🎁 'Tis the season to support public service journalism Donate Now

Green energy could cost more to feed

Marketplace Staff Apr 29, 2008

Green energy could cost more to feed

Marketplace Staff Apr 29, 2008


Kai Ryssdal: It’s nice to be green. Lots of us want to do it, but it doesn’t come cheap. Here or anywhere else.

In Europe, utilities are required to pay people who put up wind turbines or install solar panels that feed green energy into the power grid. Great if you happen to have a couple solar cells lying around, but everybody else on the grid winds up footing the bill for those payments in the form of higher utility costs.

There’s talk about getting a similar law on the books here, but with rising energy prices, many wonder if Americans can stand another surcharge.

From the Marketplace Sustainability Desk, Lisa Desai reports.

Lisa Desai: In Europe, utility companies have to buy green energy from homeowners or businesses at a high price — it’s the law. So if you put solar panels up on your roof, your utility company sends you a check. That cost to the utility is called a feed-in tariff and they pass it on to everyone else.

Paul Gipe: The thing about a feed-in tariff, it allows everybody to participate in the renewable energy revolution.

That’s environmental activist Paul Gipe. He says right now all Americans get for their green energy is a tax credit, and it’s so small only big businesses profit.

Gipe says that may be about to change. Some states here are introducing the European law. And if it takes hold, that check in the mail will make green entrepreneurs out of average Americans.

Gipe: It allows everyone — homeowners, farmers, cooperatives — to actually install wind turbines and solar panels and do so for profit by selling electricity.

But there’s a catch: not everyone would profit from the system. Americans would see their electricity bill go up. That’s because utility companies would pay green energy producers up to seven times the market rate for their electricity, just like they do in Europe.

James White: Who is going to pay for that? Rate payers.

James White is an engineer at the Chelan County Public Utility in Washington.

White: We the utilities will be collecting that money from the customers and then paying it to the producers. Society needs to decide is that something they are willing to pay for?

In Germany, that answer is yes. Since the system was introduced several years ago, homeowners have seen their electricity bills go up by about $3 a month.

Constantine Vogt is one German resident who says he doesn’t mind.

Constantine Vogt: I really feel fine with that because I know that the money I spend is invested in a good thing. It’s invested in changing our energy system to make it more sustainable for the future. And yeah, I’m willing to pay the price if it’s not too much.

It’s that attitude and aggressive legislation forcing utility companies to pay homeowners for green energy that’s put Germany in the forefront of the green movement. In the last six years, solar technology companies have seen profits spike from $700 million to almost $8 billion. The sector has also created 250,000 new jobs.

Germany’s success has prompted U.S. politicians to fight for the same legislation. In Michigan, State Representative Kathleen Law wants to reproduce the European model. She says renewable energy might be the best way to combat growing unemployment.

Kathleen Law: Our financial future looks so bleak. A feed-in tariff provides us a new future. The renewable energy industry looks like an opportunity. It’s the sunshine at the end of the trail.

Illinois, Minnesota and Rhode Island are also pushing for the European legislation. Democratic Congressman Jay Inslee from Washington plans to introduce a bill soon that proposes to make the feed-in tariff system a national law. If he succeeds, expect an extra income for some and a higher electricity bill for everyone else.

In New York, this is Lisa Desai for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.