Ninety percent of states with renewable portfolio standards are currently hitting their targets or are missing them by a small margin, although the policies are less influential in driving new projects than they were two decades ago, according to a new analysis from Lawrence Berkeley National Laboratory.
The report examines the current status and effects of RPS programs, which have been adopted by 29 states and Washington, D.C., and mandate that electric utilities reach a specific level of renewables over a set period. The report found that the demand for low-carbon power driven by RPSs and clean electricity standards, or CESs, will more than triple by midcentury.
“RPS policies have been one of the foundational, bedrock policies within the U.S renewable energy sphere for the better part of the last two decades and have been critical to driving growth and to providing some level of certainty that the industry can develop around,” Galen Barbose, the report’s author and assistant leader of the lab’s Energy Markets & Policy department, said in an interview.
Most state RPS programs currently target a 15 to 30 percent share of renewable electricity, although the standards range from single-digit percentage points to Vermont’s 60 percent. Four states have committed to reaching 100 percent renewables by a specific date, and many states are weighing strengthening existing standards.
Between 2021 and 2023, Barbose said that 11 states achieved their RPS goals, while 15 states and D.C. faced “minor shortfalls” where they missed state targets by 0.01 to 12 percent. Those shortfalls often stem from administrative complexities, such as issues with new or failing retail electricity suppliers, he said.
Three states — New York, Illinois and Delaware — are experiencing a “large shortfall,” the report said.
The New York and Illinois deficits are expected to shrink when projects in the works eventually get connected to the grid, it said. The report attributes Delaware’s gap to the state’s negligible penalties against providers that fail to meet the RPS.
The report also found that “almost half of all growth in U.S. renewable electricity generation and capacity since 2000 is nominally associated with state RPS requirements.” However, the percentage of growth associated with RPSs declined to 35 percent last year.
David Pomerantz, executive director of the think tank Energy and Policy Institute, said the main takeaway of the report is that RPSs “continue to be market drivers.”
Previous research has found that RPS programs make a significant difference in reducing emissions. A 2019 paper by University of Chicago economists calculated that carbon emissions are 11 to 24 percent lower in a state seven years after it passes an RPS.
But the policies can raise electricity prices, according to Michael Greenstone, the paper’s co-author and a professor of economics at the University of Chicago.
“According to our estimates, about seven years after the implementation, there are about 11 percent higher electricity prices. And on a cost-per-ton basis, 1 ton of CO2 is somewhere between 80 and 200 bucks” under an RPS, Greenstone said.
He said the policies are more cost-effective than many state climate programs — though their cost is at least twice as much as California’s cap-and-trade policy.