Knowledge Tree
renewable portfolio standards
Also known as: Renewable Portfolio Standard
Facts (45)
Sources
The Power of Change: Innovation for Development and Deployment ... nationalacademies.org 40 facts
claimRenewable Portfolio Standards (RPSs) are adopted to achieve multiple goals, including limiting environmental externalities, reducing renewable technology costs through learning-by-doing, enhancing distribution reliability, promoting energy security, preserving water resources, and creating local jobs in the clean energy industry (Fischer and Preonas, 2010).
claimAccording to Fischer and Preonas (2010), if a binding emissions trading system were implemented, Renewable Portfolio Standards (RPSs) would not necessarily produce additional emission reductions but would likely increase overall compliance costs.
procedureRenewable Portfolio Standards (RPSs) require utilities or retail electricity suppliers to use renewable energy, obtain Renewable Energy Certificates (RECs), or procure a minimum amount of renewable generating capacity for their electricity portfolios.
claimRenewable Portfolio Standards (RPSs) lower the cost of selected clean energy technologies but do not incorporate the social costs of carbon and other environmental externalities into the price of polluting resources, which potentially distorts price signals for market participants (Borenstein, 2012; Nordhaus, 2013).
quoteSekar and Sohngen (2014) concluded regarding the impact of state Renewable Portfolio Standards (RPSs) on CO2 emissions: “given that by 2010 the RPS have been in effect for only a few years in many states, this is a fairly significant impact. The gap between the two cases [with and without state RPSs] is likely to continue to widen as RPS are fully implemented across the nation.”
claimThere is no standard methodology for reporting Renewable Portfolio Standard (RPS) costs, and existing surveys may omit certain integration and system operating costs.
claimState-level Renewable Portfolio Standards (RPSs) were developed in part as a response to the lack of a comprehensive national policy for reducing carbon emissions.
measurementApproximately 46 GW of new renewable generating capacity was developed in the 29 states with Renewable Portfolio Standards by the end of 2012, representing two-thirds of all non-hydro renewable electricity generation capacity additions in the United States since 1998.
measurementAs of 2016, 29 U.S. states and the District of Columbia have implemented Renewable Portfolio Standards (RPSs), which account for 64 percent of total U.S. electricity sales.
claimRenewable Energy Certificates (RECs) provide a uniform system for tracking the purchase and use of renewable energy, ensuring that financial incentives from portfolio standards flow to the owners of covered renewable resources.
claimThe appropriate incentive level for promoting learning-by-doing is likely lower than the deployment incentives currently provided by Renewable Portfolio Standards (RPSs), tax credits, and other renewable energy programs.
measurementAmong states with renewable portfolio standards or goals, 10 allow solar thermal resources to qualify, 9 include energy efficiency, 6 allow combined heat and power, and 4 count certain nonrenewable resources, according to Heeter and Bird (2012).
referenceLyon and Yin (2009) provide an assessment of factors that correlate with the adoption of Renewable Portfolio Standards (RPSs).
measurementEight U.S. states have adopted voluntary renewable energy goals, and when combined with the 29 states that have mandatory Renewable Portfolio Standards, these 36 states account for nearly three-quarters of U.S. electricity sales.
measurementA 2010 study by Palmer and colleagues estimated that a national Renewable Portfolio Standard (RPS) requiring 25 percent renewable energy by 2025 would cost $14 per ton of CO2 reduced, whereas a cap-and-trade policy achieving the same reduction would cost $4 per ton.
claimMost renewable portfolio standard (RPS) policies include a cost containment mechanism, such as a cap on total compliance costs as a percentage of average retail rates or an alternative compliance payment, according to Heeter et al. (2014).
claimFew states have conducted benefit-cost analyses of their Renewable Portfolio Standard (RPS) requirements or evaluated options for evolving these standards based on lessons from other states and innovation models.
measurementA 2014 survey by Heeter et al. found that estimated incremental Renewable Portfolio Standard (RPS) compliance costs were less than 2 percent of average retail rates for the large majority of states between 2010 and 2012.
claimThe lack of consistent policies for market scale and the fragmented nature of state-enacted renewable portfolio standards have hindered innovation and private-sector investment in renewable energy technologies.
claimRenewable Portfolio Standards (RPSs) fail to recognize actions like substituting gas-fired generation for coal-fired generation, which might reduce emissions more cost-effectively than the renewable technologies mandated by RPSs.
claimRenewable Portfolio Standards (RPSs) treat all renewable generation sources as equivalent, assuming they all displace comparable nonrenewable sources and have an equivalent net emissions impact.
claimRenewable Portfolio Standards (RPSs) often include a set-aside or carve-out requirement that mandates a minimum percentage or amount of the standard be met using a specific technology, typically solar energy.
