How do we move clean energy access beyond just a light bulb?
With millions of dollars in new investment capping a record year for beyond the grid solar markets, that’s the question many are now asking. This record investment is building markets, starting with pico solar products like lanterns, from the bottom up. But just over the horizon lies much larger solar home systems and the next big opportunity capable of powering whole communities -- mini-grids.
One way to get us from here to mini-grids is a novel new concept: rural feed-in tariffs, or RFITs for short.
What an RFIT does is adapt the principles that made feed-in tariffs (FITs) wildly successful in Germany and other parts of the world -- including certainty for investors and early stage support for nascent clean energy markets -- to a radically different operating environment. That’s because policy making beyond the grid requires a whole new approach steeped in the realities of the communities it’s attempting to serve. That’s how you tame the wild west of beyond the grid policy making.
So what exactly is an RFIT? Here’s a checklist:
Guaranteed Minimum Revenue: An RFIT provides a targeted payment per household ‘connected’ to either a large solar home system or a village power/micro-grid installation. This guaranteed revenue will make projects bankable and investable, triggering much needed capital investment without the need for capital cost subsidies.
Target Energy Services, Not Kilowatts: An RFIT guarantees a minimum level of energy service delivery -- one set by policymakers above what the private market is currently delivering. That means an RFIT adheres to the number one rule in beyond the grid markets: energy efficiency unlocks clean energy for low-income populations by prioritizing service delivery, not kilowatt hours.
Sunset Payments Over Time: An RFIT sunsets over time with volumetric reductions (as did the much ballyhooed California Solar Initiative).
All of which is well and good, but are there any RFITs actually in use?