Renewable Portfolio Standards (RPSs) are a policy tool enacted by many states to stimulate growth of the renewable energy industry. They require utilities to generate or purchase a certain amount of their electricity from renewable energy by a specific date. If a utility does not meet this goal, they are often subject to a penalty known as an Alternative Compliance Payment (ACP). Renewable Energy Credits (RECs), called Alternative Energy Credits (AECs) in PA are tradable credits which represent the electricity generated from a renewable resource that utilities can purchase to meet their RPS goal. Solar Renewable Energy Credits (SRECs) are a form of RECS that represent electricity generated from a solar system. RECs are subject to market dynamics with the set ACP effectively functioning as a price floor. RPSs are different in every state.
Tuesday, Feb 12, 2013