The Future of Feed-In Tariffs: Capacity Caps, Scheme Closures and Looming Grid Parity

Abstract

This article examines recent developments in feed-in tariff (FIT) law for solar photovoltaic (PV) electricity generation in selected jurisdictions. In particular, legal and policy issues surrounding capacity capping and closure of FIT schemes to new entrants are examined at a conceptual level. The need for downward adjustment of FIT rates is discussed. The application of capacity caps in Australia, Spain, France, Czech Republic and the UK is examined. Characteristics and examples of best-practice and worst-practice amendment of FIT laws for solar PV are identified. It is found that caps are a blunt instrument for constraining the impact of FIT on electricity prices. The alternative of tariff degression is discussed.