Feed-in Tariffs: Arguments and Counter-arguments

Analytical Brief

Feed-in Tariffs (FITs) have come under fire of late, being criticized variously as “subsidies,” and “unfunded liabilities.” This Analytical Brief dispels a few common misconceptions of what is now widely recognized as the most successful renewable energy (RE) policy, and suggests that analysts and economists take a closer look. The majority of shots fired thus far have been wide of the mark.

Nineteenth century French economist Frédéric Bastiat once remarked that “the worse thing that can happen to a good cause is not to be skillfully attacked, but to be ineptly defended.” This first analytical brief seeks to address a few recent criticisms of feed-in tariffs (FITs) in the popular press and in the peer-reviewed literature, criticisms that reveal a number of lingering misunderstandings concerning the policy’s actual design and intent.