Understanding Europe’s Status of Feed-In Tariffs

Feed-In Tariffs

The valuable use of feed-in-tariffs might have been something that got introduced in the past, but it holds an impact even today. As an important concept, it has taken over things and managed to open our eyes towards an endless array of possibilities. So as a move to look into the past and remember the same, here’s a detailed take on feed-in tariffs in Europe.

An Effective Economic Tool

By all means, Feed-in Tariff (FIT) was known to be an effective economic tool that brought in the right set of advantages. The scheme was popularly known for its promotion of active investment, utilization of Renewable Energy Sources (RES), and so on. As a matter of functionality, within the scheme, large energy providers offer long-term contracts to smaller-scale Renewable Energy producers. As a result, they can sell renewable electricity to the market under a fixed tariff. This tariff will be higher than the market rate, and thus, that tends to take things forward.

Payment Plans

Since various FIT scheme developments have come into the picture, payment plans had to be understood. To cope up with the rising problem of maturity, payment plans were established. These plans include different features and options that are based on meeting a particular solution. The plans in this regard are Percentage Feed-in Tariff, Premium Feed-in Tariff, and Fixed Price Feed-in Tariff. With various features coming into this mix, one needs to explore these plans and then proceed to utilize the same to a considerable extent.

1. Percentage Feed-in Tariff (FIT)

A scheme based on percentage was known to be easier to implement when compared to the rest. Since it did not depend on each RE technological advances, simple modifications of the percentage were well on schedule to control the market growth. But that does not eliminate challenges, and these plans had to face them all.

2. Premium Feed-in Tariff (FIT)

With a price above the current electricity price, Premium Feed-in Tariff’s plan sets out to achieve the best. The payment option is proportional to the market price of electricity, and specific plans in this regard even offer the operators of RES a variable bonus that is once again above the market electricity price.

3. Fixed Price Feed-in Tariff (FIT)

This particular payment plan is quite different from the rest as it stays away from the market price of electricity. As a result, it lasts for a predetermined period. But the price is also subject to changes as re-evaluations are always a part of the deal.

Fixed Price Feed-in Tariff

Conclusion

Feed-in tariffs were brought into existence for a specific reason, and it stands to meet the requirements. As time brings in changes, one can expect the impact to go above and beyond.

Understanding Europe’s Status of Feed-In Tariffs

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