State-specific Renewables Portfolio Standards (RPS) are the most important policy drivers of renewable electricity capacity expansion in the United States. An RPS is a state policy that requires electricity providers to obtain a minimum percentage of their power from renewable resources by a certain date. Currently 22 states plus the District of Columbia have RPS policies in place. Together these states account for more than 42% of electricity sales in the United States.

In the report “The Treatment of Renewable Energy Certificates, Emissions Allowances, and Green Power Programs in State Renewables Portfolio Standards”, the New Berkeley Lab examined the legislation and regulatory rules from each of the 22 RPS policies in the US, with an emphasis on certain issues associated with RECs. Certificate tracking systems are useful for verification of compliance and substantiation of marketing claims, and to prevent fraud and double counting of certificates. In other words, it can increase the confidence in ‘green power’ and its sources.

The New Berkeley Lab found a wide variety of RECs definitions and rules in the different states. The rules are not always fully clear and sometimes even unintentionally ambiguous. According to the Lab, clarifying definitions would help to remove uncertainty in the market, which in turn would benefit the renewable energy industry and consumers.

The New Berkeley Lab has addressed two important policy issues associated with renewable energy attributes and RPS requirements. Firstly, it has examined the definition of which attributes must be included in renewable energy transactions, and the treatment of emissions allowances under RPS requirements.

Vague definitions have created uncertainty about whether emissions allowances (if available) must be included for RPS compliance, or whether emissions allowances may be sold separately. This question however is becoming more important as states are adopting emissions “cap and trade” systems. In addition, it would be beneficial if states were able to further standardise their treatment of emissions allowances in order to encourage less fragmentation in the RECs market.

Secondly, the New Berkeley Lab has addressed the interaction between voluntary green power sales and state RPS obligations. May renewable energy or RECs, sold trough voluntary customer-driven green power transactions, count towards state RPS obligations? Fourteen of the 22 RPS policies examined explicitly prohibit (sometimes with exceptions) voluntary green power sales from being used for RPS compliance purposes. Five states, however, have not explicitly addressed this question in RPS rules and legislation, while three states – Wisconsin, Texas and Arizona – allow or perhaps even require counting voluntary demand towards RPS compliance.

More information:

The report “The Treatment of Renewable Energy Certificates, Emissions Allowances, and Green Power Programs in State Renewables Portfolio Standards” in pdf

Key findings of the report