Feed-in Tariffs–The Economic Case
There are a number of myths surrounding Feed-in Tariffs (FITs) and how they work because FITs fly in the face of conventional neoliberal economic policy. In conventional neoliberalism, the market sets the price. In FITs, price is set administratively and the market determines the volume. FITs are a market mechanism that can create rapid growth without subsidies and other incentives. Setting prices administratively is nothing new. Electricity prices have been set administratively–and still are–in most countries for a century or more. The links below touch on this and related issues.
Germany in particular stands out and is able to demonstrate many benefits that come with a strong volume response while being responsive to significant market developments. In a North American context, the province of Ontario has many features of a strong policy design. . .