What are REDs?

Since 1991, Germany, Spain, Denmark, and over 40 other nations, states, and provinces, have pioneered legislation that have proven to promote the fastest, cheapest, and widest growth of renewable energy. In many of these countries these policies are called "Feed-In Tariffs" (FITs). Producers of renewable energy are paid a premium rate or "tariff" for each kilowatt of energy they "feed into" the grid. Here in North America FITs are being called, "Renewable Energy Dividends" (REDs). The name has changed but the fundamental principles of these policies stay the same:

Everyone who produces renewable energy is guaranteed that they can connect to the power grid and sell their energy to their utility company. There is no limit to the amount of renewable energy that can be sold to utility companies.

Utility companies sign 15-20 year contracts with all their renewable energy producers. All contracts are transparent and open for inspection.

The contracts include long-term agreed upon prices that the utility companies will pay for the energy they buy. The prices are set high enough to be an incentive to new producers and for existing producers to expand their production capacities. Prices vary according to the source of the energy (i.e, sun, wind, water, bio-mass, etc.) and the size of the energy-producing installation.

The utility companies can recoup their increased costs of paying higher prices for renewable energy by spreading these costs among all their customers.

An Independent Review Board is established by the government that periodically sets the prices and terms for new contracts.