U.S. Energy Information Administration logo
Skip to sub-navigation

2024 was a year of notable accomplishments. Check out the highlights of EIA products and programs this year.

Renewable energy explained Portfolio standards

What are renewable portfolio standards?

Renewable portfolio standards (RPS) and clean energy standards (CES) are either requirements or goals for energy producers or providers to supply energy from low- or zero-carbon emission sources. These policies require or encourage energy suppliers to provide their customers with a stated minimum share of energy from eligible energy resources. Most of these programs apply to electricity but some include heating fuels and energy-efficient appliances and equipment. Although no federal RPS or CES exists, over half of states have established programs. However, a federal Renewable Fuel Standard applies to transportation fuels.

Generally, RPS include renewable energy, but many states specify the types of renewable energy and technologies that qualify for the standard. Clean energy standards may include:

A photograph of a wind turbine and power lines.

Source: Stock photography (copyrighted)

did youknow

?

Over half of states have either required standards or have established voluntary goals, targets, or objectives for renewable or clean energy supply within specific timeframes.

How have renewable and clean energy programs been implemented?

State RPS and CES programs vary widely in program structure, enforcement mechanisms, extent, and application. Some programs focus on investor-owned electric utilities, but others apply to all electric utilities operating in the state.

A wide range of policies fall under the RPS or CES umbrella. In general, most of the programs set minimum requirements for the share of electricity supply (either generation or sales) from designated energy resources by a specified date. Some states do not have formal guidelines for what qualifies to meet the targets and have left implementation to regulatory processes. According to the Database of State Incentives for Renewables & Efficiency® (summary map ) as of December 2023, 28 states and the District of Columbia have established an RPS and 7 have renewable portfolio goals. Eleven states have CES or goals. In 17 states and the District of Colombia, the requirement or goal is for 100% renewable or clean electricity by 2050 or earlier.

A common feature of RPS policies is a renewable electricity credit (REC) trading system, which is often used to determine compliance with an RPS policy. A REC is generated when a renewable energy source generates and delivers one megawatthour of electricity to an electric power grid. Each utility that falls under the state program requirements must show ownership of a required number of RECs to comply with the RPS policy. Utilities can either use RECs they generate or RECs they purchase from Independent Power Producers (IPP) to show compliance. In general, only one entity—the generator or the REC holder—may use the credit. In addition to the cost-control mechanism of a REC, many RPS programs have escape clauses, or alternate compliance payments, if renewable generation exceeds a specified cost threshold. Some states may produce just enough electricity to meet RPS or CES requirements, and some may import qualifying electricity from states with excess RPS- or CES-qualifying electricity generation.

Have RPS and CES helped to increase electricity generation from renewable and clean energy sources?

States with and without RPS or CES policies have increased electricity generation from renewable resources since the first RPS was established in Iowa in 1983. A combination of government financial incentives and market conditions, as well as state RPS or CES policies and other programs, have driven increases in renewable electricity generation.

Factors that have helped utilities comply with RPS requirements include:

  • RPS-qualified generation projects that use federal incentives
  • Lower costs for wind, solar, and other renewable technologies
  • State and local policies that either reduce costs (for example, equipment rebates) or increase revenue streams (for example, net metering) associated with RPS-eligible technologies

According to a Lawrence Berkeley National Laboratory report U.S. State Renewables Portfolio & Clean Electricity Standards: 2023 Status Update: "...roughly half of all growth in U.S. renewable electricity (RE) generation and capacity since 2000 is associated with state RPS requirements, though that percentage has declined in recent years, representing 30% of all U.S. RE capacity additions in 2022. Within some regions, particularly the Northeast and Mid-Atlantic, RPS policies play a more central role in motivating RE growth."

Last updated: July 30, 2024.