State and Local Climate and Energy Program
- Benefits of Renewable Energy
- Barriers to Renewable Energy
- State Policies to Support Renewable Energy
- EPA Programs that Support Renewable Energy
- Tools and Resources
Renewable energy is electricity generated by fuel sources that restore themselves over a short period of time and do not diminish. Although some renewable energy technologies have an impact on the environment, renewables are considered environmentally preferable to conventional sources and, when replacing fossil fuels, have significant potential to reduce greenhouse gas emissions.
While states identify renewable technologies differently for the purposes of meeting state targets and goals, most include at a minimum:
- Solar (photovoltaic, solar thermal)
(e.g., landfill gas/wastewater treatment digester gas)
- Low-impact hydroelectricity
Options for using renewable energy include:
- Generating renewable energy on–site using a system or device at the location where the power is used (e.g., PV panels on a state building, geothermal heat pumps, biomass-fueled combined heat and power).
- Purchasing green power through renewable energy certificates (RECs) – also known as green tags, green energy certificates, or tradable renewable certificates – that represent the technology and environmental attributes of electricity generated from renewable resources.
- Purchasing renewable energy from an electric utility through a green pricing or green marketing program, where buyers pay a small premium in exchange for electricity generated locally from green power resources.
Benefits of Renewable Energy
Environmental and economic benefits of adding renewable energy to a state portfolio can include:
- Generating energy that produces no greenhouse gas emissions from fossil fuels and reduces some types of air pollution
- Diversifying energy supply and reducing dependence on imported fuels
- Creating economic development and jobs in manufacturing, installation, and more
Barriers to Renewable Energy
Price competitiveness is the most obvious barrier to renewable energy installations. In many cases, barriers to expanding renewable energy are regulatory and therefore within state control. Some examples include:
Utility Rate Structures. Unfavorable utility rate structures have perennially been a barrier to increased deployment of renewable energy technologies. Unless carefully monitored to encourage the development of distributed generation, rate structures can increase the cost of renewables (e.g., through stand-by rates, lack of net metering) or completely disallow connection to the electrical grid.
Lack of Interconnection Standards. The absence of standard interconnection rules, or uniform procedures and technical requirements for connecting renewable energy systems to the electric utility's grid, can make it difficult, if not impossible, for renewable systems to connect to the electric utility's grid.
Barriers in Environmental Permitting. Large–scale renewable energy technologies are subject to all the necessary environmental permits of major industrial facilities. Renewable energy generation using new technologies can face permitting hurdles until permitting officials are familiar with the environmental effects of the generation processes.
Lack of Transmission. Many renewable resources are located in remote areas that lack ready or cost–effective access to transmission. States that have not established clear utility regulations that enable investments in transmission to be reimbursable (i.e., cost recovery), nor coordinated planning and permitting processes, slow the development of utility–scale renewable projects in their territory.
State Policies to Support Renewable Energy
The number of renewable energy installations across states varies widely, reflecting individual state or regional priorities, and not always due to resource or technical potential. For example, eight states in the southwest and northeast (AZ, CA, CT, CO, MA, MD, NJ, NM) represent 99.5 percent of all solar PV installations, whereas nationally, the greatest potential for PV-generated electricity is within nine southwestern and western states (AZ, CA, CO, HI, NM, NV, TX, UT, WY).
States have adopted a number of policies to support greater investment in and adoption of renewable energy technologies.
- Renewable Portfolio Standards (RPS) require electric utilities and other retail electric providers to provide a specified percentage or amount of customer electricity with eligible renewable resources. EPA has held multiple State Climate and Energy Webcasts on RPS. Policy details are available from EPA's Energy and Environment Guide to Action Chapter 5: Renewable Portfolio Standards (PDF) (24 pp, 1.87M).
- Public Benefits Funds for Renewable Energy are a pool of resources used by states to invest in clean energy supply projects. Funds are typically created by levying a small charge on customers' electricity rates (i.e., a system benefits charge). Policy details are available from EPA's Energy & Environment Guide to Action Chapter 3: Funding and Financial Incentive Policies (PDF) (40 pp, 1.92M).
