Recent Developments to Renewable Portfolio Standards

Recent Developments to Renewable Portfolio Standards
National Renewable Portfolio Standards (RPS) and how individual states have continued their push towards greater renewable generation.

Although the federal government has yet to enact a sweeping renewable portfolio standard (RPS), individual states have continued their push towards greater renewable generation.  Sixteen states currently have a RPS in place with solar and/or distributed generation provisions. Today RPSs range from 10% by 2015 in North Dakota to 33% by 2020 in California to 15% by 2020 in Massachusetts.  Seeking to lead by example, Hawaii and Vermont have recently upped the ante with considerable increases to their respective RPSs.

Already the nation’s leader in solar penetration, this month the Hawaii state legislature voted to achieve 100% electricity generation from renewables by 2045.  The bill set intermediary goals of 40% by 2030 and 70% by 2040.  The state currently gets about 22% of its electricity from renewables.  Although residential solar gains in the state have been strong (roughly 12% of homes in Hawaii already have grid-tied solar and average system size is on the rise), renewable sources must displace large amounts of oil-fired generators which currently constitute 80% of the state's electricity generation. 

If Governor David Ige approves the bill Hawaii will face the task of quickly ramping up renewable installations.  While a jump to 100% renewables will pose challenges, the effort is bolstered by the cost of fossil-generated electricity on the island.  Roughly 80% of the state’s 2,400 MW of installed capacity relies upon imported oil.  These imports have driven the cost of electricity up to 175% above the national average.  Having already achieved grid parity, solar systems on the islands pay off quicker, opening up the opportunity for more Hawaii homeowners to contribute to the 100% goal.

Although slightly less ambitious in magnitude, this week Vermont senators approved a preliminary bill that would require 55% of utility sales to come from renewable sources beginning January 1, 2017.  Dubbed the Renewable Energy Standard and Energy Transformation (RESET) the bill calls for an additional 4% gain every three years until leveling off at 75% in 2032.  Going beyond transitioning to cleaner sources of energy, RESET also seeks to promote distributed generation so as to “support the reliability of the state’s electric system; reduce line losses; contribute to avoiding or deferring improvements to that system necessitated by transmission or distribution constraints; and diversify the size and type of resources connected to that system."

Both states will serve as examples as to how quickly renewables can be deployed and how distributed generation will benefit the grid.

4 years 6 months ago
Written by
Conor Walsh
Support topic
Finance and Regulation
Support keywords
Renewable Portfolio Standard