Environmental Energy Technologies Division • Energy Analysis Department 1

Renewables Portfolio Standards 

in the United States:

A Status Update 

Galen Barbose

Lawrence Berkeley National Laboratory

2012 National Summit on RPS

Washington D.C.

December 3, 2012
Environmental Energy Technologies Division • Energy Analysis Department 2

Presentation Outline

1) Overview of State RPS Landscape

2) Impacts on Renewables Development

3) Compliance Experience and Related 

Issues and Challenges
Environmental Energy Technologies Division • Energy Analysis Department 3

What Is a Renewables Portfolio Standard?

Renewables Portfolio Standard (RPS):

• A requirement on retail electric suppliers...

• to supply a minimum percentage or amount 

of their retail load...

• with eligible sources of renewable energy.

Typically backed with penalties of some form

Often accompanied by a tradable renewable energy 

credit (REC) program, to facilitate compliance

Never designed the same in any two states
Environmental Energy Technologies Division • Energy Analysis Department 4

RPS Policies Exist in 29 States and D.C.;

7 More States Have Non-Binding Goals

Most policies established through state legislation, but some initially 

through regulatory action (NY, AZ) or ballot initiatives (CO, MO, WA)

Non-Binding Goal

Source: Berkeley Lab

WI: 10% by 2015

NV: 25% by 2025

TX: 5,880 MW by 2015

PA: 8.5% by 2020

NJ: 22.5% by 2020

CT: 23% by 2020

MA: 11.1% by 2009 +1%/yr

ME: 40% by 2017

NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

CA: 33% by 2020 

MN: 25% by 2025

Xcel: 30% by 2020

IA: 105 MW by 1999 

MD: 20% by 2022

RI: 16% by 2019

HI: 40% by 2030

AZ: 15% by 2025 

NY: 30% by 2015

CO: 30% by 2020 (IOUs)

10% by 2020 (co-ops and munis)

MT: 15% by 2015

DE: 25% by 2025

DC: 20% by 2020

WA: 15% by 2020

NH: 24.8% by 2025

OR: 25% by 2025 (large utilities)

5-10% by 2025 (smaller utilities)

NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops and munis)

IL: 25% by 2025

Mandatory RPS

ND: 10% by 2015 VT: 20% by 2017

MO: 15% by 2021 VA: 15% by 2025

OH: 12.5% by 2024

SD: 10% by 2015

UT: 20% by 2025

MI: 10% by 2015

KS: 20% of peak 

demand by 2020

OK: 15% by 2015

AK: 50% by 2025

Notes: Compliance years are designated by the calendar year in which they begin. Mandatory standards or non-binding 

goals also exist in US territories (American Samoa, Guam, Puerto Rico, US Virgin Islands)
Several States Have Adopted Broader Clean 

Energy Standards or Efficiency Standards

• Clean energy 

standards (CES’) 

adopted in parallel to 

RPS (MI, OH, PA) or 

in lieu of an RPS (WV)

• IN has a voluntary 

clean energy goal

• Many states have 

adopted stand-alone 

energy efficiency (EE) 

resource standards or 

allow EE to qualify 

within an RPS or CES

Environmental Energy Technologies Division • Energy Analysis Department 5

 Source: NREL
Environmental Energy Technologies Division • Energy Analysis Department 6

Existing RPS’ Apply to 54% of Total U.S. 

Retail Electricity Sales in 2012

U.S. Electrical Load with Active State RPS Obligations

(Historical and Projected)

0%

10%

20%

30%

40%

50%

60% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

POUs

IOUs & ESPs

ESPs

IOUs Percent of Total U.S. Retail Sales
Environmental Energy Technologies Division • Energy Analysis Department 7

State RPS Policies Feature

Significant Design Differences

• Renewable purchase targets 

and timeframes

• Entities obligated to meet 

RPS, and use of exemptions

• Eligibility of different 

renewable technologies

• Whether existing renewable 

projects qualify

• Treatment of out-of-state 

generators

• Whether technology setasides or other tiers are used

• Use of credit multipliers for 

favored technologies

• Allowance for RECs, and REC 

definitions

• Methods to enforce compliance

• Existence and design of cost 

caps

• Compliance flexibility rules, and 

waivers from compliance

• Contracting requirements and 

degree of regulatory oversight

• Compliance filing and approval 

requirements

• Compliance cost recovery 

• Role of state funding 

mechanisms
Environmental Energy Technologies Division • Energy Analysis Department 8

