Renewable and Alternate Energy Portfolio Standards

Twenty-nine states and the District of Columbia require electric utilities to deliver a certain amount of electricity from renewable or alternative energy sources. Most of these requirements take the form of a “renewable portfolio standard” (RPS) adopted by 26 states and the District of Columbia or “alternative energy portfolio standard” (AEPS) adopted by three states, which requires a certain percentage of a utility’s power plant capacity or generation to come from renewable or alternative energy sources by a given date. The standards range from modest to ambitious, and qualifying energy sources vary. Some states also include “carve-outs” (requirements that a certain percentage of the portfolio be generated from a specific energy source, such as solar power) or other incentives to encourage the development of particular resources.

Nine states have renewable or alternate energy goals, which are not generally legally binding, as opposed to states that have RPS or AEPS that are legally binding.

Although climate change may not be the prime motivation behind these standards, the use of renewable or alternative energy can deliver significant greenhouse gas reductions. Increasing a state’s use of renewable energy brings other benefits as well, including job creation, energy security, and cleaner air. While the first RPS was established in 1983, the majority of states passed or strengthened their standards after 2000. Consequently, while many of these efforts have increased the penetration of renewables; others have not been in effect long enough to do so. Many states allow utilities to comply with the RPS or AEPS through tradeable credits. While the success of state efforts to increase renewable or alternative energy production will depend in part on federal policies such as production tax credits, states have been effective in encouraging clean energy generation.

Last Updated May 2017