Renewable Portfolio Standards (RPS)

About

A Renewable Portfolio Standard (RPS) is a regulatory policy that mandates utilities to generate or procure a specific percentage of their electricity from renewable energy sources. These sources include wind, solar, biomass, geothermal, and hydropower. RPS policies are designed to increase renewable energy production, reduce reliance on fossil fuels, and promote environmental sustainability. By setting mandatory targets, RPS encourages utilities to diversify their energy portfolios and invest in renewable energy projects. RPS policies often include mechanisms like Renewable Energy Certificates (RECs), which allow utilities to trade excess renewable energy credits. This flexibility helps utilities meet their targets while reducing compliance costs. Penalties for non-compliance incentivize utilities to adhere to RPS requirements. Overall, RPS policies foster a stable market for renewable energy, encouraging investment and innovation in the sector. They also contribute to environmental goals by reducing greenhouse gas emissions and promoting sustainable practices.