Last week, Washington Governor Christine Gregoire signed Senate Bill 5101, which WorldChanging ally Denis Hayes describes as "[T]he most important solar legislation ever introduced in any American state legislature.” As Cascadia Scorecard explains:

SB 5101 is modeled after an energy policy first passed by the German government in 1990 that required utilities, among other things, to purchase any renewable energy electricity at fixed, minimum prices. This German law, also known as the feed-in tariff law, renewable tariff law or pricing law, has gone through several changes and is currently known as the German Renewable Energy Act (EEG).

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Several other European countries including Spain have adopted similar policies. Under the German system, the prices paid for renewable electricity are higher than the retail cost of electricity and guaranteed for a set period of time. The prices are set in relationship to the cost of the renewable resource or may be set to spur investment and industrial development in renewables. The prices can account for improvements in technology and economies of scale by establishing a schedule that lowers the price over time for successive producers. The costs of higher payments to renewables are covered by a small additional per kilowatt-hour (kWh) charge on all consumers according to their level of use. Having the revenue source come from ratepayers instead of taxpayers has insulated the program from the vagaries of legislative renewal.

SB 5101 establishes a similar system of payments for kWh generated by wind, solar and anaerobic digesters except that the revenue source is a credit against a fixed percentage of utility taxes instead of a charge to ratepayers. In Washington State, a homeowner with a solar photovoltaic (PV) system will receive up to $2,000 per year, depending on how much energy is generated by their system.

This kind of law has already made Germany a leading player in renewable energy. While some kinks remain to be ironed out in SB 5101, the leveling effect it may have on the energy playing field is incredibly exciting.