Defining the Renewable Energy Portfolio

Facts About Solar Energy
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Solar and the Renewable Energy Portfolio

In America, energy portfolios are key to solar, but not everyone knows what this term means. Every industry has terminology that is only understood within it.

This 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. Instead, each state’s politicians determine what green policy is in the best interest for their state. What this policy entails varies, but there are a couple of basic things that each state considers.

Renewable Energy Portfolios: Standards Vs. Goals

Many states have renewable energy portfolio standards. This is 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. This makes 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.

These RECs are given for every megawatt-hour of renewable energy. 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, how they are used is a little different.

States with renewable energy portfolio standards fine utilities that don’t obtain a certain amount of RECs. This helps encourage utilities to pay their renewable generating customers for their RECs. States without mandated standards use RECs to track progress towards their state goals.

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 are then put into 13 factors that determine how well a state supports solar. 5 policy factors make up 50 percent of a state’s grade. 5 solar incentive factors account for 40 percent, and 2 outcome measurement factors account for 10 percent of each state’s grade.

What Goes Into a Good Portfolio

States that have been given 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 an extremely good solar policy 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. This is because policy can barricade residents from getting solar for their homes. 

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

Within the solar policy factors, renewable portfolio standards account for 15 percent of the Solar Power Rocks state grading calculation. State grades are heavily impacted by renewable portfolios because a good portfolio can encourage solar-friendly policy.

Does Your State Have Solar Friendly Policy?

Because some state government officials are against renewables, not every state supports solar. This, however, doesn’t necessarily mean solar is unobtainable. It does, however, 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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