RPS Increasingly Designed to Support Resource 

Diversity: Most Commonly Solar and DG

16 states + D.C. have solar or DG set-asides, sometimes combined 

with credit multipliers; 3 other states only have credit multipliers

Ten states created 

solar/ DG setasides since 2007: 

DE, IL, MA, MD, MO, 

NC, NH, NM, OH, OR Differential support for solar/DG provided via long-term contracting programs 

(CT, DE, NJ, and RI) and via up-front incentives/SREC payments NV: 1.5% solar by 2025

2.4x multiplier for central PV

2.45x multiplier for distributed PV

PA: 0.5% solar PV by 2020

NJ: 4.1% solar electric by 2027

AZ: 4.5% customer-sited DG 

by 2025 (half from residential)

NY: 640 GWh retail DG by 2015

CO: 3% DG by 2020 for IOUs 

(half from retail DG)

3x multiplier for co-ops and 

munis for solar installed before 

July 2015

DC: 2.5% solar by 2023

WA: 2x multiplier for DG

NM: 4% solar electric by 2020, 

0.6% customer-sited DG by 2020

DE: 3.5% solar by 2025

3x multiplier for solar installed 

before Jan. 2015 (applies only to 

solar used for general RPS target)

MD: 2% solar by 2020

Set-aside

Multiplier

NC: 0.2% solar by 2018

NH: 0.3% solar electric by 2014

Set-aside with multiplier

TX: 2x multiplier for all non-wind

OH: 0.5% solar electric by 2024

MA: 456 GWh customer-sited 

solar PV (no specified target year)

MO: 0.3% solar electric by 2021

MI: 3x multiplier for solar

OR: 20 MW solar PV by 2020

2x multiplier for PV installed 

before 2016

IL: 1.5% solar PV by 2025,

1% DG by 2015 (50% <25 kW)

Note: Compliance years are designated by the calendar year in which they begin

Source: Berkeley Lab
Environmental Energy Technologies Division • Energy Analysis Department 9

Enactment of New RPS Policies Is Waning, 

But States Continue to Hone Existing Policies

CO 

(2007)

HI

(2005)

IL

(2008)

MA 

(2003)

CT

(2000)

M D

(2006)

DC

(2007)

NH

(2008)

M I

(2012)

ME 

(2000)

PA 

(2001)

NJ

(2001)

NY 

(2006)

DE

(2007)

NC

(2010)

M O

(2011)

IA

M N

(2002)

AZ

(1999)

NV

(2001)

WI 

(2000)

T X

(2002)

NM

(2002)

CA

(2003)

RI 

(2007)

M T

(2008)

WA

(2012)

O R

(2011)

OH 

(2009)

KS

(2011)

1983 1991 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

IA MN AZ MN NM CT NJ CT AZ CA DC HI CO CA IL

WI NV MN NM CO CA CO DE IL DE CT MA

NV PA NV CT CT HI ME IL DC MD

TX HI DE MA MN MA DE NJ

NJ MD MD NV MD IL NH

WI ME NJ O R NJ MA O H

MN RI NY MD

NJ NC

NM WI

PA

TX

Enactment (above timeline)

( ) Year of First Requirement 

Enactment (above timeline)

Major Revisions (below timeline)

Year of First Requirement
Environmental Energy Technologies Division • Energy Analysis Department 10

State-Specific RPS Developments 

(2011-2012)

• CA: Increased/extended RPS to 33% by 2020 with specified limits on unbundled RECs and 

firmed/shaped products

• CT: Introduced long-term REC contracting program for small renewables

• DC: Increased solar set-aside; adopted declining SACP schedule; restricted solar set-aside 

eligibility to projects <5 MW connected to DC distribution system

• DE: Transferred compliance obligation to regulated distribution service provider; created longterm SREC contracting program

• IL: Created DG set-aside with procurement by IPA under multi-year contracts

• MA: Adopted 10-year declining SACP schedule with 5% annual reductions, and tightened 

biomass eligibility rules

• MD: Accelerated solar set-aside, and expanded solar set-aside eligibility to include solar water 

heating; expanded Tier 1 eligibility to include waste-to-energy and several others

• NC: Expanded eligibility to include direct load control/demand response

• NJ: Accelerated solar set-aside; established 15-year SACP schedule; extended SREC lifetime

