Eightmonths after Spain changed it feed-in tariff program and dramaticallyshrunk its market, it has come to exemplify what not to do whencrafting policies aimed at boosting solar production and business inthe U.S. Spain has boldly gone where few others have dared to ventureby offering generous incentives that made the country the top marketfor solar energy project deployment in 2008. It’s unlikely to claimthat crown this year. The government decided to dramatically shrink itsincentive program for 2009. Not only that, it’s held up as an exampleof what not to do in crafting solar incentives. If the United Statesmoves forward with a similar program, you can bet that you’ll hear alot about the Lesson From Spain.
Feed-intariffs are guaranteed rates for solar power. They are much higher thanthe price of conventional power, and utilities must buy solarelectricity at those government-set rates via long-term contracts. Suchpolicy has helped to make Germany a top solar energy producing country.Spain followed suit with its own, very generous feed-in tariff and seta national cap of 400 megawatts that was supposed to last from 2007through 2010. The amount of solar energy installed reached 344megawatts by September 2007, prompting the government to scramble todecide whether to raise the cap and adjust the solar electricity rates.