Several states have clean energy standards, which also allow for resources that do not produce emissions, such as large hydropower and nuclear power.
Unlike feed-in tariffs which guarantee purchase of all renewable energy regardless of cost, RPS programs tend to allow more price competition between different types of renewable energy, but can be limited in competition through eligibility and multipliers for RPS programs.
[4] Other factors in program design include resource eligibility, in-state requirements, new build requirements, technology favoritism, lobbying by industry associations and non-profits, groups cost caps, program coverage (IOUs versus Cooperatives and Municipal utilities), cost recovery by utilities, penalties for non-compliance, rules regarding REC creation and trading, and additional non-binding goals.
A market exists for RECs because energy supply companies are required to redeem certificates equal to their obligation under the RPS program.
State specific programs or various applications (e.g., WREGIS, M-RETS, NEPOOL GIS) are used to track REC issuance and ownership.
RPS multipliers adjust the amount of renewable energy credits (RECs) awarded (up or down) for each MWh of electricity produced based on its source.
[5] Since the definition of what is considered "renewable energy" varies, for example, nuclear power, and whether an RPS program should consider environmental damage of a renewable energy source (for example, hydroelectric dams, bird strikes of wind turbines, geothermal earthquakes, solar thermal water use) affects RPS program design and implementation.
Energy supply companies need to show that they have acquired a particular percentage of their power sales from the designated technology type.
In a 2011 report published by the Union of Concerned Scientists, Doug Koplow said: Nuclear power should not be eligible for inclusion in a renewable portfolio standard.
[6] In order to motivate compliance, states that have enforceable standards will have penalties for utilities that fail to reach the specified targets.
Where specific technologies are promoted through either tiers or set-aside provisions, the penalties for missing these targets are typically separate and higher.
The need for such measures arises from the difficulties in estimating in advance the actual cost of the RPS program.
RPS mechanisms have tended to be most successful in stimulating new renewable energy capacity in the United States where they have been used in combination with federal Production Tax Credits (PTC).
In periods, where PTC have been withdrawn the RPS alone has often proven to be insufficient stimulus to incentivise large volumes of capacity.
In 2007, the Edison Electric Institute, a trade association for America's investor-owned utilities, reiterated their continuing opposition to a nationwide RPS; among the reasons included were that it conflicts with and preempts existing RES programs passed in many states, it does not adequately consider the uneven distribution of renewable resources across the country, and it creates inequities among utility customers, by specifically exempting all rural electric cooperatives, and government-owned utilities from the RES mandate.
[10] The American Legislative Exchange Council (ALEC) drafted the model bill Electricity Freedom Act, which ALEC affiliate representatives are attempted to roll out in various states and which "would end requirements for states to derive a specific percentage of their electricity needs from renewable energy sources.
[47] According to the State of Michigan, as of March 4, 2013 "progress toward the first compliance year in 2012 and the 10 percent renewable energy standard in 2015 is going smoothly.
However, on June 8, 2001, Nevada Governor Kenny Guinn signed SB 372, at the time the country's most aggressive renewable portfolio standard.
[50] In July 2019, Ohio passed House Bill 6 in order to subsidize two failing nuclear power plants and eliminate their RPS altogether at 8.5% in 2026.
The Texas RPS mandated that utility companies jointly create 2000 new MWs of renewables by 2009 based on their market share.
The state's installed capacity reached the 10,000 MW target in early 2010, 15 years ahead of schedule.