claimRenewable Portfolio Standards (RPSs) effectively impose a tax on retail suppliers that must pay for more expensive renewable resources or Renewable Energy Certificates (RECs), which has the effect of increasing electricity prices.
claimGeneral Renewable Portfolio Standards (RPSs) are not specifically designed to improve the reliability of distribution, promote the security of energy supplies, preserve water resources, or create jobs.
claimOhio enacted a 2-year suspension of its Renewable Portfolio Standard (RPS) requirement, which would defer full compliance from 2025 to 2027 in the absence of further legislative action.
claimRenewable Portfolio Standards (RPSs) have reduced CO2 emissions, but they are not the most cost-effective method for achieving such reductions.
measurementAs of March 2013, the states of Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Washington, and Wisconsin had renewable portfolio standards or goals.
quoteFischer (2010) stated: “both the analytical and numerical modeling suggest that rate reductions are only likely at lower RPS shares. At higher RPS shares, in contrast, the implicit tax quickly dominates and electricity prices increase rapidly.”
claimAn alternative or clean energy standard is a policy similar to a Renewable Portfolio Standard (RPS) that permits requirements to be met through investments in energy efficiency or the use of various nonrenewable alternative energy resources.
measurementIn states other than restructured states, utilities reported that general Renewable Portfolio Standard (RPS) obligations, excluding solar or distributed generation set-asides, had incremental costs ranging from negative $4 to an additional $44 per MWh of renewable energy.
measurementProposals have been made to repeal Renewable Portfolio Standards (RPSs) in 18 of the 29 states that have adopted such standards.
claimEarly results from renewable portfolio standards (RPS) have been achieved with relatively small impacts on retail electricity prices, which is partly attributable to the directly measurable costs of RPS policies and the federal production tax credit.
claimState Renewable Portfolio Standards (RPSs) are policy mechanisms used to force utilities to increase their utilization of renewable energy, though they have created significant but inefficient market pull.
claimRenewable Portfolio Standards (RPSs) can either increase or decrease market prices because they subsidize renewable resources and introduce additional resources with low variable operating costs into energy markets.
measurementOf the 29 states with renewable portfolio standards, 14 states and the District of Columbia have a set-aside requirement that must be met with solar resources, 2 states have a set-aside for distributed generation, and 3 states provide triple or double credit for solar electric, distributed generation, or nonwind resources.
measurementAn analysis by Resources for the Future suggests that state Renewable Portfolio Standards (RPSs) reduced U.S. CO2 emissions by 4 percent in 2010.
claimMost studies on renewable energy policies, including those by Fischer and Newell (2008), Fischer et al. (2013), Palmer and Burtraw (2005), Palmer et al. (2010), and Tuladhar et al. (2014), agree that carbon taxes or cap-and-trade systems reduce greenhouse gas emissions more cost-effectively than Renewable Portfolio Standards (RPSs).
measurementCost containment mechanisms in renewable portfolio standard policies typically limit compliance costs to 1-4 percent of average retail rates for overall caps, or 6-9 percent of average retail rates for alternative compliance payments without an overall rate cap, according to Heeter et al. (2014).
perspectiveWhen a binding emissions trading system effectively reflects pollution costs, states and regions should evaluate replacing Renewable Portfolio Standards (RPSs) with a cap-and-trade system combined with more modest, targeted incentives for learning-by-doing.
claimA prior National Research Council study found that the combined impact of state-level Renewable Portfolio Standards (RPSs) and the federal production tax credit (PTC) on new wind power builds is only slightly greater than the impact of either policy alone.
Clean Energy Solutions Must Include Nuclear | ClearPath clearpath.org 2 facts
referenceA recent analysis of least-cost options for achieving carbon reductions in the Pacific Northwest by Energy and Environmental Economics, Inc. found that policies such as renewable portfolio standards (RPS) have unintended consequences such as oversupply and negative wholesale electricity prices that create challenges for reinvestment in existing zero-carbon resources.
perspectiveClearPath recommends that corporate leaders adopt carbon targets rather than technology-specific targets and advocate for replacing renewable portfolio standards with clean energy standards that include nuclear and other low-carbon emitting sources.
Congressional testimony of Bob Perciasepe on advanced nuclear ... c2es.org Jun 4, 2019 1 fact
claimConverting state renewable portfolio standards into clean energy standards is a policy mechanism that can support the existing nuclear fleet.
Navigating Tensions in Just Energy Transitions kleinmanenergy.upenn.edu Aug 20, 2025 1 fact
claimConflicts arise when national energy policies contradict or fail to support regional goals, such as Scotland's ambitious climate targets or US states' aggressive renewable portfolio standards.
The technical, geographical, and economic feasibility for solar ... ideas.repec.org 1 fact
referenceLee and Seo (2019) examined the sustainability of the Renewable Portfolio Standard policy instrument in South Korea, published in Sustainability, volume 11(11), pages 1-19.