Introduction
Renewable Portfolio Standards (RPS) require that a specified percentage of the electricity utilities sell comes from renewable resources. States have created these standards to diversify their energy resources, promote domestic energy production and encourage economic development.
Renewable energy policies help drive the nation’s $269 billion market as of 2022, for wind, solar and other renewable energy sources. These policies can play an integral role in state efforts to diversify their energy mix, promote economic development and reduce emissions. Roughly half of the growth in U.S. renewable energy generation since the beginning of the 2000s can be attributed to state renewable energy requirements.
It’s worth noting that several states have expanded their policies to incorporate additional resources in recent years. There is now a distinction between a “Renewable Portfolio Standard” (RPS) and what some states have labeled as a “Clean Energy Standard” (CES). The difference between a RPS and a CES comes down to how a particular state defines what is a “renewable” versus a “clean” source of energy. Clean energy typically refers to sources of energy that have zero carbon emissions.
Some of those “clean” sources may not be considered “renewable.” For instance, under some CES policies, nuclear energy is considered a “clean” energy source because it is carbon-free; it is not widely considered “renewable,” however. Conversely, biomass, which is an eligible resource under many state RPS policies, is considered “renewable” despite producing carbon emissions.
In most cases, a CES policy will include an RPS as part of the requirement. For example, California enacted its CES in 2018, which requires the state’s utilities to generate 100% clean electricity by 2045. As part of the CES, the state RPS was increased to require 60% of electricity must come from renewable sources by 2030. Following that date and benchmark, the remaining 40% of the CES can be met by any qualifying clean energy resource. Most often, these are defined as any resource that is carbon-free or carbon-neutral.
Iowa was the first state to establish an RPS; since then, more than half of states have established renewable energy targets. Thirty states, Washington, D.C., and two territories have active renewable or clean energy requirements, while an additional three states and one territory have set voluntary renewable energy goals. RPS legislation has seen two opposing trends in recent years. On one hand, many states with RPS targets are expanding or renewing those goals. Since 2018, 19 states, two territories, and Washington, D.C., have passed legislation to increase or expand their renewable or clean energy targets. On the other hand, eight states and one territory have allowed their RPS targets to expire. Montana repealed its RPS in 2021.
State Amendments to RPS/CES Legislation Since 2018
| State |
New RPS/CES Target |
By Years |
| California |
100% |
2045 |
| Colorado |
100% |
2050 |
| Connecticut |
100% |
2040 |
| Delaware |
40% |
2035 |
| Illinois |
50% |
2040 |
| Maine |
100% |
2050 |
| Maryland |
50% |
2030 |
| Massachusetts |
35% |
2030 |
| Minnesota |
100% |
2040 |
| Nevada |
100% |
2050 |
| New Jersey |
50% |
2030 |
| New Mexico |
100% |
2045 |
| New York |
70% |
2030 |
| North Carolina |
100% |
2050 |
| Oregon |
100% |
2040 |
| Rhode Island |
100% |
2033 |
| Virginia |
100% |
2045/2050 |
| Washington |
100% |
2045 |
| Washington D.C. |
100% |
2032 |
| Guam |
100% |
2045 |
| Puerto Rico |
100% |
2050 |
Most jurisdictions with a current or recently updated RPS have set targets of at least 40%. However, recent RPS legislation has seen a push toward 100% clean or renewable energy requirements. To date, 15 states, Washington, D.C., Puerto Rico, and Guam have set 100% clean or renewable portfolio requirements with deadlines ranging between 2030 and 2050. An additional five states, plus the U.S. Virgin Islands, have goals of 50% or greater.
State renewable portfolio standard policies vary widely on several elements including RPS targets, the entities they include, the resources eligible to meet requirements and cost caps. In many states, standards are measured by the percentage of retail electric sales. Iowa and Texas, however, require specific amounts of renewable energy capacity rather than percentages and Kansas requires a percentage of peak demand.
Eligible resources under an RPS vary state-by-state but often include wind, solar, biomass, geothermal and some hydroelectric facilities—depending on the size and vintage. States determine eligible resources based on their existing energy generation mix and the potential for renewable energy development in their states.
For instance, qualifying renewable energy resources in Colorado include solar, wind, geothermal, biomass, certain hydroelectric resources and emissions neutral coal-mine methane. Comparatively, eligible resources under Hawaii’s RPS include solar, wind, biomass and geothermal, in addition to energy produced from falling water, ocean water, waves and water currents. Additional eligible resources in several states include landfill gas, animal wastes, combined heat and power, and even energy efficiency.
RPS requirements can apply only to investor-owned utilities (IOUs), although many states also include municipalities and electric cooperatives (Munis and Co-ops), sometimes with a lower target. Utilities that are subject to these mandates must obtain renewable energy credits or certificates (RECs)—which represent the environmental benefits of one megawatt-hour of renewable energy generation. RECs are created when renewable energy is sent out to the grid and are used to verify that utilities are meeting their targets.
According to Lawrence Berkeley National Laboratory, 20 states and Washington, D.C., have cost caps in their RPS policies to limit increases to a certain percentage of ratepayers’ bills. Kansas caps RPS gross procurement costs.
To promote a diversified resource mix and encourage deployment of certain technologies, states have established carve-outs and renewable energy credit multipliers within their RPS for specific energy technologies, such as offshore wind or rooftop solar. Carve-outs require a certain percentage of the overall renewable energy requirement to be met with a specific technology, while credit multipliers award additional renewable energy credits for electricity produced by certain technologies. At least 21 states and Washington, D.C., have credit multipliers, carve-outs, or both for certain energy technologies in their RPS policies.