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Do Mandatory U.S. State Renewable Portfolio Standards Increase Electricity Prices?

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  • Hongbo Wang

Abstract

Renewable Portfolio Standards (RPS) are U.S. state mandates that utilities produce some of their electricity using renewable energy sources in an effort to reduce greenhouse gas emissions. While advocates highlight the potential long-term benefits of RPS, critics argue that RPS will increase electricity prices due to the higher costs of renewable energy generation. However, to date, there are no published empirical studies of the effect of RPS on electricity prices. Using state-level panel data from 1990 to 2011 and the difference-in-differences (DID) method, I find that implementation increases electricity prices when the RPS policy first becomes binding.
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  • Hongbo Wang, 2016. "Do Mandatory U.S. State Renewable Portfolio Standards Increase Electricity Prices?," Growth and Change, Wiley Blackwell, vol. 47(2), pages 157-174, June.
    • Handle: RePEc:bla:growch:v:47:y:2016:i:2:p:157-174
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    Cited by:

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    2. Lee, Sang Ho & Choi, Daewoung Joey & Han, Seung Hun, 2023. "Corporate cash holdings in response to climate risk and policies," Finance Research Letters, Elsevier, vol. 55(PA).
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    4. Mai, Trieu & Cole, Wesley & Gates, Nathaniel & Greer, Daniel, 2021. "The prospective impacts of 2019 state energy policies on the U.S. electricity system," Energy Policy, Elsevier, vol. 149(C).
    5. Ann Wolverton & Ronald Shadbegian & Wayne B. Gray, 2022. "The U.S. Manufacturing Sector’s Response to Higher Electricity Prices: Evidence from State-Level Renewable Portfolio Standards," NBER Working Papers 30502, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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