By Richard W. Caperton, Bracken Hendricks, John Lauer, Courtney Hight | January 18, 2011
Washington, D.C.—Today, the Center for American Progress released a paper called “CLEAN Contracts: Making Clean Local Energy Accessible Now,” along with co-authors from Groundswell and the Energy Action Coalition.
This paper looks at the one policy that has helped bring more renewable electricity into the marketplace than any other: the Clean Local Energy Accessible Now, or CLEAN contract, also known as a “feed-in tariff.” These are national, state, or local policies that allow renewable energy project owners to sell their electricity to utilities at a predetermined, fixed price for a long period of time. We explore how to implement CLEAN contracts in ways that create the greatest benefit for consumers, communities, and the economy as a whole.
The CLEAN contract is designed to overcome the specific barriers that stand in the way of businesses and consumers investing in renewable energy projects. It helps overcome upfront cost barriers to investment by making renewable energy projects more easily financeable. The contracts provide certainty on the price of electricity and uptake of that energy by utilities through long-term contracts. And they offer a clearly understood, standardized process for developing projects, which reduces red tape and cuts down on uncertainty for developers and confusion for homeowners, reducing market risk and lowering the costs of getting things built.
In short, the CLEAN contract makes it easier to run businesses, build projects, and give consumers what they want.
This paper begins with a look at how CLEAN contracts work and what their key ingredients are. It then examines how lawmakers and advocates can successfully move them forward given how the contracts are affected by federal regulation. It closes with recommendations on how to make sure the policies benefit ratepayers, workers, investors, and the U.S. economy.
The CLEAN contract stands out as a well-crafted mechanism to make clean energy investment a smarter choice for homeowners, utilities, and developers of renewable energy projects. It can help speed our transition to a clean energy future.
To read the full report, click here.
Video: Ask the Expert: Richard Caperton on CLEAN Contracts
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Richard W. Caperton is a Policy Analyst with the Energy Opportunity team and Bracken Hendricks is a Senior Fellow at the Center for American Progress. John Lauer is co-founder and policy director of Groundswell (formerly The DC Project), a nonprofit committed to connecting and partnering with communities to create places of equal opportunity and environmental balance. Courtney Hight is the co-director for the Energy Action Coalition.