- Output–Based Environmental Regulations establish emissions limits per unit of productive energy output of a process (i.e., electricity, thermal energy, or shaft power), with the goal of encouraging fuel conversion efficiency and renewable energy as air pollution control measures. Policy details are available from EPA's Energy and Environment Guide to Action Chapter 6: Policy Considerations for Combined Heat and Power: Policy Considerations for Combined Heat and Power (PDF) (36 pp, 1.62M).
- Interconnection Standards are processes and technical requirements that delineate how electric utilities in a state will treat renewable energy sources that need to connect to the electric grid. The establishment of standard procedures can reduce uncertainty and delays that renewable energy systems can encounter when obtaining electric grid connection in states that have not established interconnection standards. Policy details are available from EPA's Energy and Environment Guide to Action Chapter 7: Electric Utility Policies (PDF) (138 pp, 3.93M). The Interstate Renewable Energy Council (IREC) offers Model Interconnection Procedures for utility regulators.
- Net Metering enables residential or commercial customers who generate their own renewable electricity (e.g., solar photovoltaic panels) to receive compensation for the electricity they generate. Net metering rules require electric utilities in a state to ensure that customers' electric meters accurately track how much electricity is used on site or returned to the electric grid. When electricity generated on site is not used, it is returned to the grid; when on site generation is not sufficient to meet the customer's needs, the customer uses electricity from the grid. In effect, excess electricity is returned to the customer at a later time when they otherwise would have paid for it. The Interstate Renewable Energy Council (IREC) offers Model Net Metering Rules .
- Feed–In Tariffs encourage the development of renewable energy by obligating electric utilities to pay pre–established above-market rates for renewable power fed onto the grid. These tariffs, which may vary depending on the type of resource used, provide renewable generators with a set stream of income from their projects. Although common in Europe, in 2009, California, Hawaii, Vermont, and Washington were the first states in the U.S. to establish feed–in tariffs. Policy details are available from the National Renewable Energy Laboratory State Clean Energy Policies Analysis (SCEPA) Project: An Analysis of Renewable Energy Feed–in Tariffs in the United States (PDF) (51 pp, 1.14M) .
- Property Assessed Clean Energy (PACE) is a financing option that attaches the obligation to repay the cost of renewable energy installations or energy efficiency retrofits to a residential property rather than an individual borrower. This mechanism encourages property owners to invest in clean energy improvements even if the payback period is longer than the owner intends to keep the property. Similarly, in Environmental Finance Districts a local government issues bonds to fund projects with a public purpose, and property owners that benefit from the improvement then repay the bond through assessments on their property taxes. PACE NOW maintains a list of states and local governments that allow PACE programs.
- Financial Incentives—such as grants, loans, rebates, and tax credits—are provided in some states to encourage renewable energy development. The Database of State Incentives for Renewables and Efficiency tracks the availability of incentives offered by state.
EPA Programs Supporting Renewable Energy
GPP is a voluntary program that supports the organizational procurement of green power by offering expert advice, technical support, tools, and resources. The Partnership works with hundreds of companies, colleges and universities, organizations, and local, state, and federal government agencies. GPP provides resources to states on how they can lead by example by purchasing green power for government operations.
LMOP is a voluntary assistance and partnership program that promotes the use of landfill gas as a renewable, green energy source. By preventing emissions of methane through the development of landfill gas energy projects, LMOP helps businesses, states, energy providers, and communities protect the environment and build a sustainable future.
AgSTAR is a voluntary program jointly sponsored by EPA, the U.S. Department of Agriculture, and the U.S. Department of Energy. The program encourages the use of methane recovery (biogas) technologies at confined animal feeding operations that manage manure as liquids or slurries.
EPA is encouraging renewable energy development on current and formerly contaminated land and mining sites. This initiative identifies the renewable energy potential of these sites and provides other useful resources for communities, developers, industry, state and local governments or anyone interested in reusing these sites for renewable energy development.