Page 21 - Solar

Can the law be repealed or changed in a Who Pays For the Feed-in Tariffs?
way that negatively affects investors who

are already in production?
Feed-in tariffs are not subsidies. They do not subsidize the
cost of the equipment used to produce renewably-
generated electricity, like solar panels or wind turbines;
Italy has defined its commitment to the development of the instead, Feed-in tariffs are simply payment for the
PV industry through Four Governmental decrees. The first
three emanated in July 2005, February 2006 and July generation of electricity. The extra cost for the Feed-in tariffs
is shared among all energy users in the country, thereby
2010, and have defined the criteria for promoting the spreading the costs. In Germany the average household pays
production of electricity from Photovoltaics and set out
attractive Feed-in tariffs and incentives which galvanised the about €1.01 per month extra for the Feed-in Tariff program.
Italian PV market. A new edition of the decree, Conto
Who Benefits From Feed-in Tariffs?
Energia 4, was published in May 2011 which provides
guarantees on the Italian Feed-in-tariffs up to 2016. These
are valid for 20 years from the date of grid connection e.g. The environment, property Owners & the whole economy
benefit. Anyone who installs Renewable Energy can profit,
a solar farm connected in 2011 will have a guaranteed Feed-
in tariff until 2031 where as a solar farm connected in 2016 spreading out the value among citizens and not just owners
will have a guaranteed Feed-in tariff until 2036.
of large-scale power stations. Homeowners, farmers, small
and large businesses and cooperatives can all participate. To
date more than 500,000 German & Italian households have
What is the Kyoto Protocol?
installed solar PV creating substantial employment. The
National governments benefit, Feed-in tariffs are designed
The Kyoto Protocol is a legally binding agreement adopted to provide sufficient financial incentives without capital
by 37 industrialised countries in 1997 as part of the United
Nations Framework Convention on Climate Change grants, rebates, or tax subsidies. Additionally, Feed-in tariff
(UNFCCC). The UNFCCC is an international treaty intended policies are easy to implement and manage: by the end of
2010, more than €53 Billion will have been invested in
to bring countries together to reduce global warming after
150 years of industrialisation.
Germany alone on renewable energy projects. Germany has
benefited from taxes it has collected on the income
What are Feed-in tariffs?
generated from the sale of the electricity.

Additionally studies have shown that money spent locally
A Feed-in tariff (Feed-law, advanced renewable tariff or (e.g. for building new solar energy projects) re-circulates
300-600% more than money sent out-of-country for oil or
renewable energy payments) is a policy mechanism gas, etc. This secondary effect also helps the economy grow.
designed to encourage the adoption of renewable energy
sources and to help accelerate the move toward grid parity.
Feed-in tariffs have been adopted in over forty countries How does a renewable energy investment

world wide and are cited as the primary reason for the huge compare to traditional investments such as
success of the German, Spanish and Italian renewable property or equities?
energy markets. FITs pay renewable energy producers a set

rate for each unit of electricity sold and oblige power The benefit of a renewable energy investment unlike
companies to purchase all electricity from producers in their traditional asset classes is that no capital appreciation of an
service area for a long period of time generally 20 years. FITs
asset is required or planned for. Renewable energy
were prompted by the global warming crisis as well as the investment is uncorrelated to property and equities and
emerging global energy demand pressure. Unlike other benefits by simply selling a valuable commodity in this case,
mechanisms, such as tax credits or research and electricity to a guaranteed customer at a guaranteed price

development subsidies, Feed-in tariffs cost governments for 20 years which is underwritten by the EU and National
nothing, being usually funded through costs spread among government. The Solar 21 investment model takes much of
all electric utility customers, as part of their regular bill. the uncertainty out of investing compared to traditional
Experience in Germany shows that the Feed-in tariff was
assets classes such as property and equities, as these assets’
instrumental in increasing the power generated by underlying value are heavily correlated to market sentiment
renewable energy resources from 6.3% in 2000 to more and emotion.
than 15% in 2008 - an increase of more than 200% in eight

years. This trend is set to continue world wide due to the
increasing global demand for electricity as well as the recent
move away from nuclear power and fossil fuels.

17