By Johnathan Hladik, johnathanh@cfra.org, Center for Rural Affairs
Proponents of renewable energy across the nation are applauding recent efforts by five Iowa lawmakers to provide an economic incentive for small-scale wind and solar producers. Already a leader in wind energy, Iowa is quickly becoming a model state for clean, domestic, and affordable energy production.
Introduced last week, Senate File 225 encourages the development of renewable power generation by providing a guaranteed payment for each kilowatt hour generated over a period of 20 years. This policy mechanism is referred to as a feed-in tariff, a method used in over 40 countries across the world and cited as the primary reason for successful renewable energy markets abroad.
SF 225 implements a policy where the actual payment per kilowatt hour varies, depending on the technology used to generate electricity, project size, and quality of the resource used, such as average wind speed. In other words, not all projects will be treated alike.
To qualify, each project must be in Iowa and program participation is limited to projects with a majority of ownership within Iowa. Qualifying projects must be less than 20 megawatts in size.
By opening the door to cost effective distributed generation, feed-in tariffs allow citizens to meet energy needs with locally produced electricity. By encouraging the development of customer owned renewable energy, feed-in tariffs eliminate the need for large scale wind development and render costly transmission projects unnecessary. By encouraging energy independence, this bill paves the way for rural economic development throughout Iowa and sets a new standard nationwide.
