Tag Archives: renewable portfolio standard

Will California’s AB327 help or hinder renewable energy? The devil is in the details

November 18, 2013 |


California Assembly Bill 327 (AB327), signed into law October 7th, 2013, drew fire from solar and energy efficiency proponents, The Sierra Club, and other environmental groups over the rate-setting powers it would give the California Public Utilities Commission (CPUC). These opponents worry that the bill allows changes in rate and regulatory structure that could discourage renewable energy investment in California. However, local governments, industry groups, utilities and some consumer groups argue these same powers could, used wisely, make electricity rates more equitable, protect consumers and help utilities adapt to an increasingly renewable and distributed grid. Climate Policy Initiative’s analysis suggests they could also create a very fertile and cost-effective environment for renewable energy for years to come.

AB327 allows the extension of the Renewable Portfolio Standard (RPS) and requires the extension of the Net Energy Metering program, both of which Climate Policy Initiative analysis has shown to be significant drivers of renewable energy growth in California. Many of the details of their implementation are left to the CPUC, though, and these details will decide the ultimate impact of AB327 on renewable energy in California.

Read More

What’s working and what’s not in state renewable portfolio standards

July 11, 2013 |


Combined renewable portfolio standards in the United StatesRenewable portfolio standards (RPS) are an important part of the U.S. renewable energy policy landscape.Twenty-nine states, from California to North Carolina, have enacted these policies to require utilities to provide at least some of their power from renewable sources. This year, at least fourteen of these states considered bills that would have watered down or repealed these policies. But these rollbacks proved to be unpopular, and on balance state legislatures have made RPS policies more ambitious in 2013.

Taken together, RPS policies will require nearly 10% of electricity sold in the U.S. to come from renewable sources by 2020. And with the help of federal tax credits, grants and loan guarantees, most RPS policies appear to have had limited impacts on electricity rates so far. But every state’s RPS is different, and the diversity of policy designs is a great opportunity to learn what is working well and what can be improved in these policies.

Read More

Renewable portfolio standards – the high cost of insuring against high costs

December 17, 2012 |


State-level renewable portfolio standards (RPS) are a critical part of the U.S. renewable energy policy landscape. 29 states and Washington DC have enacted mandatory RPS policies. Taken together, they require that nearly 10% of U.S. electricity comes from RPS-eligible renewable energy sources by 2020.

But state policy makers have expressed concern about the potential cost of these policies. Over 20 states have included some form of cost limit in their policy. These cost limits are intended to protect electricity consumers from unacceptably high costs, and mitigating this risk can help increase political and public support for the policy. But depending on how they are designed and implemented, these cost limits can have unintended effects: They can increase the cost of deploying renewable energy, make RPS policies more complicated and less certain, and sometimes do not even limit costs as intended.

States have taken a wide range of approaches to limiting costs. Common approaches include:

  • Alternative compliance payments – ACPs let electricity suppliers meet their renewable energy requirements by making a payments rather than purchasing renewable energy credits or contracting with renewable energy projects. These payments are often used to fund complementary clean energy or energy efficiency programs. The ACP level is usually set by a regulator, and in practice, creates a maximum price for renewable energy credits.
  • Rate impact caps – Some states put a limit on how much renewable energy policy can increase electricity rates. These mechanisms vary significantly from state to state in terms of which renewable energy costs are included, how they are calculated, and the time period that they apply to.
  • Per-customer cost caps – A handful of states place a limit on the dollar amount any particular customer’s bill can increase because of the RPS.
  • Contract price caps – A couple of states have applied limits on the price that a renewable energy generator can contract to sell power to a utility.
  • Funding limits – Several states have created limits to the amount of funding that can be used to cover the costs of renewable energy.

Read More

Renewable energy in California: What has policy brought us?

September 21, 2012 |


Government support for renewable energy is a subject of national debate. In particular, many are scrutinizing the Federal Production Tax Credit for wind energy – absent legislative action, it expires in December.

Policymakers across the political spectrum are asking questions like “has government support of renewable projects been effective?” and “should government support be continued or scrapped?” Investors in renewable energy are similarly interested in how policies can best provide stable support to help the industry mature.

With those questions in mind, our team looked back at what state and federal renewable energy policies have meant for California’s renewable energy deployment up to now.

A brief history of California renewable energy policies

As this graphic shows, renewable energy deployment in California has been concentrated in two waves. The first, in the 1980s, was due to a combination of the Public Utilities Regulatory Policies Act (PURPA), high natural gas prices, and new technologies. The second, which started around 2001, coincided with California’s renewable portfolio standard as well as state and federal incentives.

Read More