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Status of Feed-in Tariffs in Europe 2010

Article by: Paul Gipe


The use of feed-in tariffs (FITs) to pay for renewable generation now overwhelmingly dominates European renewable energy policy, according to the most recent meeting of the International Feed-in (tariff) Cooperation council (IFIC).

The council was founded by Germany, Spain, and Slovenia and holds workshops annually to discuss issues surrounding the use of feed-in tariffs. The 2010 meeting was in Berlin.

There are now 27 countries in the European Union since the accession of several former East Bloc countries.

Below is a summary of the findings of the 8th International Feed-in Cooperation Workshop on 18th and 19th, November 2010.


  • 20 of 27 EU states use FITs as the main renewable energy program,
  • 3 of 27 EU states also use FITs for certain technologies, such as solar PV in Italy,
  • Only 4 of 27 EU states don’t use FITs at all,
  • 85% of all new wind systems since 1997 have been installed with FITs in the EU,
  • Nearly 100% of all new solar PV systems since 1997 have been installed with FITs in the EU,
  • 68% of all new biomass generation since 1997 in the EU have been installed with FITs,
  • Feed-in tariffs are the most cost-effective renewable policy in Europe, and
  • Feed-in tariffs remain the most important measure for EU nations to meet EU renewable targets.

In 1997, there were some 5,000 MW of wind generating capacity installed in Europe. By the end of 2009 there was 77,000 MW. Thus, there has been as much as 60,000 MW of wind capacity installed in Europe with feed-in tariffs. A fleet of this size is capable of generating more than 120 TWh per year and represents a private investment of more than $120 billion.

The Fraunhofer Institute reported to the workshop that for onshore wind energy feed-in tariffs were more cost-effective than other policy mechanisms and especially more so than quota systems, such as renewable energy standards.


For example, Fraunhofer found that in the United Kingdom (UK), consumers were paying far more for wind energy than necessary to build profitable projects. Similarly, Italians (IT) were paying more than necessary, as were Belgians (BE). The UK’s Renewable Obligation uses a quota system with tradable green certificates. Italy and Belgium use similar policies.

In contrast, says Fraunhofer, Germany (DE), France (FR), and Spain (ES) pay only what’s necessary to develop a profitable project. The Fraunhofer findings were an update of a similar study that was published by the EU in 2005. The previous study found the same results.

Fraunhofer’s Mario Ragwitz also explained how the French system of differentiated tariffs for wind energy based on resource intensity works, and how it reduces the cost of wind energy to consumers.

Differentiated wind tariffs are used in France, Germany, and Switzerland.

In France, wind turbines are paid 0.082 per kWh for the first ten years of a 15-year contract. During the years 11 through 15, the tariff varies based on the productivity of the wind turbine. Highly productive wind turbines, for example at windy sites, are paid as little as 0.028 per kWh whereas turbines at less windy sites are paid up to 0.082 per kWh. This limits excessive profits at windy sites, that is, higher payments than necessary to develop profitable projects.


In a related report to the European Parliament titled Renewable Energy: Progressing towards the 2020 target, Fraunhofer found that some member states reformed their renewable energy policy to enable more local ownership and in so doing increase local acceptance of renewable energy. According to the report, an “element of reform in some Member State has been to develop private financing mechanisms that both attract capital and increase local acceptance of renewable energy projects (thus helping to overcome other barriers such as planning permission). The most common instrument used for this is ‘local ownership’ whereby local communities can take a financial share in the investment of the project in return for cheaper electricity or a share in the profit of the project.”

Historically, there has been more local ownership of renewable generation in jurisdictions that use feed-in tariffs. More than half of the 43,000 MW of renewable generators in Germany are owned by farmers or local investors.