Evaluating Experience with Renewables Portfolio Standards in the United States

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Increased use of renewable energy is one of several promising strategies for reducing emissions of local, regional and global air pollutants, and for hedging against volatile natural gas prices. Among the available options for encouraging renewable energy is the renewables portfolio standard (RPS). The RPS is a relatively new policy mechanism, and experience with its use has not been widely documented and evaluated. This report offers a comprehensive analysis of U.S. experience with the renewables portfolio standard (RPS), and has a goal of providing detailed information on lessons learned with this policy approach. This report specifically describes and evaluates the design, impacts, and early experience of 13 U.S. state RPS policies. These 13 policies share a common goal of encouraging renewable energy supply, but each specific RPS is designed differently. Our evaluation shows both successes and failures with this policy mechanism – some state RPS policies are positively impacting renewable energy development, while others have been poorly designed and will do little to advance renewable energy markets. We emphasize the importance of policy design details, and specifically highlight critical design pitfalls that have been commonly experienced. Though experience with the RPS is still limited, we have now gained some knowledge of the conditions and design features necessary to make an RPS policy work. An important objective of this report is therefore to identify and describe broad policy design principles and specific best practice design elements that might be used to guide the design of future renewables portfolio standards.

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