Wind, solar, and other renewable energy development in the United States is moving forward at a remarkable rate. Costs for technologies such as photovoltaic solar panels are making alternative power more economical for residential consumers. Utility-scale non-fossil fuel generation, however, owes a significant part of its growth to the creation of the Renewable Portfolio Standard.
Renewable Energy Standards
Currently, 29 states have an obligatory RPS while eight states have a non-obligatory RPS or renewable energy goal. RPS programs vary considerably by state. An RPS spells out time-specific objectives for renewable energy production. Annual percentage of retail energy sales is the basis the majority of RPS goals while others use installed capacity. Each RPS specifies which generation resources are qualified to fulfill those goals.
Retail power suppliers assume the costs of RPS compliance. Although RPS has been a successful catalyst for sustainable energy production, its cost factors into Massachusetts electricity rates. This has caused in some marketplace observers to label RPS as an unseen tax on electricity consumers. Regardless of whether that characterization is appropriate or reasonable, it is essential for consumers to understand the concept of RPS.
Massachusetts Renewable Energy
Massachusetts has an extremely diverse RPS. Compliance categories are Class I, Class II Renewables, Class II Waste Energy, two solar carve-outs and an Alternative Energy Portfolio Standard.
Class I sources are essentially new sources that began operation after 1997. These sources include solar photovoltaic, solar thermal electric, wind energy, small hydropower, landfill methane, anaerobic digester gas, marine or hydrokinetic energy, geothermal energy, and eligible biomass fuel. The 2015 Class I requirement is 10% and is set to increase by one percent each year. A photovoltaic (PV) solar carve-out of 400 MW of capacity was added to Class I. A second PV solar carve-out is designed to support Massachusetts reaching an installed capacity of 1600 MW.
Class II Renewables refers to renewable generation resources in operation prior to 2008. The Class II Renewable Generation obligation is 3.5%. Class II Waste Energy refers to facilities that burn municipal waste to generate electricity. These waste-to-energy facilities also provide funding to support recycling programs in Massachusetts. The Class II Waste Energy Obligation is 3.6%.
Finally, Massachusetts has an Alternative Energy Portfolio Standard (APS). The APS is designed to provide an incentive for installing alternative energy systems that are not renewable. These systems include combined heat and power, flywheel storage, coal gasification, and efficient steam technologies. The underlying concept of these technologies is that they reduce fossil fuel-based electricity generation. The APS was set at 1% in 2009 and increased by 0.5% until 2014. After 2014, the increase is 0.25% per year.