Georg Schurer lives in a suburb of Freiburg, a 900-year-old city perched on the fringe of Germany's Black Forest. Herr Schurer's house, sturdy and comfortable, is fairly indistinguishable from the others surrounding it in the Vauban community. The three-story townhouse has large south-facing, triple-glazed windows, a small garden, a shed--and solar panelscovering the entire southern exposure of the roof.
While Freiburg is held to be the warmest city in Germany, the country is hardly famed for its sunniness. Yet the solar panels on Schturer's roof are not all that unusual, thanks to a German energy policy called "feed-in tariffs" (FITs). FITs have democratized energy policy, allowing both ordinary homeowners and corporations to invest directly in renewables. The United States also has policies to promote renewables, but they have largely favored utilities, shutting out the little guy. Though some German solar power plants, scattered from Saarbrucken to Saxony, are the size of football fields, the average solar installation in 2006 only had around 20 panels, each the size of a small tabletop. Clearly, Germany's leadership in solar energy stems not just from large utility plants but from the roofs of ordinary homeowners like Georg Schurer.
Other nations have taken notice. With rising energy prices and an increasingly precarious supply of oil, a diverse group of nations has turned to FITs to promote renewable energy. According to Miguel Mendonca, author of the book Feed-in Tariffs (2007), some 46 countries worldwide have implemented FITs. FITs are now the most commonly used mechanism for the promotion of renewables.
Even in the United States, FITs have gained a toehold, at least at the state level. The states of Washington and Wisconsin have established policies close to Germany's FIT in recent years, and other proposals are based explicitly on the German model, especially a bill introduced in Michigan last fall. A similar bill was presented to the Illinois and Minnesota legislatures in February. And renewables trend-setter California is also discussing how to implement FITs.
Can German FITs be made to fit America?
FITs and Starts
It would be ironic if they could not; feed-in tariffs are an American idea. In the wake of two oil crises in the 1970s, President Jimmy Carter called for conservation and alternative energy. California responded in 1983 by establishing standard offer contracts (SOCs), a forerunner of Germany's FITs.
SOCs required utilities to purchase power from qualifying independent generating facilities for 15 to 30 years, and at a fixed rate for the first 10 years of a facility's operation. The policy was a boon for the wind industry, giving it the necessary security to invest, and large forests of wind turbines soon covered the Tehachapi and Altamont Passes in California. Only a few years later, California was getting 1 percent of its electricity from wind turbines. A turning point had been reached.
Or so it seemed to Paul Gipe, who, as executive director of the Ontario Sustainable Energy Association, helped implement Canada's first FITs. Back in 1984, Gipe went to California to join the fledgling wind industry. He had already been working on wind turbines since the 1970s, when wind generator designs were decades old. Many farmers built their own makeshift rotors, either from specially made blades or even old oars and other unused boards, to charge car batteries. Such devices were important sources of electricity on remote farms back in the 1930s, when private utility companies said it was simply too expensive to expand the grid into sparsely populated areas.
Gipe, communications director in the 1970s for Zond Systems, envisioned turbine designs being quickly improved, with major advances coming from the United States. The next year, however, Zond was forced to lay off just about its entire staff, including Gipe. Many other wind firms suffered the same fate, as did other fledging industries such as solar thermal--the famous Solar One pilot project, though promising, did not spur a new industry. Instead, falling natural gas prices led to a boom in gas turbine construction.
The country's mood had changed, along with its attitude toward energy consumption. California let its SOCs expire as oil prices bottomed out. Gipe was left...