Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

Empirical evaluation of the stringency and design of renewable portfolio standards

An Author Correction to this article was published on 06 February 2019

This article has been updated

Abstract

In two decades of experience with state renewable portfolio standards (RPSs), the United States has observed immense growth in renewable energy markets, initially in wind energy and more recently in solar power. During this time, RPSs have experienced considerable policy reinvention and increased diversity. Here, we explain how changes in RPS policy design features relate to different market outcomes. We develop a score for measuring RPS stringency and show that a one-point increase in RPS stringency leads to increases of 0.2%, 1% and 0.3% in renewable energy, solar generation and renewable energy capacity, respectively. Other important design features include resource eligibility, planning processes, cost recovery and geographical restrictions. These findings are then reaffirmed through 42 semi-structured phone interviews with experts in the field of RPS implementation from government agencies, including public utility commissions and state energy offices, electric utilities and various renewable energy firms and associations.

Access options

Rent or Buy article

Get time limited or full article access on ReadCube.

from$8.99

All prices are NET prices.

Fig. 1
Fig. 2: Measure of stringency across RPS in US states from 1997 to 2014.
Fig. 3: Change in RPS stringency score from year of inception to 2014.
Fig. 4: Timeline of adoption and revision of RPS design features from 1997 to 2014.

Code availability

The code used to generate the statistical results in the present study, applicable to STATA 14, is available from the corresponding author upon request.

Data availability

The data that support the results within this paper and other findings of this study are available from the corresponding author upon reasonable request.

Change history

  • 06 February 2019

    In the version of this Article originally published, there was a data entry error in Table 1 for a single variable, eligibility of non-renewable resources in a renewable portfolio standard. This affected the descriptive statistics in Table 1 and Fig. 4 and the regression results and efficiency variable in Table 2. It also affects parts of the text, Table 3 and the Supplementary Information. These corrections have now been made.

References

  1. 1.

    Johnson, E. The cost of carbon dioxide abatement from state renewable portfolio standards. Resour. Energy Econ. 36, 332–350 (2014).

    Article  Google Scholar 

  2. 2.

    Barbose, G. et al. A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards. Energy Policy 96, 645–660 (2016).

    Article  Google Scholar 

  3. 3.

    Yi, H. Clean energy policies and electricity sector carbon emissions in the U.S. states. Util. Policy 34, 19–29 (2015).

    Article  Google Scholar 

  4. 4.

    Hollingsworth, A. & Rudik, I. External Impacts of Local Energy Policy: The Case of Renewable Portfolio Standards. Social Science Research Network Working Paper (SSRN, 2018); https://ssrn.com/abstract=2697222

  5. 5.

    Bowen, W. B., Park, S. & Elvery, J. A. Empirical estimates of the influence of renewable energy portfolio standards on the green economies of states. Econ. Dev. Q. 27, 338–351 (2013).

    Article  Google Scholar 

  6. 6.

    Yi, H. Clean energy policies and green jobs: an evaluation of green jobs in U.S. metropolitan areas. Energy Policy 56, 644–652 (2013).

    Article  Google Scholar 

  7. 7.

    Barbose, G., Bird, L., Heeter, J., Flores, F. & Wiser, R. Costs and benefits of renewables portfolio standards in the United States. Renew. Sustain. Energy Rev. 52, 523–533 (2015).

    Article  Google Scholar 

  8. 8.

    Yin, H. & Powers, N. Do state renewable portfolio standards promote in-state renewable generation? Energy Policy 38, 1140–1149 (2010).

    Article  Google Scholar 

  9. 9.

    Delmas, M. & Montes-Sancho, M. US state policies for renewable energy: Context and effectiveness. Energy Policy 39, 2273–2278 (2011).

    Article  Google Scholar 

  10. 10.

    Alagappan, L., Orans, R. & Woo, C. What drives renewable energy development? Energy Policy 39, 5099–104 (2011).

