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Costs and benefits of renewables portfolio standards in the United States


  • Barbose, Galen
  • Bird, Lori
  • Heeter, Jenny
  • Flores-Espino, Francisco
  • Wiser, Ryan


Most state renewables portfolio standard (RPS) policies in the United States have five or more years of implementation experience. Understanding the costs and benefits of these policies is essential for RPS administrators tasked with implementation and for policymakers evaluating changes to existing or development of new RPS policies. This study estimates and summarizes historical RPS costs and benefits, and provides a critical examination of cost and benefit estimation methods used by utilities and regulators. We find that RPS compliance costs constituted less than 2% of average retail rates in most U.S. states over the 2010–2013 period, although substantial variation exists, both from year-to-year and across states. Compared to RPS costs, relatively few states have undertaken detailed estimates of broader societal benefits of RPS programs, and then only for a subset of potential impacts, typically some combination of avoided emissions and human health benefits, economic development impacts, and wholesale electricity market price reductions. Although direct comparison to RPS cost estimates is not possible, the available studies of broader RPS benefits suggest that in many cases these impacts may at least be of the same order of magnitude as costs, highlighting a need for more refined analysis.

Suggested Citation

  • Barbose, Galen & Bird, Lori & Heeter, Jenny & Flores-Espino, Francisco & Wiser, Ryan, 2015. "Costs and benefits of renewables portfolio standards in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 523-533.
  • Handle: RePEc:eee:rensus:v:52:y:2015:i:c:p:523-533
    DOI: 10.1016/j.rser.2015.07.175

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    References listed on IDEAS

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    Cited by:

    1. Choi, Gobong & Huh, Sung-Yoon & Heo, Eunnyeong & Lee, Chul-Yong, 2018. "Prices versus quantities: Comparing economic efficiency of feed-in tariff and renewable portfolio standard in promoting renewable electricity generation," Energy Policy, Elsevier, vol. 113(C), pages 239-248.
    2. Rountree, Valerie, 2019. "Nevada's experience with the Renewable Portfolio Standard," Energy Policy, Elsevier, vol. 129(C), pages 279-291.
    3. Sahoo, Kamalakanta & Bilek, Edward & Bergman, Richard & Mani, Sudhagar, 2019. "Techno-economic analysis of producing solid biofuels and biochar from forest residues using portable systems," Applied Energy, Elsevier, vol. 235(C), pages 578-590.
    4. Yushchenko, Alisa & Patel, Martin Kumar, 2017. "Cost-effectiveness of energy efficiency programs: How to better understand and improve from multiple stakeholder perspectives?," Energy Policy, Elsevier, vol. 108(C), pages 538-550.
    5. Zohrabian, Angineh & Sanders, Kelly T., 2018. "Assessing the impact of drought on the emissions- and water-intensity of California's transitioning power sector," Energy Policy, Elsevier, vol. 123(C), pages 461-470.
    6. Kim, Jung Eun & Tang, Tian, 2020. "Preventing early lock-in with technology-specific policy designs: The Renewable Portfolio Standards and diversity in renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    7. Upton, Gregory B. & Snyder, Brian F., 2017. "Funding renewable energy: An analysis of renewable portfolio standards," Energy Economics, Elsevier, vol. 66(C), pages 205-216.
    8. Li, Jinke & Liu, Guy & Shao, Jing, 2020. "Understanding the ROC transfer payment in the renewable obligation with the recycling mechanism in the United Kingdom," Energy Economics, Elsevier, vol. 87(C).
    9. Wang, Ge & Zhang, Qi & Li, Yan & Mclellan, Benjamin C., 2019. "Efficient and equitable allocation of renewable portfolio standards targets among China's provinces," Energy Policy, Elsevier, vol. 125(C), pages 170-180.
    10. Xin-gang, Zhao & Ling-zhi, Ren & Yu-zhuo, Zhang & Guan, Wan, 2018. "Evolutionary game analysis on the behavior strategies of power producers in renewable portfolio standard," Energy, Elsevier, vol. 162(C), pages 505-516.
    11. Barbose, Galen & Wiser, Ryan & Heeter, Jenny & Mai, Trieu & Bird, Lori & Bolinger, Mark & Carpenter, Alberta & Heath, Garvin & Keyser, David & Macknick, Jordan & Mills, Andrew & Millstein, Dev, 2016. "A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards," Energy Policy, Elsevier, vol. 96(C), pages 645-660.
    12. Rouhani, Omid M. & Niemeier, Debbie & Gao, H. Oliver & Bel, Germà, 2016. "Cost-benefit analysis of various California renewable portfolio standard targets: Is a 33% RPS optimal?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1122-1132.
    13. Wang, Ge & Zhang, Qi & Li, Yan & Mclellan, Benjamin C. & Pan, Xunzhang, 2019. "Corrective regulations on renewable energy certificates trading: Pursuing an equity-efficiency trade-off," Energy Economics, Elsevier, vol. 80(C), pages 970-982.
    14. Wang, Qin & Wu, Hongyu & Florita, Anthony R. & Brancucci Martinez-Anido, Carlo & Hodge, Bri-Mathias, 2016. "The value of improved wind power forecasting: Grid flexibility quantification, ramp capability analysis, and impacts of electricity market operation timescales," Applied Energy, Elsevier, vol. 184(C), pages 696-713.
    15. Zhou, Shan & Solomon, Barry D., 2020. "Do renewable portfolio standards in the United States stunt renewable electricity development beyond mandatory targets?," Energy Policy, Elsevier, vol. 140(C).
    16. Tsai, Chen-Hao & Figueroa-Acevedo, Armando & Boese, Maire & Li, Yifan & Mohan, Nihal & Okullo, James & Heath, Brandon & Bakke, Jordan, 2020. "Challenges of planning for high renewable futures: Experience in the U.S. midcontinent electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    17. Herath, N. & Tyner, W.E., 2019. "Intended and unintended consequences of US renewable energy policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).


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