Improved technologies, tax credits, Renewable Portfolio Standards (RPS), and Renewable Energy Certificates/Credits (RECs) have all helped to increase and encourage the use of renewable energy sources over the years. In 2013, according to the EIA, 13% of electricity produced in the United States was generated by renewable energy sources. Hydropower, wind, solar, geothermal, and biomass are among the renewable sources that contribute to electricity generation in different degrees.
Hydropower was the largest provider of U.S. renewable energy in 2013 and generated 52% of all renewable energy. However, non-hydropower renewable sources are also on the rise and have nearly quadrupled generation output since 1990. As of 2013, wind generated 32% of all renewable energy in the U.S. The US Energy Information Administration projects that wind power capacity will increase by 7.3% in 2014 and 14% in 2015. The EIA also expects that utility-scale solar generation will continue its tremendous growth trajectory and increase by 57% between 2013 and 2015.
There are a number of factors that contribute to the success and growth of renewable energy, one such factor is Renewable Portfolio Standards (RPS). Renewable Portfolio Standards are policies designed and established at the state level to increase electricity generation from renewable resources. These policies require or encourage electricity providers to generate or acquire a certain portion of their power supplies from renewable sources such as hydropower, wind, solar, geothermal, and biomass. Each state is responsible for creating and enforcing Renewable Portfolio Standards, if they choose. Most states have Renewable Portfolio Standards, or at least goals, in place. To see each state’s specific renewable energy targets, click here.
Another policy created that encourages growth of renewable energy resources are Renewable Energy Certificates/Credits. Renewable Energy Certificates/Credits (RECs) are tradable, non-tangible energy commodities in the United States that represent proof that 1 MWh of electricity was generated from an eligible renewable energy sources. REC trading systems, a common feature of many state policies, are structured to help renewable energy producers minimize the costs of compliance with a state’s Renewable Energy Portfolio and fund development. A renewable energy producer who generates more renewable energy than required to meet its own RPS obligation may trade or sell RECs. These certificates are sold or traded and represent the environmental attributes of the power produced from renewable energy projects and are sold separately from commodity electricity. RECs help renewable energy facilities grow by making them more financially viable, therefore incentivizing development. The owner/consumer of a REC receives a certificate that proves they purchased renewable energy. More and more companies are purchasing RECs in order to show their commitment to reducing their environmental footprint.
Renewable energy resources have certainly come a long way in the past few years, however, the positive impacts and benefits of renewable energy seem to grow faster than our ability to fully utilize the available resources. As technologies advance, additional policies are developed, and tax credits evolve, we will see how the future of renewable energy is impacted.