new private investment in the state with the potential for those renewable energy
projects to be eligible for another $15 billion in federal tax benefits.

“The economic benefits are clear. A FIT policy that is sized to the
state’s RPS goals would produce significant distributed renewable energy generation growth across
California–creating jobs, attracting investment and helping alleviate state budget issues. These key
results should be carefully considered by policymakers across the political spectrum,” said Kammen.

Commissioner Jeff Byron at the California Energy Commission reviewed the study and said, "I
hope my colleagues at the CPUC are persuaded to expand their previous FIT decision to 20 MW with
unlimited applications. As the UC Berkeley Study shows, job creation and capital investment
opportunities are compelling reasons to expand this renewable policy mechanism and require utilities to
implement FITs."

The report is available at the link below.