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.
Three times as many jobs through FIT
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 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.
Craig Lewis, Executive Director of the FIT Coalition, expressed his enthusiasm for the study, “Dan Kammen and his group at UC Berkeley are the most knowledgeable experts on the renewable energy and economic considerations that were examined in this study. The conclusions confirm the FIT Coalition’s unvarying position that FITs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits wherever FITs are designed to achieve scale. This study will open many policymakers’ minds to the unparalleled benefits of FITs and their ability to unleash the wholesale distributed generation market segment.”
“I’ve worked closely with state and national policymakers providing research on renewable energy and economic policies to help craft legislation. In examining the effects of a FIT in California, I was pleased at what the policy could do for the state. 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.
“This report demonstrates the benefits of using a feed-in tariff as one of the tools to achieve job creation and get our economy back on track in addition to achieving energy independence and reducing our need for fossil fuels. It is a wonderful guide to the kind of policies that will get us to a more prosperous and sustainable energy economy. I am grateful to Dan Kammen, Max Wei, and their colleagues for continuing to produce the kind of solid analysis we need to make better policy decisions,” stated Senator Fran Pavley (D-Agoura Hills) in review of the report.
Commissioner Jeff Byron at the California Energy Commission reviewed the study and had the following to say, "The work of the Renewable and Appropriate Energy Laboratory verifies the conclusions of the Energy Commission regarding Feed-In Tariffs and why we have supported their adoption in the past. 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."
For details on the study’s methodology, please see the accompanying summary or view the entire report.
Editor’s Note: Article kindly provided by the FIT Coalition, a leading force in replicating Feed-In Tariffs and other global renewable energy best-practices throughout the United States. The FIT Coalition’s mission is to identify and advocate for policies that will accelerate the deployment of cost-effective renewable energy in the United States.
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