A little over a year ago, we reported that Oregon lawmakers were developing a pilot feed-in tariff program, following the passage of House Bill 3039. Now, countless meetings later, the Oregon Public Utilities Commission (PUC) has finally issued rules on the new initiative. Assuming you don’t want to read the hundred or so pages of background and draft rules, we’ve set out to provide a quick overview of the most pressing questions.

What is a feed-in tariff? A feed-in tariff ensures that you get paid for all the electricity generated by your solar panels. Under Oregon’s feed-in tariff, homeowners could receive payments as high as 65 cents per kilowatt-hour (kWh) for up to 15 years. Considering that the average retail price for residential power in Oregon is around a dime per kWh, the new program promises to offer strong incentive to install solar panels.

Who can take part? Residential and commercial customers of Portland General Electric (PGE), PacifiCorp and Idaho Power, utilities that together serve about three-quarters of Oregon’s population.

For how much can I sell my solar power? It depends on your region, the size of your system and whether you’re a homeowner or a business owner. The PUC has set up four regions, across which the rate ranges between $0.55/kWh to $0.65/kWh. See this great outline from SunPluggers for full details.

Can I still take advantage of other solar incentive programs? Yes and no. If accepted into the program, you’ll still be eligible to take the 30-percent federal solar tax credit. It seems you won’t, however, be permitted to take the state tax credit, Oregon solar rebates or other incentives available through Energy Trust of Oregon.

How is it funded? Ultimately, ratepayers. Electricity generated by solar energy systems is still more expensive that power that comes from conventional sources, like coal, natural gas and, particularly relevant to Oregon, hydroelectric dams. Since a feed-in tariff establishes an above-market rate for electrons that come from solar panels, that extra money has to come from somewhere. In practice, a utility will raise electricity rates across its service territory — usually to the tune of a couple of pennies per customer, per month. This does not, by any measure, represent a big increase for any one customer. But those pennies can add up to hundreds of millions of dollars. And the approach, which is essentially a redistribution of resources, can be controversial. This is one of the considerations that led Oregon to limit the feed-in tariff pilot to four years, as PUC official Ray Baum noted in a news release: “We are trying to strike a balance between providing an incentive while keeping an eye on controlling utility costs.”

How many Oregonians can participate? The total pilot program is capped at 25 megawatts of solar electricity generation capacity. Assuming an average home system size of five kilowatts, 5,000 households could participate (5,000 watts x 5,000 households = 25,000,000 watts, or 25 megawatts). In practice, owners of larger systems — both residential and commercial — are likely to sign up, which means the total number of participants will probably be fewer than five thousand.

When does it start? Systems installed after July, 2010 will be eligible.

How do I sign up? It’s not yet clear. As we always say, our network of qualified solar installation firms is the best source of information on solar rebate, rules and regulations. Stay tuned to the PUC website and feel free to post questions or suggestions here.