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Fall or Slashing in FIT (feed-in tariff) for PV to Promote Technology Development

Edit: DS New Energy    Date: Aug 30, 2018

A feed-in tariff  is a policy mechanism created to accelerate investment and application in renewable energy technologies.


The first feed-in tariff (FIT) was implemented by the Carter administration in the United States in the late 1970s. The National Energy Act was meant to promote energy conservation along with the development of new, renewable sources of energy, like solar and wind power. Since then, FITs have been widely used in Germany, Spain,UK,Ukraine,China,Japan,India, Indonesia, Malaysia, South Korea etc.


Governments usually lower or slash FIT aiming to promote technology development.


The UK Government had announced plans to axe the Feed-in Tariff (FiT) scheme from April 2019. It did not intend to replace the initiative and there would be no grace period for those projects in oversubscribed deployment caps queuing beyond the closure date of 31st March 2019.


In may 2018, China’s National Development and Reform Commission (NDRC), Ministry of Finance (MOF), and National Energy Administration (NEA) published a notice to lower the national PV feed-in tariff (FiT) for the quota of 2018. Particularly, FiT for both Ground-Mounted Power Plant and Distributed Generation (DG) System dropped by RMB 0.05/kWh, but there is no change to the subsidy for PV Poverty Alleviation Power Plant (Village), of which the FiT remains RMB 0.42/kWh. At the same time the new policy curbs escalating feed-in tariff payments by restricting the amount of new PV installations under national subsidy schemes.


In Spain, overly generous feed-in-tariffs (FIT) attracted a rush of solar investment; the FIT was paid by a surcharge on electricity, so consumers' bills skyrocketed. Spain's FIT was so generous that even energy-inefficient solar installations could make money, and quality suffered. In september 2013 the Spanish government  announced that FIT payments for renewables would be scrapped by introducing the Real Decreto-Ley.


Germany's FIT system was designed to ratchet down annually from the beginning, so that only the most efficient and technologically advanced entrants could profit.


Anyway, Feed-in-tariff levels are notoriously crucial on the application of PV and other new energy.

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