Energy Efficiency Feed-in-Tariff: Key Policy & Design Considerations
RAP Principal Richard Cowart and RAP Advisor Chris Neme met in the morning with the UK’s Department of Energy and Climate Change and in the afternoon with three efficiency trade associations to discuss the concept of an energy efficiency feed-in-tariff (FiT). The concept is being considered within the UK government as a possible complement to its electricity market reforms and has also gained interest among some advocates who believe that additional policies to promote efficiency are required in the UK. Drawing on lessons learned in the U.S. from both “standard offer” efficiency programs and the bidding of efficiency resources into capacity markets, Richard and Chris suggested that the design of an efficiency FiT would be critical to its success. Their presentations focused on eight key design challenges, including such critical issues as the type of savings a FiT should be designed to acquire; the approach to setting FiT prices; measurement and verification standards; and how the policy should be launched, managed and refined over time.