Government
In general, electricity from renewable resources is more expensive than electricity from conventional resources, with the exception of hydroelectricity. In competitive markets, cost often trumps environmental impact, leaving renewable energy at the sidelines. In order to diversify energy sources, state and federal governments in the US and abroad create provisions to support the development of new energy sources, from new oil wells and more efficient systems to renewables.
Federal, state and regional incentives for alternative/renewable energy include: |
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Federal Interventions & Subsidies
The data graphed to the right was compiled by the Energy Information Administration, a statistical agency of the U.S. Department of Energy. In 1992 Congress requested a one-time study of Federal energy subsidies. In 1999, the Acting Director of the Office of Policy from the Department of Energy requested a follow up analysis. In 1999, $1,071 billion dollars went toward renewables, and $2,169 Billion went toward fossil fuels (Oil, Gas & Coal).
Current federal incentives include:
- Corporate Depreciation
- Corporate Exemption
- Corporate Tax Credit
- Federal Grant Program
- Federal Loan Program
- Personal Exemption
- Production Incentive
- Green Power Purchasing/Aggregation
State Mandated Renewable Portfolio Standards
| States with Renewable Portfolio Standards | ||
| Renewable Standard | Target Date | State |
| 30% | 2000 | Maine |
| 24% | 2013 | New York |
| 20% | 2020 | Hawaii |
| 20% | 2017 | California |
| 18%1 | 2020 | Pennsylvania* |
| 15% | 2020 | Rhode Island |
| 15% | 2015 | Montana |
| 15% | 2013 | Nevada* |
| 11% | 2022 | Washington DC* |
| 10% | 2010 | Connecticut |
| 10% | 2011 | New Mexico* |
| 10% | 2015 | Colorado* |
| 7.5% | 2019 | Maryland* |
| 6.5% | 2008 | New Jersey* |
| 4% | 2009 | Massachusetts + 1% annual increases |
| 2.2% | 2011 | Wisconsin |
| 1.1% | 2007 | Arizona* |
| 2,880 MW | 2009 | Texas |
| 1,125 MW wind | 2010 | Minnesota |
| 105 MW | -- | Iowa |
*Minimum requirement and/or increased credit for solar | ||
A renewable portfolio standard (RPS) is a market-based strategy to ensure that renewable energy constitutes a certain percentage of total energy generation or consumption. An RPS could require electricity generators or sellers to cover a percentage of their electricity generation or sales, respectively, with generation from renewable technologies. It guarantees that a minimum percentage of generation comes from renewable sources. Under the Administration's proposal, the initial RPS requirement, based on electricity sales, would be set close to the existing ratio of renewable generation to total retail electricity sales, with an intermediate increase in 2005, followed by an increase to 5.5 percent in 2010. (In 1997, nonhydroelectric renewable generation represented 2 percent of total generation.) Retail sellers could meet the RPS requirement either by generating sufficient renewable electricity to meet the ratio, or by purchasing tradeable renewable electricity credits that would be created and tracked. The
RPS employ market prices through credit trading and spread the cost of supporting renewable generation more evenly across the retail electricity market than a "Must Buy" policy would. A RPS can be subject to a price cap.
Source: Challenges of Electric Power Industry Restructuring for Fuel Suppliers
State Mandated Net Metering
Net metering allows electricity customers to generate some of their own power and to sell excess power back to the utility. For example, a person with solar cells may not be at home in the middle of the day when the cells are producing the most energy. With net metering, that energy goes into the electrical grid, the homeowner is credited (or paid) for the energy, and the utility has a slighly lighter load during peak hours.
In Georgia state mandated net metering requires utilities to pay the consumer the "avoided cost," or the amount the utility would have spent on generating that amount of electricity. Savannah Electric, however, will purchase solar power for $0.15 per Kilowatthour. For the higher rate, the solar system must feed directly into the grid, which allows Savannah Electric to use all of the solar energy generated, even when the consumer is at home using electricity.
Net metering is currenlty offered in more than 25 states.
Source: The Green Power Network
State Mandated Disclosure Policies
A number of states have adopted environmental disclosure policies, requiring electricity suppliers to provide information on fuel sources and, in some cases, emissions associated with electricity generation. Although most of these policies have been adopted in states with retail competition, a handful of states with no plans to implement restructuring have required environmental disclosure.
Source: The Green Power Network