• NH: Created carve-out for thermal energy resources; reduced Class I targets while increasing 

targets for Class III and IV; reduced ACPs for most tiers; loosened Class I eligibility rules

• OH: Expanded eligibility to include waste energy recovery and several specific cogeneration 

plants

• WI: Expanded eligibility to include new large hydropower
Environmental Energy Technologies Division • Energy Analysis Department 11

General Trends in Recent RPS Revisions

• Expanding resource eligibility (waste-to-energy, hydropower, 

biomass co-firing, solar thermal)

• Increased stringency of RPS purchase targets (though 

momentum has slowed)

• Adoption of resource-specific set-asides (though momentum 

there has also slowed)

• Honing solar set-aside provisions

– Eligibility rules (size, location, etc.)

– SACP schedules

– Contracting mechanisms

• Efforts to address REC oversupply/volatility (especially 

SRECs – e.g., by accelerating or increasing targets)
Political and Legal Challenges to RPS 

Policies Have Been Mounting

• Legislation in roughly ten states was introduced in 2011-

2012 to repeal or roll-back RPS policies

– None of these efforts have succeeded to-date

• While other legislation has sought revisions that may result in 

a “weakening” RPS policies

– E.g., by expanding eligibility, reducing ACPs 

• Legal issues have also been raised in court cases and 

regulatory proceedings

– Commerce Clause issues, often tied to geographic eligibility 

rules (MA, CO, CA, MO)

– Challenges to the jurisdictional authority of the PUC to enact an 

RPS (AZ)

Environmental Energy Technologies Division • Energy Analysis Department 12
Environmental Energy Technologies Division • Energy Analysis Department 13

Presentation Outline

1) Overview of State RPS Landscape

2) Impacts on Renewables Development

3) Compliance Experience and Related 

Issues and Challenges
Environmental Energy Technologies Division • Energy Analysis Department 14

Experience with State RPS Compliance 

Obligations is Growing

Operational Experience with State RPS Policies

(number of major compliance years completed-to-date)

< 1 year 1 – 2 years 3 – 4 years 5 – 6 years 7 – 8 years > 8 years

Colorado Arizona

Delaware California

Maryland Iowa

Hawaii New York Maine

Kansas Illinois New Mexico Massachusetts

Missouri Montana Pennsylvania Connecticut Nevada

Michigan Oregon New Hampshire Rhode Island Minnesota New Jersey

Washington North Carolina Ohio Washington D.C. Wisconsin Texas
Environmental Energy Technologies Division • Energy Analysis Department 15

State RPS Policies Appear to Be Motivating 

Substantial Renewable Capacity Development

Cumulative and Annual Non-Hydro Renewable Energy 

Capacity in RPS and Non-RPS States, Nationally

Though not an ideal metric for RPS-impact, 63% of the 53 GW of 

non-hydro renewable additions from 1998-2011 (33 GW) occurred in 

states with active/impending RPS compliance obligations

10,000

20,000

30,000

40,000

50,000

60,000

70,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nameplate Capacity (MW)

Cumulative Capacity

RPS

Non-RPS

0

2,000

4,000

6,000

8,000

10,000

12,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nameplate Capacity (MW)

Annual Capacity Additions

RPS

Non-RPS
Environmental Energy Technologies Division • Energy Analysis Department 16

State RPS’ Have Largely Supported Wind, 

Though Solar Has Become More Prominent

RPS-Motivated* Renewable Energy Capacity Additions 

from 1998-2011, by Technology Type

* Renewable additions are counted as “RPS-motivated” if and only if they are located in a state with an RPS policy and 

commercial operation began no more than one year before the first year of RPS compliance obligations in that state. On an 

energy (as opposed to capacity) basis, wind energy represents approximately 86%, biomass 8%, geothermal 3%, and solar 3% 

of cumulative RPS-motivated renewable energy additions from 1998-2011, if estimated based on assumed capacity factors.

89%

1 %

4 %

6 %

Cumulative RPS Capacity Additions 

(1998-2011)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nameplate Capacity (MW)

Annual RPS Capacity Additions

Geothermal

Biomass

Solar

Wind
RPS Resource Diversity Is Greater in Some 

Regions, but Still Remains Limited

17

RPS-Motivated* Renewable Energy Capacity Additions 

from 1998-2011, by Region and Technology Type

*Renewable additions are counted as “RPS-motivated” if and only if they are located in a state with an RPS 

policy and commercial operation began no more than one year before the first calendar year of RPS compliance 

obligations in the host state.

