A state policy that requires electric utilities to source a portion of their energy needs from renewable energy resources (including solar, wind, and hydropower). About 30 states plus the District of Columbia have a mandatory RPS program. These programs vary widely from state to state in terms of target percentages and dates. Some states have also adopted specific targets for solar energy (referred to as solar carve-outs) to encourage the development of these types of projects.

Many RPS programs also include a renewable energy credit (REC) trading system to minimize the costs of compliance with the RPS program. Under these policies, a producer that generates more renewable electricity than required to meet its RPS obligation may either trade or sell RECs to another producer or supplier that does not have enough RPS-eligible renewable electricity to meet its RPS requirement. Energy suppliers can, therefore, meet their solar RPS requirements by buying RECs from entities that own solar systems and produce RECs. Only one entity, however, the generator or the REC holder, may take the credit. Certain states also make a number of credits available for sale.

For more information on these programs, see: