Renewable Portfolio Standards: How US States Are Driving Clean Energy

In the absence of a federal clean energy standard, U.S. states have taken the lead in driving renewable energy adoption through Renewable Portfolio Standards (RPS) — also called Renewable Energy Standards (RES). As of early 2019, 29 states plus Washington D.C. and three U.S. territories had mandatory RPS policies, according to the National Conference of State Legislatures (NCSL).

What Is an RPS?

An RPS requires electricity utilities to source a specified percentage of their power from eligible renewable energy sources — typically wind, solar, geothermal, and biomass. Utilities that fail to meet their targets must purchase Renewable Energy Certificates (RECs) or pay an alternative compliance payment.

Leading States

California

California has the most ambitious RPS in the country. In September 2018, Governor Jerry Brown signed Senate Bill 100, requiring 100% of California's electricity to come from carbon-free sources by 2045. The intermediate target is 60% renewable electricity by 2030. California already generated approximately 29% of its electricity from renewables (excluding large hydro) in 2018, according to the California Energy Commission.

New York

New York's Clean Energy Standard, adopted in 2016, requires 50% renewable electricity by 2030. In 2019, Governor Andrew Cuomo signed the Climate Leadership and Community Protection Act (CLCPA), one of the most comprehensive climate laws in U.S. history, targeting 70% renewable electricity by 2030 and 100% zero-emission electricity by 2040.

Texas

Texas operates the largest RPS programme by absolute capacity. The state's original 1999 RPS target of 2,000 MW was expanded to 10,000 MW by 2025 in 2005. Texas surpassed this target years ahead of schedule — by 2019, the state had over 28 GW of installed wind capacity alone.

Hawaii

Hawaii has the most aggressive near-term RPS target: 100% renewable electricity by 2045, signed into law in 2015. The state generated approximately 26% of its electricity from renewables in 2018, with solar playing an increasingly dominant role.

How RECs Work

Renewable Energy Certificates (RECs) are tradeable instruments that represent the environmental attributes of one megawatt-hour (MWh) of renewable electricity generation. Utilities can purchase RECs to meet their RPS obligations even if they cannot physically deliver renewable power to all customers.

The REC market creates a financial incentive for renewable energy development beyond direct power purchase agreements.

Impact on Renewable Deployment

States with RPS policies have consistently deployed more renewable energy than states without them. A 2018 Lawrence Berkeley National Laboratory study found that RPS policies were responsible for approximately half of all U.S. renewable electricity growth between 2000 and 2015.

As of 2019, states with RPS policies collectively accounted for approximately 60% of U.S. renewable electricity generation, despite representing only about 55% of total U.S. electricity consumption.