0

4,000

8,000

12,000

16,000

20,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

New England New York 

& MidAtlantic

California Non-CA 

West

Midwest Texas

Capacity Additions (Nameplate MW)

% of Capacity Additions (Nameplate MW)

Solar

Geothermal

Biomass

Wind

Total MW 

(right axis)
Environmental Energy Technologies Division • Energy Analysis Department 18

Impact of Solar/DG Set-Asides Is Growing: 

1,500 MWac PV from 2000-2011

Set-asides also benefiting solar-thermal electric (CSP): 1 MW (Arizona) 

constructed in 2006 and 64 MW (Nevada) in 2007

0 %

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percent of U.S. Annual 

Grid-Connected PV Installations (%)

MO

I L

NH

NM

NC

MA

OH

DE

MD

DC

P A

CO

NV

NY

AZ

NJ

Percent of U.S. annual grid-connected 

PV capacity additions, driven by solar/DG 

set-asides [right axis]

Percent of U.S. annual grid-connected PV capacity 

additions, excluding California, driven by solar/DG 

set-asides [right axis]

Annual Grid-Connected PV Installations 

for Solar/DG Set-Asides (MWac)
Environmental Energy Technologies Division • Energy Analysis Department 19

Solar Becoming An Increasingly Competitive 

Resource for General RPS Obligations

Wind facing increased 

competition in California 

from solar; same is true 

elsewhere in SW and, 

to a lesser extent, in 

other regions

Increased competition 

driven by price 

reductions for utilityscale solar, as well as 

by relative ease of 

siting and delivery

More than 20 GW of contracts 

with new renewable generators 

signed in California since 2002*

Wind 46%

Solar 49%

Geothermal 1%

Biomass/MSW 3%

Small hydro <1%

*Based on CPUC RPS contract database for IOUs and analysis of 

contract announcements by POUs
Environmental Energy Technologies Division • Energy Analysis Department 20

Future Impacts of Existing RPS Policies Are 

Projected To Be Relatively Sizable

~93 GW of 

new* RE by 

2035, if full 

compliance is 

achieved 

(102 GW including 

voluntary goals)

6% of projected 

generation in 2035; 

32% of projected 

load growth from 

2000-2035

* “new RE” is defined based on state-specific distinctions between new vs. existing or on the year in 

which the RPS was enacted; it does not represent new renewables relative to current supply

0 5 1 0 1 5 2 0 2 5 3 0

IA

RI

ME

NH

MT

DC

DE

KS

HI

WI

NV

CT

NM

MI

NC

M...

OR

NY

AZ

MD

PA

WA

CO

MA

OH

MN

T X

NJ

IL

CA

New Renewable 

Capacity by 2035 

(Nameplate GW)

0 % 5 % 10% 15% 20% 25% 30% 35%

IA

NC

T X

MI

KS

PA

WI

NY

MO

AZ

ME

DC

MT

OH

WA

MD

NV

RI

NH

CO

NM

CT

OR

DE

IL

NJ

CA

MN

MA

HI

New Renewable 

Generation by 2035 

(Percent of Statewide 

Retail Sales)
State RPS, and Proposed Federal RPS, Require 

Fewer RE Additions than Experienced in 2008-11

Environmental Energy Technologies Division • Energy Analysis Department 21

Recent Renewable Capacity Additions (2008-2011) 6-11 GW/yr

Average Annual Renewable Capacity Additions (2012-2020)

State RPS Requirements 4-5 GW/yr

Proposed Federal RPS (Bingaman 2010) + State RPS 4-11 GW/yr

 Continued growth at 2008-11 rate exceeds level required to meet state 

RPS’; would be sufficient to meet the most recent Federal RPS proposal

 Federal clean energy standards (CES) could yield more or less RE 

capacity than historical growth, depending on the specific proposal

 New/increased state RPS policies appear less likely going forward in near 

term (policy weakening possible)

 Demand from non-RPS markets (green power, IRP, least cost) needed to 

maintain 2008-11 installation rate

Recent RE capacity additions vs. RE additions required to meet 

current state RPS policies and proposed Federal RPS
0

2,000

4,000

6,000

8,000

10,000

0

200

400

600

800

1,000

1,200

2010 2015 2020 2025 2030 2035

NJ

IL

A Z

MD

P A

OH

CO

NM

MA

D E

D C

NC

NY

NV

MO

NH

OR

Required Annual 

Capacity Additions

(left axis)

