Innovative feed-in tariff designs that limit policy costs
This report, Innovative feed-in tariff designs that limit policy costs, explores various mechanisms that policymakers across the world have implemented to limit feed-in tariff policy costs.
If designed clearly and transparently, such mechanisms can align policymaker and market expectations for project deployment. Overall, such certainty in the longterm expectations of capacity built and costs paid can help stabilize the market and help new projects secure financing.
Three different policy tools are evaluated:
- payment level adjustment mechanisms, and
- auction-based designs.
The report employs case studies to explore the strengths and weaknesses of these three different cost containment tools. These tools are then evaluated with a set of criteria including predictability for policymakers, predictability for the marketplace, and potential for unintended consequences.