Feed-in tariffs require by law that electric utility companies purchase renewable electric energy and capacity, and purchase these at specified prices. The pricing of feed-in tariffs has three essential characteristics. First, the utility is required to guarantee a renewable energy generator a higher price than what the utility pays for fossil fuels (Metcalf and Weisbach, 2009, pp. 554–556). Second, each source of renewable energy (e.g., solar, wind, biomass) is assigned a unique rate that is determined by the capital costs of investing in that specific renewable, traditionally a 10- to 20-year maturity term, and specific internal rates of return (Lythgoe, 2009, pp. 315–321). Third, the individual prices the utility must pay reduce over time so that, for example, a solar generator that locks into a feed-in rate in 2011 will receive a lower rate than a solar generator from 2010 (Rickerson, Bennhold, and Bradbury, 2009, p. 2). The structure of feed-in tariffs offers a reliable, stable monetary incentive for investment in renewable energy sources. Investors considering financing new renewable energy projects under feed-in regulations remain confident because the rate of return is guaranteed and therefore the financial risk is low and predictable.