What is a Feed-in Tariff?

Feed-in tariffs are regulatory laws that require utilities companies to purchase electricity generated by renewable energy sources. The policy mechanism is designed to encourage the adoption of renewable energy sources and bring down the cost of these technologies.

In 1978, president Jimmy Carter signed one of the first examples of such laws by passing the Public Utilities Regulatory Policy Act (PURPA). The bill passed by congress as part of the National Energy Act regulates the way in which electric companies buy back power from independent generators. Although a federal law, PURPA’s implementation was left to the individual states due to the varied needs of different regions.

These were the first of many laws designed to help the average consumer obtain renewable energy technology like photovoltaic modules, wind generators, and micro-hydro systems. These laws have been known as many different names including Electricity Feed Laws, Advanced Renewable Tariffs (ARTs), Renewable Tariffs, and more recently Renewable Energy payments.

Germany took the lead in providing renewable energy incentives to its citizens throughout the early nineties, greatly supporting the solar power industry. They are currently one of the world’s top photovoltaics installer. Today feed-in tariff policies have been enacted in over sixty-three countries. California currently has the most comprehensive legislature for solar energy in the United States.