The PACT project aims to provide the necessary elements for rapidly introducing
policy to combat climate change - giving parliamentarians, civil servants, and
advocates around the world access to the legal and technical expertise needed to
envisage, to argue for and to enact laws and policies that effectively protect
the climate. Find out more...
Getting the tariff (or price) right
One of the most important - and most difficult - tasks is to get the tariff (or price) right. If it's too high, windfall profits for producers will follow. If it's too low, there will be no or little take-up.
Here, the legislator needs to:
- set technology-specific tariffs (or prices) at a reasonable level
- guarantee payment for a certain number of years and
- establish a mechanism for adjusting the tariff (or price)
In countries which have had FITs for some time, they have a more advanced tariff mechanism, or Premium FIT
Terminology - tariff or price?
In order to make your draft of a proposed law as suitable as possible for your country or region, you may wish to select your preferred term for the unit cost of electricity. In some countries it is usual to call this a "tariff" and in others it is more usual to use the term "price".
If you make a choice here, the text of your proposed law document will contain your preferred term at each occurrence. If you make no choice here, then your proposed law document will contain the default setting comprised of both choices, i.e. "[tariff] [price]".