Do Renewable Portfolio Standards Work?

The Biden administration has pledged to achieve a 50-52% reduction from 2005 levels in nationwide greenhouse gas (GHG) emissions by 2030. As part of this goal, the administration has stated that they would like to see 100% of the nation’s electricity come from renewable sources by 2035 – up from roughly 20% right now.

The signature policy support mechanism for renewable energy in the U.S. has been state-wide renewable energy portfolio standards, hereby called RPS. The goal of an RPS is to increase the use of renewable energy in electricity generation by requiring electricity suppliers to provide consumers with a minimum share of electricity from eligible renewable resources (e.g. 20% of electricity generated needs to come from renewable sources).

The two states that generate the most renewable energy in the U.S. – Texas and California – have made an RPS a central part of their renewable energy policy strategy. However, the two states differ quite substantially in their implementation philosophies and supporting policies.

California has a much more hands on approach with increasingly ambitious RPS targets over the years with a plethora of diverse, and targeted statewide policies for specific renewables, while Texas has a more hands-off approach, setting a low renewable target and providing comparatively fewer state-wide incentives and regulations.

This paper seeks to explore the differences between Texas and California and assess changes in each state’s overall CO₂ emissions from the electricity sector and generation of renewable energy since their RPS went into effect. The paper concludes with lessons learned and recommendations for how RPS policies can be improved nationally to ultimately achieve Biden’s goal of a carbon-free electricity system.

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