Economic Development through Distributed Generation   

Why Colorado Needs a CLEAN Mechanism 

 

A policy mechanism called Clean Local Energy Accessible Now or CLEAN (also known worldwide as a feed-in tariff, FIT, or Standard Offer) is a straightforward way for producers of renewable energy to contract with their local utilities to sell their power generation on the grid. The term wholesale distributed generation refers to renewable energy installations of less than 30 megawatts (MW) in size. 

The CLEAN policy is the most cost-effective method to deploy renewable energy at scale and to create clean energy jobs. CLEAN is not taxpayer subsidized.  

CLEAN or Feed-in Tariff (FIT) policies contain these provisions, the four Ps: 

1) Priority: Utility companies are legally obligated to connect any producer of renewable energy to the distribution grid at a priority.  

2) Price: Independent power producers are compensated for the entire cost of their system, plus a modest rate of return, through a long-term, must-take contract with the local utility. All five common classes of renewable energy are typically eligible (biomass, geothermal, hydropower, solar and wind); this price is secured via contract – and thus not subject to a change in public policy. 

3) Period: This rate is paid for a long-term period of at least 15 years. The program is not intended to run in perpetuity, but rather for a limited period of time. 

4) Plurality: The additional cost to the utility company is reflected on all ratepayers’ bills through a modest rate increase: Gainesville, FL saw a $0.43 per month increase to fund the program.  

CLEAN programs are the preferred mechanism for renewable deployment across the globe. CLEAN policies are responsible for: 

• More than 50% of installed wind worldwide 

• More than 75% of installed solar PV worldwide 

• More than 90% of installed farm biogas digesters worldwide 

Worldwide, CLEAN policies are credited with creating jobs and attracting capital: 

• The German feed-in tariff was introduced in 1991, and modified in 2001 and 2004. 

o The policy is directly responsible for creating 300,500+ new jobs to date 

o 80 jobs per day are created in the renewables sector 

o 500,000 jobs are expected by 2020 

o By 2020 total renewable energy contracts will represent private sector investments of 200B€ 

o Rather than utility-scale, 51% individuals and farmers own 22,000MW of Germany’s 

generation 

o Germany holds first place in the world for installed capacity of photovoltaic systems and second place for installed wind generation; the CLEAN policy is solely credited.  

o If current trends continue in Germany the renewable energy sector will surpass the automotive industry for total employment.  

• The Province of Ontario, Canada launched its CLEAN policy in October 2009. 

o 43,000 new jobs created to date 

o Total contracts under CLEAN represent private sector investments of $9 Billion 

o Renewable energy equipment manufacturers have announced dozens of new factories to be built in the province 

o Over 1000 FIT contracts are currently in place  

o Ontario has the first comprehensive feed-in tariff program in North America and is expected 

to surpass California in 2011 in total renewable sources deployed 

• China is expected to launch a CLEAN legislation in the near term, with a particular focus on large-scale solar electric generation.