Feed-In Tariffs

Peer-to-Peer Financing Mechanisms to Accelerate Renewable Energy Deployment

by Joshua Pearce

K. Branker, E. Shackles, J. M. Pearce, “Peer-to-Peer Financing Mechanisms to Accelerate Renewable Energy Deployment” The Journal of Sustainable Finance & Investment 1(2), pp. 138-155 (2011).

Despite the clear need to reduce greenhouse gas emissions, lack of access to capital and appropriate financing... more Despite the clear need to reduce greenhouse gas emissions, lack of access to capital and appropriate financing mechanisms has limited the deployment of renewable energy technologies (RETs). Feed-in Tariff (FIT) programs have been used successfully in many countries to make RETs more economically feasible. Unfortunately, the large capital costs of RETs can result in both the slow uptake of FIT programs and incomplete capture of deployment potential. Subsidies are concentrated in financial institutions rather than the greater population as traditional bank loans are required to fund RET projects. This paper critically analyzes and considers the political, financial and logistical risks of an innovative peer-to-peer financing mechanism. This mechanism has the goal of increasing RET deployment capacity under a FIT program in an effort to equitably distribute both the environmental and economic advantages throughout the entire population. Using the Ontario FIT program as a case study, this article illustrates how the guaranteed income stream from a solar photovoltaic system can be modeled as an investment and how peer-to-peer lending mechanisms can then be used to provide capital for the initial costs. The requirements for and limitations of these types of funding mechanisms for RETs are quantified and discussed and future work to deploy this methodology is described.

Fuel cells for domestic heat and power: are they worth it?

by Iain Staffell

Doctoral thesis

Fuel cells could substantially decarbonise domestic energy production, but at what cost? Models were developed to... more Fuel cells could substantially decarbonise domestic energy production, but at what cost? Models were developed to simulate economic and environmental benefits of fuel cell micro-CHP in UK homes, and project current purchase costs into the future.

Data inputs were taken from a meta-review of field performance and energy consumption profiles from 259 UK houses. This model was validated, then used to simulate changes in energy consumption from operating four leading fuel cell technologies. Fuel cells offer negligible financial savings in the UK, increasing energy bills in 30-60% of homes. Britain’s proposed 10p/kWh feed-in tariff would radically improve this, rewarding owners with £600-750 annually. Fuel cells produce 360-450g/kWh of CO2, 30-45% less than the UK grid. Emission reductions depend strongly on displaced electricity generation methods, ranging from 0-5.5T/year.

From learning-by-doing, Japanese sale prices for 1kW PEMFC systems are projected to fall from £15,000 today to £6,000 within 10±5 years; however, a commercially viable price of around £3,000 is expected to be two decades away. The payback period of PEMFC is 25-45 years with the proposed feed-in tariff, falling to current system lifetimes within 5-10 years. Carbon mitigation costs would therefore be £750-950/T, varying substantially with marginal emissions and price reductions.

Photovoltaics in Germany: has solar power been worth it?

by Andrew Smith

European Experience with Tradable Green Certificates and Feed-In Tariffs for Renewable Electricity Support

by Matthias Fripp

Diana Poutoaia and Matthias Fripp, Environmental Change Institute, Oxford University, 2008