Cumulative Capacity

Required 

(right axis)

Cumulative Solar Capacity (MWac

)

Annual Solar Capacity Additions (MWac

)

Environmental Energy Technologies Division • Energy Analysis Department 22

Future Impacts of Solar/DG Set-Asides Are 

Also Projected To Be Substantial

 Cumulative capacity requirement grows to 8,500 MW by 2025

 Required average annual solar capacity additions of 750 MW/yr

from 2012-15, 450 MW/yr from 2016-25

Solar/DG Set-Aside Compliance Requirements
Environmental Energy Technologies Division • Energy Analysis Department 23

Presentation Outline

1) Overview of State RPS Landscape

2) Impacts on Renewables Development

3) Compliance Experience and Related 

Issues and Challenges
Environmental Energy Technologies Division • Energy Analysis Department 24

Targets Largely Met with Renewable Energy 

or RECs; Isolated Struggles Apparent

Percent of RPS Target Met with Renewable Electricity or RECs

(including available credit multipliers and banking, but excluding ACPs and borrowing)

Note: Percentages less than 100% do not necessarily indicate that “full compliance” was not technically achieved, because 

of ACP compliance options, funding limits, or force majeure events. 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AZ

CA

CO

CT

D C

D E

HI

IA

IL

MA

MD

ME

MN

MTNCNH

NJ

NM

NVNY

OH

PA

RI

TX

WI

2009

2010

2011
Environmental Energy Technologies Division • Energy Analysis Department 25

Achievement of Solar/DG Set-Aside Targets 

Has Steadily Increased in Many States

Retirement of solar electricity/RECs relative to set-aside 

requirements has often been mixed in initial compliance years

States with Large (>150 MW) Solar/DG Targets in 2011

Note: "Percent of Solar/DG Target Met with Solar/DG Electricity or RECs" excludes ACPs but includes applicable credit 

multipliers. In cases where this figure is below 100%, suppliers may not have been technically out of compliance due to solar 

ACP compliance options, funding limits, and force majeure provisions.

0%

20%

40%

60%

80%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

AZ (225 MW)*

CO (231 MW)*

NJ (336 MW)*

NV (170 MW)*

NY (227 MW)*

Percent of Solar/DG Target Met 

with Solar/DG Electricity or RECs

*Equivalent 

solar/DG capacity

(MW) required in 

2011 at a 15% 

capacity factor
Environmental Energy Technologies Division • Energy Analysis Department 26

REC Prices Are Volatile, Creating 

Challenges for RE Project Financing

• REC prices historically volatile, and dropped substantially 

in many regions recently (main tier and solar RECs)

• Depressed REC prices reflect “over-supply” for RPS needs 

in some markets

• Wholesale electricity prices have also declined substantially over 

the same period...

• In concert with low REC prices, makes RE economics more 

challenging in near term, despite drop in RE costs

• States have considered and implemented various 

measures to mitigate these effects

• Increasing or accelerating RPS targets

• Long-term contracting programs/requirements

• Price support mechanisms

• Various other approaches
Environmental Energy Technologies Division • Energy Analysis Department 27

Main Tier and Class I RECs

$ 0

$10

$20

$30

$40

$50

$60

$70

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Trading Month

CT Class I DC Tier I DE Class I

IL Wind MA Class I MD Tier I

ME New NH Class I NJ Class I

OH In-State PA Tier I RI New

T X

Avg Monthly REC Price (2011$/MWh)

Sources: Evolution Markets (through 2007) and Spectron (2008 onward). Plotted values are the last 

trade (if available) or the mid-point of Bid and Offer prices, for the current or nearest future compliance 

year traded in each month. 
Environmental Energy Technologies Division • Energy Analysis Department 28

Solar RECs

$ 0

$100

$200

$300

$400

$500

$600

$700

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Avg. Monthly SREC Price ($2011/MWh)

Trading Month

DC DE

MA MD

NC NH

NJ O H

PA

Sources: Spectron, SRECTrade, Flett Exchange, PJM-GATS, and NJ Clean Energy Program. 

