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The renewables portfolio standard (RPS) is a policy that obligates each retail seller of electricity to include in its resource portfolio (the resources procured by the retail seller to supply its retail customers) a certain amount of electricity from renewable energy resources, such as wind and solar energy. The retailer can satisfy this obligation by either (a) owning a renewable energy facility and producing its own power, or (b) purchasing renewable electricity from someone else's facility.
Some RPS statutes or rules allow retailers to trade their obligation as a way of easing compliance with the RPS. Under this trading approach, the retailer, rather than maintaining renewable energy in its own energy portfolio, instead purchases tradable credits that demonstrate that someone else has generated the required amount of renewable energy.
RPS policies are implemented at the state level, and vary considerably in their requirements with respect to their time frame, resource eligibility, the treatment of existing plants, arrangements for enforcement and penalties, and whether they allow trading of renewable energy credits.
Using an RPS has recently become one of the most popular ways to encourage greater use of renewable energy. An RPS is an efficient method of meeting policy targets for greater use of renewable energy, and can be implemented in both regulated and restructured markets.
Some of the following documents are available as Adobe Acrobat PDFs. Download Acrobat Reader.
Pursue one of the following links for more information.
- The Renewables Portfolio Standard: A Practical Guide (PDF 359 KB) — Published by the National Association of Regulatory Utility Commissioners, February 2001.
- Status of RPS in the states — See a table (PDF 106 KB) of RPS implementation.
- EERE documents about renewables portfolio standards.
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