Feed-in Tariff

feed-in tariff can be described as a policy structure operating as an incentive to promote the use of specific products and/or services. Often these policy structures are needed to promote products and/or services not mature enough to be exposed to a competitive market. Feed-in tariffs are widely used in the energy markets, particularly electricity, as an incentive mechanism to adopt electricity generation from renewable energy sources (e.g., solar) and encourage development of renewable energy technologies (e.g., photovoltaic panels). Policy supporters argue feed-in tariffs encourage new job development, reduce imported energy supplies, improve energy security, and promote renewable energy implementation. However, critics contend feed-in tariffs are incompatible with the liberalization of energy markets, distorting the competition with the introduction of costly and inefficient methods for power generation. Feed-in tariff policies for the renewable energy market are pervasive in Europe but very limited in other regions, including the United States