The United States still plans to formulate a comprehensive policy to govern renewable energy production and utilization. However, the US governments enacted a task-force for federal programs and state incentives to spearhead the adoption of renewable power in the country’s power industry. Recently, state governments in Washington DC and 29 other states endorsed a binding agreement dubbed the Renewable Portfolio Standards, commonly known as RPS. Eight additional states still run programs and renewable goals, but the projects are as stipulated on non-binding RPS agreements. Every state program that adheres to the standards specified in RPS operates by outlining the annual targets for renewable energy. The target requires electricity production and utility corporations to strive towards achieving the levels set for renewable power.
Consequently, RPS programs become the vital drivers of investment in the United States’ renewable energy. The projects draw significant funding in development stages to enhance the establishment of appropriate infrastructure for renewable energy. The programs receive support from different initiatives for attaining a zero-emission economy. Ideally, all the RPS programs work to increase the market demand for renewable energy, such as wind power, alongside spearheading the capacity-building stages for hydro-kinetic power and solar energy.
Approximately 16 states adopted small, independent development targets for their solar energy, commonly known as the solar carve-out. These separate targets function consequentially with either a feed-in-tariff plan or an overall metering system. For years, the solar carve-out targets received little support for expansion because solar energy’s high prices are competitive. The advancements in solar power attracted numerous investors, crippling the initiatives that drive separate targets. Usually, a system developed for commercial Renewable Energy Credits manages the compliance for RPS programs. Each REC unit represents a megawatt-hour (MWh) of power from renewable energy sources. State agencies register the credits as tradable instruments, offering a gaging system for commercialization and large-scale renewable energy production.
Many state-owned programs go through certification procedures to determine the RPS compliance when using the RECs and electricity generated from renewable sources in the states. However, notable exceptions and limited eligibility for renewable energy resources vary depending on the country. The formulations fragment the market demand for REC, resulting in variations in credit prices influenced by the type of resource and the state. Moreover, the compulsory RPS programs and green power projects enable energy consumers in the United States to purchase power units from either utility companies or private power suppliers.
In conclusion, energy suppliers buy RECs offered on a voluntary consumer market to satisfy green power demand. Even though solar continues to increase its shares of REC supply, the wind still dominates the space. The prices for the voluntary RECs begin at $1 per megawatt-hour, cheaper than compliance RECs.