In the electricity sector, FiTs have become a frequently used policy to stimulate demand for renewable electricity across the world. By now, this price-based approach has become much more popular than the other prominent policy- quantity-based quota obligations, which are also referred to as renewable portfolio standards(RPS). FiTs are generally considered successful drivers of RE expansion and have led to a considerable increase of renewable electricity capacity. 4 Proponents claim that FiTs “generate the fastest, and lowest-cost deployment of renewable energy.” 5 This paper describes some of the main features and success factors of FiTs. While it is impossible to outline all potential design options of a FiT system in this paper, the following describes some of the mainstream basic features. When considering certain features of a FiT, policy makers should take into account the fact that investors will regularly look for three important parameters: transparency, longevity, and certainty. 6 Any policy design that upholds these parameters while creating the right financial incentives and avoiding a prohibitive administrative burden will be more likely to attract investors than a design which provides the latter, but does not offer the same transparency and long-term certainty. The report furthermore outlines the policy developments in Germany to demonstrate the evolution of one of the most prominent FiT-systems in the world. Key Characteristics of a Feed-in Tariff Specific targets for RE expansion are a useful starting point for policymakers when designing a FiT to define the vision and level of ambition guiding the policy. Different to a quota-system, however, the price-based incentive system of the FiTs works also without defined RE targets. If a target is to be set, it can be expressed as e.g. a percentage of RE in the overall electricity mix by a certain year(meeting 35% of electricity demand through renewables in 2020, for example). To provide a long-term perspective for the market and thus create reliable incentives, a long-term vision and interim goals are advisable. Binding(as opposed to aspirational) goals will create the strongest such signal. 4 Zhang(2013), p. 2. 5 See, e.g., World Future Council(2007), p. 7. 6 See, for example, Fulton(2012), pp. 1 sqq. 5