    Article  Google Scholar 

  11. 11.

    Dong, C. Feed-in tariff vs. renewable portfolio standard: An empirical test of their relative effectiveness in promoting wind capacity development. Energy Policy 42, 476–85 (2012).

    Article  Google Scholar 

  12. 12.

    Fischlein, M. & Smith, T. M. Revisiting renewable portfolio standard effectiveness: policy design and outcome specification matter. Policy Sci. 46, 277–310 (2013).

    Article  Google Scholar 

  13. 13.

    Carley, S., Baldwin, E., MacLean, L. M. & Brass, J. N. Global expansion of renewable energy generation: an analysis of policy instruments. Environ. Resour. Econ. 68, 397–440 (2017).

    Article  Google Scholar 

  14. 14.

    Howlett, M. & Lejano, R. Tales from the crypt: the rise and fall (and re-birth?) of policy design studies. Adm. Soc. 45, 356–380 (2013).

    Article  Google Scholar 

  15. 15.

    Linder, S. & Peters, B. G. The study of policy instruments. Policy Curr. 2, 4–7 (1992). 2, 1.

    Google Scholar 

  16. 16.

    Boborow, D. B. & Dryzek, J. S. Policy Analysis by Design (Univ. Pittsburgh Press, Pittsburgh, PA, 1987).

    Google Scholar 

  17. 17.

    Wiser, R., Barbose, G. & Holt, E. Supporting solar power in renewable portfolio standards: experience from the United States. Energy Policy 39, 3894–3905 (2011).

    Article  Google Scholar 

  18. 18.

    Shrimali, G., Chan, G., Jenner, S., Groba, F. & Indvik, J. Evaluating renewable portfolio standards for in-state renewable deployment: Accounting for Policy heterogeneity. Econ. Energy Environ. Policy 4, 1–16 (2015).

    Article  Google Scholar 

  19. 19.

    Carley, S., Nicholson-Crotty, S. & Miller, C. Adoption, reinvention, and amendment of renewable portfolio standards in the American states. J. Public Policy 37, 1–28 (2016).

    Google Scholar 

  20. 20.

    Nicholson-Crotty, S. & Carley, S. Effectiveness, implementation capacity, and policy diffusion: or, can we make that work for us? State Polit. Policy Q. 27, 78–97 (2015).

    Google Scholar 

  21. 21.

    Barbose, G. U.S. Renewables Portfolio Standards: 2016 Annual Status Report (Lawrence Berkeley National Laboratory, accessed 28 September 2016); https://emp.lbl.gov/sites/all/files/lbnl-1005057.pdf

  22. 22.

    Crago, C. L. & Chernyakhovskiy, I. Are policy incentives for solar power effective? Evidence from residential installations in the Northeast. J. Environ. Econ. Manag. 81, 132–151 (2017).

    Article  Google Scholar 

  23. 23.

    Davies, L. L. Making sense of the rapidly evolving legal landscape of solar energy support regimes. KLRI J. Law Legis. 6, 81–142 (2016).

    Google Scholar 

  24. 24.

    Sarzynski, A., Larrieu, J. & Shrimali, G. The impact of state financial incentives on market deployment of solar technology. Energy Policy 46, 550–557 (2012).

    Article  Google Scholar 

  25. 25.

    Buckman, G. The effectiveness of renewable portfolio standard banding and carve-outs in supporting high-cost types of renewable electricity. Energy Policy 39, 4105–4114 (2011).

    Article  Google Scholar 

  26. 26.

    Li, H. & Yi, H. Multilevel governance and deployment of solar PV panels in U.S. cities. Energy Policy 69, 19–27 (2014).

    Article  Google Scholar 

  27. 27.

    Heeter, J. & Bird, L. Including alternative resources in state renewable portfolio standards: current design and implementation experience. Energy Policy 61, 1388–1399 (2013).

    Article  Google Scholar 

  28. 28.