Depending on the source used, plotted values are either the mid-point of monthly average bid and offer 

prices, the average monthly closing price, or the weighted average price of all RECs transacted in the 

month, and generally refer to SREC prices for the current or nearest future compliance year traded in 

each month. 
Environmental Energy Technologies Division • Energy Analysis Department 29

Rate Impacts of State RPS Policies Have 

Generally Been ‘Modest’ So Far (< 5%)

Translating REC prices or state-specific funding to rate impacts 

in 2009 and 2010 yields the results shown below

• Rate impacts of RPS policies in states that are dominated by long-term contracts 

are generally unknown, but anecdotal evidence suggests limited impacts so far, and 

quite possibly even rate reductions in several states

• Rate impacts differ due 

to target levels, 

REC/ACP prices, and 

presence of set-asides

• Rate impacts in some 

states (AZ, CO, NY) 

include up-front 

incentives for solar/DG, 

which contribute to 

compliance in future 

years

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

AZ

CO

CT

DC

DE

IL

MA

MD

ME

NH

NJ

NY

PA

RI

Estimated Electricity Rate Impact 

(% of average retail rate)

2009

2010

States not included if data on incremental RPS compliance costs are unavailable (CA, IA, HI, MN, MT, 

NC, NM, NV, OH, TX, WI) or if RPS did not apply in 2009-10 (KS, MI, MO, OR, WA).
Environmental Energy Technologies Division • Energy Analysis Department 30

Given Uncertainty in Future Costs, Cost 

Caps of Various Designs Are Common

1) ACP with automatic cost recovery: MA, ME, NH, NJ, RI

2) ACP with possible cost recovery: DC, DE, MD, OR

3) Retail rate / revenue requirement cap: CO, KS, IL, MD, MO, NM, OH, 

OR, WA

4) Renewable energy contract price cap: MT, NM

5) Per-customer cost cap: MI, NC, NM 

6) Renewable energy fund cap: NY 

7) Financial penalty may serve as cost cap: CT, HI, OH, PA, TX

Emerging cost-containment issues:

• Challenges in calculating “incremental” RPS procurement costs in order to 

assess whether cap is reached (especially with bundled RE contracts)

• Costs for wind/solar have declined, but shale gas has reduced electricity 

market prices  net impact on incremental RPS costs, as well as on 

whether cost caps are limiting, TBD
Environmental Energy Technologies Division • Energy Analysis Department 31

Most States Have Capped Rate Impacts 

Well Below 10% (13 States Below 5%)

• No explicit cap on incremental compliance costs in 8 states (AZ, CA, IA, KS, HI, NV, 

PA, WI), though KS caps gross RPS procurement costs and CA is currently 

developing its cost containment mechanism

Many states cost containment mechanisms can be translated 

into an estimated maximum increase in retail rates

0%

5%

10%

15%

NJ RI MA NH CT D C ME MD OR WA D E TX MI OH NM NY CO NC IL MO MT

Maximum Incremental RPS Compliance Costs 

(Percentage Increase in Average Retail Rates)

Maximum Effective Retail Rate Increase
RPS Compliance Experience-to-Date: 

In a Nutshell

• Growing experience with active compliance obligations, 

though many states still at relatively early stage in trajectory

• Generally high levels of compliance achieved thus far, and 

over-supply exists in a number of states (particularly for 

solar set-asides)

• REC price volatility and long-term contracting needs are 

perennial challenges, but states have made progress in 

addressing issues

• Significant RE growth required, but well in-line with pace of 

RE additions in recent years

• Compliance costs have thus far remained relatively modest, 

but concerns exist about increasing costs and potentially 

binding cost caps

Environmental Energy Technologies Division • Energy Analysis Department 32
Environmental Energy Technologies Division • Energy Analysis Department 33

Other Emerging and Continuing Issues 

Facing State RPS Programs

• Addressing the dual desires for liquid RE markets and instate benefits in the face of the Commerce Clause

• Managing and anticipating interactions between state and 

possible future Federal policies (or changes to existing 

Federal policies)

• Addressing the other barriers to renewable energy 

deployment: transmission, integration, siting, etc.
Thank You!

