Feed-in tariffs (FiT) generally pay customers a premium price for generating power from renewable energy like solar or wind. They are different than net-metering rates, which are calculated differently and are generally at a lower rate. California carved out a 480 megawatt FiT from renewable facilities smaller than 1.5 megawatts. However, because of new legislation California’s feed-in tariff is in flux as of September 2012. That being said, where available, the FiT is offered 10- to 25-year contracts. For contracts starting in 2012 systems are reimbursed for generation at a base of 7.7 cents per kilowatt hour produced under 10-year contracts. Under 25 year contracts, they’re reimbursed for generation at a rate of 9.2 cents per kilowatt hour produced. For systems coming online after 2012 the price, anticipating rising electric costs, goes up as can be seen here: Feed-in Tariff Price. While customers generating under an FiT arrangement can sell the energy they generate to the utility, they aren’t eligible for other incentives, like net metering or the California Solar Initiative.

For most residential consumers with small energy-generating systems, opting for an incentive program is probably going to be the better deal. If you’re interested, contact your utility and/or installer to learn about the benefits and limitations of California’s FiT.