Vermont standard offer renewable energy program

In May 2009, Vermont adopted a standard offer program that serves as a small feed-in tariff.  Although the program scored only a ‘D’  in feed-in tariff expert Paul Gipe’s recent analysis of North American feed-in tariff policies, it does contain many of the key components of a feed-in tariff policy.

The Vermont standard offer program provides long term contracts (15-20 years) for biomass, wind, hydro, landfill methane, and agricultural methane and 25 year contracts for solar power.  The prices are based on the cost of production plus a rate of return equal to what Vermont utilities receive and are fixed for the contract period.  Projects can be up to 2.2 MW in size, with a total program cap of 50 MW.  Amendments to the program have created technology-specific caps of 12.5 MW, which resulted in the solar and biomass portions being fully subscribed in the first day of the program.  A narrative description of the program is also available from Paul Gipe and the gritty details by DSIRE.

The Vermont feed-in tariff is a good policy for supporting dispersed generation from small-scale projects.  Although the overall program cap is fairly limiting, it has a good chance of encouraging development of a variety of renewable energy technologies and by a diversity of owners.  It also has prices differentiated by size (for wind power) to help encourage both small, on-site windmills and larger utility-scale turbines.  On the other hand, the project size cap of 2.2 MW is particularly limiting for wind power and may only allow for 1-2 utility scale turbines.  Additionally, the tariff for solar power is not differentiated by size or location (roof or ground) and therefore will favor larger, ground-mounted solar rather than distributed rooftop projects.