Renewables Portfolio Standard Policy Has Driven 45% of Capacity Addition in the U.S.

In 2019, 32% of solar capacity additions and 13% of wind capacity additions served RPS requirements


The non-hydro power renewable energy generation has advanced by 402 TWh since 2000 in the U.S., of which 189 TWh or 45% of overall growth is because of Renewables Portfolio Standard (RPS) policy requirements, according to a new report by Lawrence Berkeley National Laboratory of the U.S. Department of Energy (DOE).

A renewable portfolio standard is a regulatory mandate to enhance power production from renewable sources like solar, wind, biomass, and other alternatives to fossil and nuclear electric generation. RPS is similar to the renewable purchase obligation (RPO) requirement in India.

In the U.S., 82 GW or 50% of the total renewable energy capacity additions since 2000 served RPS compliance requirements. However, RPS’ contribution to overall renewable energy capacity declined to 23% in 2019 from 60% in 2008-14 due to a boom in the renewable energy market and the emergence of utility-scale solar in non-RPS markets.

In 2019, 32% of solar capacity additions and 13% of wind capacity additions served RPS requirements.

RPS policies currently exist in 30 states of the United States, of which eight states – Arizona, Maryland, New Mexico, Nevada, Virginia, Washington, Maine, and the district of Columbia – enacted higher RPS targets or created new clean energy targets since the start of 2019.

Several states also announced 100% zero-carbon electricity targets or targets for other zero-emission resources in line with their RPS policies.

The report stated that 90 GW of new renewable energy capacity is required by 2030 for the growth of RPS demands. The RPS growth would also need total U.S. renewable energy generation to reach 17% by 2030 from 12% in 2019.

The RPS growth will advance with rising targets and load growth and reach 630 TWh by 2030 and 840 TWh by 2050.

According to the report, RPS demands helped Northeast and Mid-Atlantic regions surpass their actual renewable growth, while the West region’s renewable energy growth was mainly due to net-metered solar in California.

RPS compliance cost averaged around 2.6% of retail power bills in 2019, compared to 2.3% in 2018. Costs ranged from 0.5% to 4.5% of retail power bills across most states in 2019.

Renewable electricity certificate (REC) prices for primary tier RPS obligations shot up in 2019 to $40/MWh and remained constant in 2020 in the New England market.

REC are market-based instruments used to incentivize power generators to reduce or eliminate harmful emissions while generating power.

In India, only four states – Karnataka, Rajasthan, Telangana, and Andhra Pradesh – have crossed their solar Renewable Purchase Obligations (RPO) targets for the financial year (FY) 2019-20. States like Haryana and Bihar are far behind in achieving RPO targets. Haryana has a deficit of 96%, and Bihar has 76% for FY 2020.

Mercom had earlier reported that Bihar and Punjab were allowed to carry forward their RPO shortfall due to the COVID-19 pandemic. Karnataka also extended the deadline for compliance for FY 2020.

Harsh Shukla is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.

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