Geothermal FIT Design: International Experience and U.S. Considerations

Developing power plants is a risky endeavor, whether conventional or renewable generation. Feed-in tariff (FIT) policies can be designed to address some of these risks, and their design can be tailored to geothermal electric plant development. Geothermal projects face risks similar to other generation project development, including finding buyers for power, ensuring adequate transmissioncapacity, competing to supply electricity and/or renewable energy certificates (RECs), securing reliable revenue streams, navigating the legal issues related to project development, and reacting to changes in existing regulations or incentives. Although FITs have not been created specifically for geothermal in the United States to date, a variety of FIT design options could reduce geothermalpower plant development risks and are explored. This analysis focuses on the design of FIT incentive policies for geothermal electric projects and how FITs can be used to reduce risks (excluding drilling unproductive exploratory wells).