Feed-in Tariffs

Germany produces half of the world’s solar power. That’s kind of funny seeing how cloudy it is there. This has been made possible because the German government restructured their Feed-in Law in 2000. A feed-in law or feed in tariff is a system where common citizens produce electricity with their own solar panels and sell it to the utilities. With the restructured law, people are guaranteed that their solar energy will be purchased by the utility companies for 20 years at a fixed price based on the production cost of solar at the time of installation. The price paid back to independent producers is set to reduce each year according to the expected cost reductions of solar panels. For instance theoretically if I put some solar panels on my roof in Germany in 2007, I would be guaranteed 53 cents for every kw I produced for 20 years. People can in fact turn a profit by taking out loans to buy arrays for their homes as an investment. One reporter that writes for Reuters made a blog entry detailing his extensive exploitation of this feed-in tariff system in Germany.
http://blogs.reuters.com/environment/2009/11/27/catching-rays-cutting-emissions/

This program has made electricity more expensive for German consumers; an increase of approximately 4 Euros a month. However, as more electricity is produced by solar panels, less needs to be produced by more traditional methods such as burning natural gas, this in turn decreases the demand, and therefore price of electricity. As the amount of relatively cheaper wind powered generators increases and the price of solar panels continues to decrease, the average price of electricity will continue to fall.

California signed into law a feed-in tariff program early in 2008 and amended it in Oct. 2009. Small energy producers- people with solar panels on their roofs- can enter into 5, 10, or 15 year contracts with the utility company to sell electricity to the grid. So hurry up, buy some panels, and sign up before the 750 megawatt combined statewide cumulative capacity fills up!