Defining the Renewable Energy Portfolio

Facts About Solar Energy
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Solar and the Renewable Energy Portfolio

In America, energy portfolios help make solar a viable option, but not everyone knows what this term means. Every industry has terminology only understood within it.

These terms can be detrimental when the terminology impacts others outside the industry. Renewable energy portfolios are one of these terms.

A Renewable Energy Portfolio is more than a solar term used to describe something. It is a policy that can make or break a region’s solar opportunities.

What a Renewable Energy Portfolio Entails

Renewable Energy Portfolios are state-determined green policies. These policies determine how supportive a state will be towards renewables. It also determines how much of that support will go to any given renewable technology.

Renewable energy portfolios are not a one size fits all policy. State politicians determine green policies for their state. What this policy entails varies, but there are some basics that most states that support solar have.

Renewable Energy Portfolios: Standards Vs. Goals

Many states have renewable energy portfolio standards. Renewable energy portfolio standards are a state-mandated percentage of energy production dedicated to renewable sources.

Other states promote green energy through voluntary targets. Because these are goals instead of standards, states enforce them.

States that have goals instead of standards don’t encourage utilities to implement green technology, making it hard for residents that are interested in renewable energy. Regardless of whether a state decides to use goals or standards, there is a system in place that tracks renewable energy.

Renewable Energy Credits Explained

Because electricity is the same no matter what source created it, this can make energy sources hard to track. Renewable energy credits or certificates are used to track energy generated by renewables.

Every megawatt-hour of renewable energy receives a REC. Each REC has a specific serial number connected to one of 10 regional electronic REC tracking systems.

Renewable Energy Certificate Tracking Systems in North America
Photo Credit: NREL

Both voluntary and mandated states use RECs to keep track of renewable energy. However, REC use is a little different.

States without mandated standards use RECs to track progress towards their state goals. Utilities that don’t obtain the state-required RECs receive a fine, which encourages utilities to incentivize its renewable-generation customers for ownership of their RECs.

Renewable Energy Portfolios and Solar: Good, Better Best

Not every state has a renewable energy portfolio, let alone an enforced one. Which means there are varying degrees of solar policy to consider.

Understanding what to look for helps people considering solar determine how supportive their state is of solar. The website Solar Power Rocks rates states on its solar friendliness.

The site looks at 663 data points, which then get put into 13 factors that determine how well a state supports solar. Five policy factors make up 50 percent of a state’s grade. Five solar-incentive factors account for 40 percent, and two outcome-measurement factors account for 10 percent of each state’s grade.

What Goes Into a Good Portfolio

States that have a C have a decent solar policy. These states have at least one excellent policy or incentive factor.

What Makes a Renewable Portfolio Better

States with an overall B rating are doing great. These states have several good solar policies and one or two excellent solar incentives.

The Best Renewable Portfolios and Why

States with A ratings are the best states for solar customers. They have extremely good solar policies and a couple of great incentives.

Why Solar Policy is Important

When it comes down to it, state solar policy determines the future of the solar market in each state. A policy can barricade residents from getting solar for their homes or help make it possible. 

Take, for instance, Nevada’s struggle over solar policy. When Nevada pulled net metering away, many solar companies were forced to close shop and move out of Nevada.

Within solar policy factors, renewable portfolio standards account for 15 percent of the Solar Power Rocks state grading calculation. Renewable portfolios impact state grades because quality portfolios can encourage solar-friendly policy.

Does Your State Have Solar Friendly Policy?

Because some state government officials are against renewables, and not every state supports solar. This opposition doesn’t necessarily mean solar is unobtainable. However, It does mean that it may be harder to get and financially unattractive in that state.

For those that solely value solar’s return on investment, poor policies may deter them from getting solar. However, solar is still a valid option for most of the united states. Which means that most states have renewable energy portfolios and other solar-friendly policy, making solar worth considering.

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