A Renewable Portfolio Standard (RPS) is a directive that requires energy producers to generate a certain percentage of their electricity from renewable sources. These sources may include solar, wind, biomass, geothermal, and tidal. Each state individually determines its RPS that energy producers must follow.
The RPS applies directly to electricity generators, including utilities and competitive suppliers. In Massachusetts the RPS started at 1% in 2003 and increased by .5% a year until 2009 when it began increasing at 1% annually. Additionally in 2009, the RPS was broken into Class I and Class II.
Class I Requirements
The current RPS Class 1 requirement is 10% for 2015. Class I includes companies that began operation after 1997. They are allowed to generate electricity with any of these renewables sources:
• Solar Photovoltaic • Solar Thermal Electric • Wind Energy • Small Hydropower • Landfill Methane and Anaerobic Digester Gas • Marine or Hydrokinetic Energy • Geothermal Energy • Eligible Biomass Fuel
Class II Requirements
Differing from Class I, Class II includes companies that began operation during or before 1997. Class II accepts electricity created by any of the previous renewable sources, but adds waste energy to the list. Current requirements are 3.6% for renewable energy and 3.5% for waste energy.
Although the RPS does not directly apply to Massachusetts solar companies, it impacts us all. By allowing renewable energy to come from a variety of sources, lawmakers aimed to cultivate competition among utilities and competitive suppliers to provide the lowest electricity price. Since Massachusetts has a deregulated electricity market, consumers can choose where to buy electricity.
In order to reach their RPS goal, energy suppliers must install renewable energy such as solar farms, which is good news for Massachusetts solar companies. The solar farms provide clean, renewable energy to the utility and ultimately to the consumers. It urges utilities to rely on energy other than fossil fuels. Additionally, the growth of the renewable energy market, solar in particular, has led to the creation of thousands of jobs. Finally, installing this amount of solar provides experience for not only the Massachusetts solar companies, but also for manufacturers, installers, and everyone else associated with a complete solar project.
The RPS affects Massachusetts solar companies through Solar Renewable Energy Credits (SRECs). If a utility cannot create enough SRECs itself as part of the state RPS, then the utility can purchase additional SRECs from Massachusetts solar companies. This provides the utility companies with enough renewable energy to comply with the RPS and provides Massachusetts solar companies with revenue and experience.
More detailed information about the RPS is available on the Executive Office of Energy and Environmental Affairs’ website.
Eliza is the Chief Learning Officer for Clean Footprint. As the Chief Learning Officer, she is responsible for writing and editing blogs, e-books, videos and white papers as well as other learning content created for Clean Footprint’s developer partners and clients. Eliza attended New York University in Paris, France and studied Global Liberal Studies before moving to Florida and joining the Clean Footprint team. She also studied Business and Entrepreneurship at the University of Central Florida.