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FIT to Be CLEAN: EU's 'Feed-In Tariff' Rebranded for Americans

Long Island, N.Y., becomes one of the first places in the U.S. to adopt the newly made-over CLEAN model to promote solar energy.

May 14, 2012

Officials in Long Island, N.Y., are rebranding a promising yet largely overlooked policy instrument to ramp up the region's solar power capacity.

Last month, the Long Island Power Authority (LIPA), the local utility, launched one of the nation's first CLEAN, or Clean Local Energy Accessible Now, programs.

The initiative uses the same feed-in tariff model that many credit for solar power booms in Germany, France and Spain—only with a different name.

Under the program LIPA pays solar operators a fixed rate of 22 cents for every kilowatt-hour of electricity they feed back to the grid for 20 years. The goal is to add 50 megawatts of commercial-scale solar energy, enough to power 6,500 homes.

Proponents say feed-in tariffs are key to stoking the clean energy economy, because they help solar and wind compete with conventional fossil fuels, provide private investors with a stable investment environment and create local jobs.

But advocates have struggled to sell the program in the United States—a problem they blame in part on its loaded name.

"Few things are as off-putting to people as the world 'tariff,'" said Richard Caperton, director of clean energy investment for the Center for American Progress (CAP), a liberal policy group. "It's an old-fashioned utility word that has more to do with [electricity] rates than taxes." CAP has adopted the CLEAN acronym in its advocacy of the model.

Stephanie Wang, director of programs and campaigns for the Palo Alto, Calif.-based Clean Coalition, which promotes CLEAN initiatives, said the name change is an attempt to "make sure that these programs exist in the first place."

Long Island is only one of about a dozen U.S. cities, regions or states to implement a feed-in tariff policy, compared to 23 European countries. By contrast, 29 U.S. states  have adopted mandatory renewable energy standards since the late 1990s, which require utilities to source a certain percentage of their electricity from clean power.

Some advocates claim that feed-in tariffs can be more effective at getting renewables off the ground than clean power mandates, because their long-term, fixed-rate contracts provide more certainty in the market.

In total, more than 60 places across the world have adopted feed-in tariffs. In Germany, a two-decade-old policy helped boost the country's share of renewables from 5 percent in 1991 to 20 percent in 2011, and created hundreds of thousands of green jobs, says Germany's environment ministry. Solar photovoltaic installations in particular increased more than 100-fold, from 2 megawatts to nearly 25,000 megawatts.

Genesis of a New Name: When and Why

The search for a more palatable term for feed-in tariff began two years ago and was led by MacWilliams Sanders Communications, a media consultancy in Amherst, Mass., that serves progressive groups. 

The agency asked focus groups in Los Angeles, Calif., and in the Colorado cities of Boulder and Fort Collins—where feed-in tariffs had been proposed—to come up with names for a policy that would guarantee clean energy developers preferential electricity rates.

The term Clean Local Energy Accessible Now, and its acronym CLEAN, emerged as one alternative. The firm asked a few hundred people in Michigan, Minnesota, Wisconsin and Vermont to choose their preferred name from a list of 20.

Feed-in tariff almost always ranked last, said Matt MacWilliams, the company's president. "People don't like the name itself, and they come up with really negative associations." By contrast, the name CLEAN consistently came out on top, he said.

Following the study's release in late 2010, the Clean Coalition promptly switched its name from its previous title of FIT Coalition. The three-year-old organization has since made rebranding the policy a key part of its efforts.

It hopes the name change will spark more U.S. interest in the model by distancing it from  European feed-in tariffs, which some Americans associate with a high tax on electricity, said Wang of the Clean Coalition.

"A lot of times Americans ... have concerns that Europeans are likely to pay more for green energy than is necessary," which isn't necessarily true, she said. "Folks want to know that these programs work in their backyard in the United States. They get very excited about the idea of new programs."

In Long Island, CLEAN to Fill In the Gap

In Long Island, the local utility is using its CLEAN initiative to tap a promising source of renewable power: medium-scale solar installations, said Michael Deering, LIPA's vice president for environmental affairs.

"We're trying to transform and sustain a solar industry here on Long Island that has been built up over the years ... and to lower the cost of solar," Deering said.

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