Power District Buys Solar With First Feed-In Tariff

The Sacramento Metropolitan Utility District has signed its first power contract under a new feed-in tariff, which allows producers to provide electricity at a competitive rate. The utility will buy 60 megawatts of energy - enough to power about 60,000 homes - from solar projects to be built near Galt and Elk Grove, according to this press release.

Recurrent Energy will build 12 five-megawatt power plants that should be operational in 2012. Officials at SMUD said the 20-year purchase agreement is a big step toward its goal of obtaining 20% of its power supply from renewable sources.

The forward-thinking utility introduced its feed-in tariff in January. Experts say those kinds of programs could help grow the emerging renewable energy program in California. A recent University of California, Berkeley, study cited in greentech media said a good feed-in tariff program could lead to $2 billion in new tax revenue, $50 billion worth of investment and 50,000 new jobs each year for a decade.

The federal Department of Energy says SMUD's feed-in tariff program includes rates that vary by time of day, season, length of contract, and production year, and offers two different rate schedules: one for combined heat and power systems and one for renewable energy technologies.

Rates for renewable systems like the ones in the Recurrent deal are dependent upon the year the system is placed into service. Once a system is installed, it is locked into those rates throughout the contract.