They also lead to faster declines in local installation costs – and that must be the goal for the industry and policymakers alike: cost-competitiveness. In Germany today it is about 20% cheaper to install solar than it is in the U.S. Here’s a L.Berkeley Labs study to back that up.
http://eetd.lbl.gov/ea/emp/reports/lbnl-1516e.pdf. T

Also, reasons 1 and 2 above make for pretty weak criticisms. reason 1 because current incentive programs in California also do not account for time of use, and more significantly, we know when solar is productive, on average – during the day, when wholesale rates are the highest, and when demand is greatest. An FIT for solar is a stronger incentive than real time pricing. Reason 2, because it suggests that the policy itself causes the price of panels to inflate, and that it does so permanently – this is simply incorrect: in the long-term, FITs mature the market and drive down costs. The reason why prices spiked globally after the German FIT was launched was because the strength of the incentive sucked all of the panels out of other markets. The price went up because of scarcity – too little production capacity. While that hurt in the short term, it ultimately sent a clear signal to manufacturers to expand their capacity, which, in turn, created larger economies of scale, greater competition and ultimately lower prices per watt. When the history of solar is written, a large chapter will be dedicated to the leadership of places such as Japan (no FIT), Germany and other countries with aggressive market development policies because the escalated the growth and scale of the industry and produced declining costs, not rising ones.

Also, criticisms that point to the small overall contribution that PV makes to Germany’s electricity supply seem to always neglect to point out that the technology has seen a year after year 30% growth rate for about a decade – a 3 year doubling period. If that continues, you can be certain that PV will not remain such a small fraction for very long. Also, such criticism fundamentally misunderstands the most important distinguishing characteristic of PV and distributed generation: it is a consumer technology that is easily implemented on a variety of scales in short periods of time. This means that in the developed world it can simply grow much faster than conventional, centralized sources, like power plants. When the price crosses below that of conventional sources – and FITs efficiently and permanently nudge the numbers in that direction – then we will see penetration rates grow at an exponential rate. Really, PV – as a consumer technology – will expand more like the computer or the automobile, rather than like the conventional power plant.

The FIT Coalition has performed a sophisticated ratepayer impact analysis for a comprehensive FIT. The analysis, and the underlying model, have been reviewed by senior personnel at the CPUC, CEC, and CAISO; and both are freely available at the FIT Coalition website: http://www.fitcoalition.com

On a per dollar basis, this of how much further the German cash would have gone, if the same panels had been placed in a more sunny climate.