CLEAN Contracts: Making clean local electricity accessible now with feed-in-tariffs

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"CLEAN Contracts: Making clean local electricity accessible now with feed-in-tariffs"

Today the Center for American Progress, Energy Action Coalition, and Groundswell released a Paper entitled “CLEAN Contracts: Making Clean Local Energy Accessible Now.” CAP has also released an “Ask the Expert” video of Richard Caperton explaining how CLEAN Contracts work.

The paper looks at the one policy that has brought more renewable electricity to the marketplace than any other:  CLEAN contracts (sometimes called “feed-in-tariffs”).  These national, state, or local policies allow renewable energy project owners to sell their electricity to utilities at a pre-determined, fixed price for a long period of time.

The CLEAN contract has been successful across the globe because it is designed to overcome the specific barriers that stand in the way of businesses and consumers investing in renewable energy projects. It helps overcome upfront cost barriers to investment by making renewable energy projects more easily financeable. The contracts provide certainty on price and uptake by utilities through long-term contracts. And they offer a clearly understood, standardized process for developing projects, which reduces red tape and cuts down on uncertainty for developers and confusion for homeowners, reducing market risk and lowering the costs of getting things built.

In short, CLEAN contracts make it easier to run businesses, build projects, and give consumers what they want.

This paper begins with a look at how CLEAN contracts work and what their key ingredients are. It then examines how lawmakers and advocates can successfully move them forward given how the contracts are affected by federal regulation. It closes with recommendations on how to make sure the policies benefit ratepayers, workers, investors, and the U.S. economy.

As federal and state authorities regarding CLEAN contracts are being clarified, there are a number of ways that programs can move forward today.  We recommend that state and local activists and legislators consider the following strategies for immediate action to promote these important policies:

  • Implement a CLEAN program at a municipal or cooperative utility
  • Engage with the Federal Energy Regulatory Commission to clarify how they would view potential statewide CLEAN contracts
  • Encourage federal lawmakers to sponsor and vote for legislation that would amend federal law to allow states to implement CLEAN programs
  • Build a base for CLEAN supporters in a state so that state legislators can move forward when the regulatory environment is clearer

We also propose the following suggestions for implementing CLEAN contracts in ways that benefit the key stakeholders. We will discuss these in greater detail within this report.

  • Residents
    • Pursue public consultation and outreach about CLEAN contracts
    • Make programs accessible and efficient
    • Promote community-owned projects
    • Expand access to non-property owners
    • Help grow small businesses
  • Ratepayers
    • Cap program sizes
    • Decrease incentives over time
  • Workers
    • Use standardized community project labor agreements
    • Incentivize the use of local workers
    • Encourage locally made clean energy
    • Provide worker training
  • Investors
    • Connect pension funds, community development finance institutions, and community banks to CLEAN projects
    • Dedicate some program funding to educating local financiers about clean energy
    • Explore opportunities for “crowd sourcing” investment

The CLEAN contract stands out as a perfectly crafted mechanism to make clean energy investment a smarter choice for homeowners, utilities, and developers of renewable energy projects. It can help speed our transition to a clean energy future.

You can access the paper here:

http://www.americanprogress.org/issues/2011/01/clean_contracts.html

See Richard Caperton, co-author of the paper, explain CLEAN Contracts here:

http://www.americanprogress.org/issues/2011/01/ate_caperton.html

Richard W. Caperton is a Policy Analyst for CAP’s Energy opportunity Team.

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One Response to CLEAN Contracts: Making clean local electricity accessible now with feed-in-tariffs

  1. Mike#22 says:

    “The paper looks at the one policy that has brought more renewable electricity to the marketplace than any other”

    But not to the US marketplace, where the Renewable Energy Portfolio Standard, RPS, approach is much more common.