The Effects of Renewable Portfolio Standards on Renewable Energy Sources

Abstract

Renewable Portfolio Standard (RPS) programs have experienced increased popularity at the state level with twenty-three states adopting policies. Policy makers implement these programs in the hopes of stimulating renewable energy generation and lessening the states reliance on nonrenewable sources, by requiring utility companies to provide a specified amount of electricity from renewable sources. I examine the use of renewable energy sources caused by the implementation of these programs, and determine how these renewable source markets interact in an RPS setting. Analysis performed on RPS programs indicates an increase in wind energy generation, suggesting that RPS programs are an effective method to increasing generation and reliance on wind energy. Results do not indicate that the renewable energy sources of wind, solar/photovoltaic, and geothermal, compete with one another to provide the lowest cost energy. This may be due to the infancy of the programs with economies of scale yet to be reached.Resource /Energy Economics and Policy,