A Northfield legislator wants Minnesota to take a more European approach to renewable energy.
Rep. David Bly, DFL-Northfield, is expected to announce Thursday that he'll sponsor a bill to encourage local ownership of small energy projects. The measure would be a counterpoint to other tax incentives, including a federal production tax credit, that typically benefit large, corporate investors.
The proposed model, known as "feed-in tariffs," has worked in countries such as Germany, increasing both renewable-energy capacity and the role of small owners. Other states looking at feed-in tariffs include Michigan and California, although no state yet has such a program.
The proposal raises two issues likely to surface along with other renewable energy bills expected in the 2008 legislative session: What are the relative roles of government and the free market, and if clean energy costs more, who should pay that cost?
The proposed measure promises renewable-energy developers that utilities will buy their electricity at a price that covers their costs plus a "reasonable rate of return" -- the same terms now used for setting the price utilities charge their rate payers, said John Farrell, a research associate specializing in renewable energy at the Institute for Local Self-Reliance in Minneapolis.
That opens the system to very small projects -- even single wind turbines, or homeowners with enough solar panels on their roofs to sell a few extra kilowatts to the power company -- promoting more, and more-dispersed, local ownership, Farrell said. Under its system, Germany expanded its wind capacity 70 percent every year for a decade, and its solar capacity 70 percent a year from 1999 to 2005, he said.
That energy costs utilities more, but they blunt the effect by spreading the increase across all their customers. Germany's renewable expansion costs its households an average of $2 a month, Farrell said.
Where it fits