Four states this year implemented feed-in tariffs, incentives that pay customers for the renewable energy they produce and "feed" back into electricity grids. Three did it for the first time, joining Washington state and California, which beefed up its law.

The key to feed-in tariffs is a combination of long-term contracts and guaranteed rates of return that gives business leaders enough certainty to invest in constructing systems to feed the grid. Each state's policy differs slightly, but significantly, providing a multitude of blueprints that advocates hope will lead to growth in renewable industries.

Other states, including New York, Minnesota and Maine, recently considered proposals but have not yet passed laws. And the idea is making strides at the national level. Rep. Jay Inslee, D-Wash., introduced feed-in tariff legislation last June. It died in committee, but Inslee and co-sponsor Bill Delahunt, D-Mass., say they will reintroduce a bill before the end of the year.

Hawaii

One of the states most dependent on fossil fuels -- it gets 90 percent of its energy from imported petroleum -- Hawaii set big goals for renewable energy production, requiring 20 percent of the state's energy to come from renewables by 2020. Gov. Linda Lingle (R) last year set a nonbinding goal that the state produce 70 percent of its energy from renewables by 2030.

Unlike other states, Hawaii's feed-in tariff, established in October, was created through the state's Public Utilities Commission and not passed by the legislature. "A lot of this involved technical issues and detail issues that need to be decided," said Carl Caliboso, chairman of the commission. "Sometimes that type of thing is more appropriate for administrative agencies."

California

Finding the right price can mean the difference between stagnation and stimulus. California passed its original feed-in tariff in 2006 but found that the price it paid customers for their renewable energy was too low to encourage a lot of investment. In October, the state passed a stronger feed-in tariff, tying the rate to the market price for electricity produced by a natural gas plant, plus a multiplier intended to reflect the environmental benefit of renewables.

The Golden State's unique pricing scheme may or may not work. Some renewable energy advocates worry that comparing renewables to low-cost natural gas won't set the rate high enough to spark investment. But Vince Marchand, consultant to the state senator who sponsored the bill, said he expected the rate to be set above 20 cents per kilowatt hour, nearly double what customers pay for utility-generated power.

Oregon

Oregon Gov. Ted Kulongoski (D) has made renewable energy a central part of his agenda. In 2007 he set a renewable portfolio standard mandating that Oregon get 25 percent of its electricity from renewable sources by 2025. Kulongoski outlined a broad energy agenda for the 2009 legislative session, including the establishment in July of a feed-in tariff pilot program exclusively for solar power.

Like the other states that have instituted feed-in tariffs, Oregon's program will be funded by small increases in costs to ratepayers, not from the already strapped state budget. "There've been concerns here in the state about the cost of state tax credits associated with various energy projects," said Lee Sparling, director of the Utility Program at the Oregon Public Utility Commission. If the cost passed on to ratepayers gets too high, Sparling's agency is authorized to modify or suspend the program.

Vermont

Unlike the California and Oregon laws, which had the backing of green-minded governors, Vermont's program passed in spite of Gov. Jim Douglas (R). "In Vermont we've been taking baby steps forward for the building of a renewable energy system," said state Rep. Tony Klein, a Democrat and chairman of the Natural Resources and Energy Committee, which sponsored the bill. "The reason that we've been taking baby steps is because we've had a governor for the past eight years that really couldn't see the forest for the trees."

Douglas said he supports renewable energy but that the bill "will needlessly increase costs to Vermont consumers so as to subsidize this one favored business sector." But after the legislature twice overrode his veto this year, the governor was forced to allow this bill to become law without his signature.

Washington

Washington enacted a feed-in tariff in 2005 for solar photovoltaic systems, but with an added incentive: Consumers who generate power using components manufactured in-state get paid more. "The legislation is smart enough to say, 'Why should we jumpstart this industry on our expense, when we can be free riders if we let the Germans and everybody develop the technology?'" said Mike Nelson, director of the Northwest Solar Center at Washington State University, who helped legislators draft the law. Tying the rates to supporting local manufacturers was key to leading the bill toward passage.

Because Washington's 63 utility companies together wield a lot of power in the state legislature, the support of the Washington Public Utility District Association was essential to moving the bill forward. The group may have been encouraged to get on board, Nelson said, because buying customer-generated renewables is the cheapest way for utilities to reach the state's renewable energy requirements.

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