In case you missed it, a few weeks ago Vermont established the first statewide feed-in tariff in the country. What’s a feed-in tariff, you say? In short, a feed-in tariff — or FIT — guarantees that an owner will receive a premium price for the electricity that’s generated by their distributed generation system, like solar panels. (You can read more about FITs here.) Such tariffs have been the preferred policy tool in Germany, where they’ve spawned a boom in solar installations, and recent chatter suggests that China may soon unveil its own preferential tariff for solar technologies, albeit one that accounts for regional variations in the cost of conventional power.

Vermont’s tariff is to be administered through the Sustainably Priced Energy Enterprise Development (SPEED) Program, which was established in 2005 to promote the in-state development of renewable energy. According to the new rules, all Vermont retail electricity providers will be required to purchase the power generated by eligible renewable energy facilities. Passed in May as part of the Vermont Energy Act (H. 446), the tariff is set to take hold for any systems commissioned after September 30, 2009. As relayed by IREC,

The proposed rates for the FIT are as follows: $0.30 [per kWh] for Solar; $0.20 for wind with rated capacity of 15 kW or less; $0.12 for methane derived from landfill or agricultural operation … These rates are subject to change; however, as the Vermont Public Service Board (PSB) must conduct an economic analysis to either concur or adjust the rates based on criteria set-forth in the law.

For solar enthusiasts in the Green Mountain State, this is obviously great news. Solar power generation is to receive $0.30/kWh — a healthy margin above retail rates, which in 2007 averaged $0.12/kWh for commercial power, and $0.14/kWh for residential power. By guaranteeing a premium for electricity produced from renewable sources, the state’s tariff could go along way in expanding the development and deployment of solar, wind and other clean technologies. Still, Vermonters — especially homeowners angling to get solar — may wish to curb their enthusiasm for now, as it’s not clear whether residential solar power systems will be eligible under the new program. As one of our favorite information resources counsels,

It is not advisable to make project decisions based on this summary alone, as the rates and standard offer specifics, including eligibility, may change as a result of the PSB’s work. It is not clear how this program will impact net metering or whether or not residential installations will be eligible. The PSB’s preliminary determination will be complete by September 15, 2009, and final rules issued by January 15, 2010.

Still, from our perspective, it’s always encouraging to see a state put its money where its mouth is: Vermont has committed to a goal of producing by 2017 at least 20 percent of its power from renewable resources. Clearly, this won’t happen by itself. It’s hoped that Vermont’s new tariff will provide the added kick in the pants needed to boost the adoption of solar and wind, statewide.