For further information:

LBNL renewable energy publications:

http://emp.lbl.gov/research-areas/renewable-energy

Contact information:

Galen Barbose, glbarbose@lbl.gov, 510-495-2593

Ryan Wiser, rhwiser@lbl.gov, 510-486-5474

Environmental Energy Technologies Division • Energy Analysis Department 34
Extra Slides

Environmental Energy Technologies Division • Energy Analysis Department 35
Environmental Energy Technologies Division • Energy Analysis Department 36

Structure of RPS: RPS Compliance 

Models Vary Substantially

Regulated Markets

Dominated by long-term 

bundled contracts for 

electricity and RECs

Utility RFP solicitations or 

bilateral negotiations, with 

regulatory oversight

Restructured Markets

More often dominated by 

short-term trade in RECs, 

without PUC oversight

Developers often sell 

electricity and RECs 

separately

Two states require a government-directed agency to conduct 

procurements under the RPS: New York and Illinois
RPS Policies Are Increasingly Being 

Designed to Support Resource Diversity

Environmental Energy Technologies Division • Energy Analysis Department 37

Set-Asides Credit Multipliers General Technology Specific Technology Specific Application

Class I vs. II: CT, DC, DE, 

MA, MD, ME, NH, NJ

Solar Energy: DC, DE, IL, MA, 

MD, MO, NC, NH, NJ, NM, NV, 

OH, OR, PA

Wind Energy: IL, ME (goal), MN, 

NJ (offshore), NM

Existing Biomass/Methane: NH

Existing Hydropower: NH

Thermal: NH

Geothermal or Biomass: NM

Swine Waste: NC

Poultry Waste: NC

Non-Wind: TX (goal)

Distributed Generation: AZ, 

CO, IL, NM, NY

Community Ownership: MN 

(goal), MT (wind), OR 

(goal, community and small 

scale)

Solar Energy: DE (general 

RPS), MI, CO (POUs), NV 

(PV), OR

Wind Energy: DC, MD, DE 

(offshore)

Methane: DC, MD

Fuel Cells: DE

Waste Tires: NV

Non-Wind: TX

Distributed Generation: NV 

(PV), WA

Community Ownership: CO, 

ME

No Differential Support: CA, HI, IA, KS, WI

Set Asides: Requirements that some portion of the RPS come from certain 

technologies, technology types, or applications

Credit Multipliers: Provides selected technologies or applications more 

credit than other forms of generation towards meeting the RPS

Resource-Specific Contracting Targets: Requirements that regulated 

utilities enter into long-term contracts for minimum quantities of specific 

resource types
Environmental Energy Technologies Division • Energy Analysis Department 38

Geographic Eligibility and Electricity 

Delivery Rules Vary Considerably

Variation reflects differing:

• wholesale market structure 

and geography

• state interests in supporting 

in-state or in-region RE

• interpretations of the 

requirements imposed by the 

Interstate Commerce Clause

Table provides examples:

many states employ multiple 

requirements, and therefore 

would fit in multiple rows

Geographic Eligibility and Delivery 

Requirements (Main Tier) Examples

In-state generation requirement HI, IA

In-region generation requirement DC, MI, MN, OR, PA

Electricity delivery required to state or to LSE

Direct transmission inter-tie between generators 

and state TX

Broader delivery requirements to state or to LSE AZ, CA, KS, MT, NM, 

NV, NY, OH, WI

Electricity delivery required to broader region 

Generators anywhere outside region must deliver 

electricity to region DE, ME, NJ, WA

Generators in limited areas outside region must 

deliver electricity to region

CT, DC, MA, MD, NH, 

RI

In-state generation encouragement

In-state multipliers CO, MO 

Cost-effectiveness test IL

Limit on RECs from out-of-state generators NC
Environmental Energy Technologies Division • Energy Analysis Department 39

Enforcement Actions Have 

Thus Far Been Limited

• Enforcement mechanisms vary, and one should not assume that 

strictly failing to meet RPS targets leads to enforcement actions

• Alternative compliance payments (ACPs) totaled $66 million in 

2010

• Penalties have been levied in CA, CT, MT, OH, PA, and TX

• Lack of compliance has sometimes been excused

Enforcement Mechanisms States

ACP, Automatic Cost Recovery MA, ME, NH, NJ, RI

ACP, Possible Cost Recovery DC, DE, MD, OR

Explicit Financial Penalties, No Automatic Cost Recovery CA, CT, KS, MI, MO, MT, PA, OH, TX, WA, WI

Discretionary Financial Penalties, No Cost Recovery AZ, CO, HI, MN, NV

Enforcement at PUC Discretion NC, NM

Not Applicable IA, IL, NY