Renewables portfolio standard (RPS) policies require that a certain percentage of a retail electricity supplier's sales or new generating capacity be derived from renewable resources. Energy security and diversity, economic development, and environmental protection are the primary drivers of RPS policies. Because these policies tend to favor least-cost projects (especially large wind-energy projects) when all renewables compete, states or municipalities can choose to support higher-cost technologies or applications such as solar and distributed generation using credit multipliers or carve-outs. A credit multiplier for solar offers "extra credit" toward compliance for energy derived from solar resources. Solar carve-outs, which are more common than credit multipliers, require that a certain percentage of the RPS be met specifically with solar energy. Solar technologies eligible for compliance may vary depending on the goals of the policy.
Municipalities that have authority over their electric utility can choose to adopt an RPS policy to promote renewables and local jobs. Municipalities that do not operate their own electric utilities can consider working with state governments to encourage states to adopt an RPS policy.
Status & Trends
Twenty-nine states plus the District of Columbia and two U.S. territories have established an RPS. An additional eight states and two territories have adopted non-mandatory renewable energy goals. Although wind, biomass and hydropower are the predominant resources used to satisfy RPS obligations, a growing number of states are incorporating a solar carve-out into their RPS policies, stipulating that a portion of the required renewable energy percentage or overall retail sales be derived from solar resources. For example, New Mexico, Arizona, Maryland, Colorado, the District of Columbia, and Delaware have each set aggressive standards of 2% or greater (of the state’s electricity mix) to be generated by solar or distributed generation resources.  Sixteen states and the District of Columbia have adopted solar or broader distributed generation carve-outs or multipliers as part of their RPS policies. Of these states, five states and D.C. allow solar water heating to count towards meeting the solar carve-out.
Several states employ credit multipliers for solar or distributed generation. In addition, Nevada, Oregon, and Delaware have both a solar set-aside and a credit multiplier. Credit multipliers have not been as effective in stimulating solar deployment as a specific solar requirement., In fact, New Mexico and Maryland removed their initial solar multiplier provisions in favor of solar carve-outs.
Best practices for promoting solar through RPS policies include:
Municipalities that have authority over their electric utilities may also choose to adopt an RPS policy to promote renewable energy development. Cities leading the way in this regard include Columbia, Missouri, and Austin, Texas. The Austin City Council has adopted several resolutions ultimately directing its municipal utility, Austin Energy, to meet 35% of all energy needs through the use of renewables by 2020, including at least 200 megawatts (MW) of solar power.
DSIRE: Summary of RPS Policies in the U.S. DSIRE, 2012.
Supporting Solar Power in Renewables Portfolio Standards: Experience from the United States. Ryan Wiser, Galen Barbose and Ed Holt. Lawrence Berkeley National Laboratory (LBNL), October 2010.
Feed-in Tariff Policy: Design, Implementation, and RPS Policy Interactions. Karlynn Cory, Toby Couture and Claire Kreycik. National Renewable Energy Laboratory (NREL), March 2009.
Recommended Principles and Best Practices for State Renewable Portfolio Standards. Prepared by the State-Federal RPS Collaborative, January 26, 2009.
CESA State RPS Policy Report: Increasing Coordination and Uniformity Among State Renewable Portfolio Standards. Ed Holt. Prepared for the Clean Energy States Alliance (CESA), December 2008.
State Clean Energy Practices: Renewable Portfolio Standards. David Hurlbut. National Renewable Energy Laboratory (NREL), July 2008.
Renewable Portfolio Standards: An Opportunity for Expanding State Solar Markets. Ryan Wiser. Lawrence Berkeley National Laboratory (LBNL), State PV Peer Network Conference Call Presentation, July 11, 2008.
Renewables Portfolio Standards in the United States — A Status Report with Data Through 2007. Ryan Wiser and Galen Barbose. Lawrence Berkeley National Laboratory (LBNL), April 2008.
Renewable Electricity Standards Toolkit, Union of Concerned Scientists. 2012.
The Treatment of Renewable Energy Certificates, Emissions Allowances, and Green Power Programs in State Renewables Portfolio Standards. Edward Holt and Ryan Wiser. Lawrence Berkeley National Laboratory (LBNL), April 2007.
Renewables Portfolio Standards in the United States: A Status Update. Galen Barbose. Lawrence Berkeley National Laboratory (LBNL), December 2012.
 Unpublished data from Galen Barbose, Lawrence Berkeley National Laboratory, December 2011.
 Supporting Solar Power in Renewables Portfolio Standards: Experience from the United States, Ryan Wiser, Galen Barbose, and Ed Holt, Lawrence Berkeley National Laboratory, October 2010.
 Renewables Portfolio Standards in the United States — A Status Report with Data Through 2007, Ryan Wiser and Galen Barbose, Berkeley National Laboratory, April 2008.
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.
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