    Thoyre, A. Energy efficiency as a resource in state portfolio standards: lessons for more expansive policies. Energy Policy 86, 625–634 (2015).

    Article  Google Scholar 

  29. 29.

    Lee, D. K. & Duane, T. P. Putting the dormant commerce clause back to sleep: adapting the doctrine to support state renewable portfolio standards. Environ. Law 43, 295–364 (2013).

    Google Scholar 

  30. 30.

    Hitaj, C. Wind power development in the United States. J. Environ. Econ. Manag. 65, 394–410 (2012).

    Article  Google Scholar 

  31. 31.

    Berry, T. & Jaccard, M. The renewable portfolio standard: design considerations and an implementation survey. Energy Policy 29, 263–277 (2001).

    Article  Google Scholar 

  32. 32.

    Cory, K. S. & Swezey, B. G. Renewable portfolio standards in the states: balancing goals and rules. Electr. J. 20, 21–32 (2007).

    Article  Google Scholar 

  33. 33.

    Davies, L. L. Evaluating RPS policy design: metrics, gaps, best practices, and paths to innovation. KLRI J. Law Legis. 4, 3–75 (2015).

    Google Scholar 

  34. 34.

    Electricity Price by State and End-User, 1992–2014 (US Energy Information Administration, accessed 20 August 2016); http://www.eia.gov/electricity/data.cfm#electriccosts

  35. 35.

    Zirogiannis, N. & Tripodis, Y. Dynamic factor analysis for short panels: estimating performance trajectories for water utilities. Stat. Methods Appl. 27, 131–150 (2018).

    MathSciNet  MATH  Article  Google Scholar 

  36. 36.

    State Energy Data System, 1960–2014 (Complete) (US Energy Information Administration, accessed 25 August 2016); http://www.eia.gov/electricity/data/state/

  37. 37.

    Natural Gas Prices, 1992–2014 (US Energy Information Administration, accessed 25 August 2016); https://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm

  38. 38.

    Population and Housing Unit Estimates (US Census Bureau, accessed 23 August 2016); https://www.census.gov/programs-surveys/popest/data/tables.html

  39. 39.

    Regional Data: Annual Gross Domestic Product (GSP) by State (Bureau of Economic Analysis, accessed 23 August 2016); https://www.bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=4&isuri=1&7003=200&7001=1200&7002=1&7090=70

  40. 40.

    Berry, W. D., Fording, R. C., Ringquist, E. J., Hanson, R. L. & Klarner, C. E. Measuring citizen and government ideology in the U.S. states: a re-appraisal. State Polit. Policy Q. 10, 117–135 (2010).

    Article  Google Scholar 

Download references

Acknowledgements

We acknowledge research assistance provided by J. Amadon, D. Baldwin, C. Davis, V. Luman, M. McKay, N. Mitchell, D. Olson, J. Williams, M. Williams and R. Woolston. Library research support was provided by S. Darais, R. McPhail and F. Murphy.

Author information

Affiliations

Authors

Contributions

S.C. and L.L.D. conceived of the research question and gathered all quantitative data, along with research assistants. L.L.D., along with assistance, conducted the interviews. S.C. and N.Z. conducted the quantitative analyses. S.C., L.L.D., D.B.S. and N.Z. wrote the article.

Corresponding author

Correspondence to Sanya Carley.

Ethics declarations

Competing interests

The authors declare no competing interests.

Ethics statement

This research involved human subjects. It was approved with exempt status by the University of Utah, under protocol number 00063847. In accordance with this protocol, informed consent was provided by all study participants

Additional information

Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Supplementary Information

Supplementary Notes 1–2, Supplementary Tables 1–10, Supplementary References

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Carley, S., Davies, L.L., Spence, D.B. et al. Empirical evaluation of the stringency and design of renewable portfolio standards. Nat Energy 3, 754–763 (2018). https://doi.org/10.1038/s41560-018-0202-4

Download citation

Further reading

Search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing