Renewable Portfolio Standards: Effectively Increasing Renewables

Posted by Amy Guinan

Jun 10, 2015 11:00:00 AM


Renewable Portfolio Standards - A good thing

Across the country, states have been proactive in adopting or increasing their renewable portfolio standards (RPS).  The RPS is an effective tool for spurring consumer demand as it mandates that utilities offer incentives for renewables and encourages a mix of energy options. Coupled with federal incentives such as the Investment Tax Credit, an RPS is a very powerful mechanism for increasing renewables.

In short, RPS standards require utilities to sell a specified percentage of renewable electricity, such as wind, solar, biomass to consumers. The RPS requirement can apply only to investor-owned utilities, but many states also include municipalities and electric cooperatives in their RPS standards (though their requirements are equivalent or lower.)

The Benefits of an Effective RPS

Renewable energy policies help drive the nation’s $36 billion market for wind, solar and other renewable energy sources. Twenty-nine states, Washington, D.C., and two territories have adopted an RPS, while eight states and two territories have set renewable energy goals (which are non-binding).  Some of the benefits an RPS provides include:
  • Diversifying the energy mix (which can provide a cushion against price fluctuations and reduce stress on the power grid)
  • Spurring economic development and creating jobs
  • Lowering utility bills, creating cost savings for consumers
  • Reducing greenhouse gas emissions
National RES policies have been considered by Congress but have yet to be signed into law.

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