Study Shows that State Policies Support Renewable Energy Development

Experts often tout government policies as an important component of implementing energy efficiency. But, critics argue that such issues should not be subject to government regulation and should instead evolve out of the capitalistic market. Clean energy is spreading rapidly across the county, but what encourages such improvements?

The Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) has issued a report showing that renewable energy growth often follows public policies designed to spur such growth.

The report was designed to address a national need to track the progress of development, as well as the policies and support mechanisms that encourage this development. It also evaluates policy measures to determine their effectiveness, guide future efforts, and efficiently allocate resources.

According to the report, "State of the States 2009: Renewable Energy Development and the Role of Policy," California led the nation in terms of total renewable generation in 2007, while Maine generated the largest percentage of electricity from renewable resources at 26.1%.

Twenty-nine states and the District of Columbia have adopted a renewable portfolio standard (RPS), a policy that requires utilities to draw a percentage of their power from renewable energy sources. All but a dozen states have implemented policies for connecting renewable energy systems to the power grid (interconnection), while all but eight allow customers to earn credit for power fed back into the grid (net metering).

The NREL report also examined the impact of renewable energy policies using statistical and empirical methods. The analysis found that states with a net-metering policy in place in 2005 had more generation from non-hydropower renewable energy sources in 2007 than states that did not. States that required utilities to tell their customers the energy sources used to produce their electricity and that also required utilities to offer "green power” ended up with more renewable energy development. The report also found several features of RPS policies that significantly contributed to increased renewable energy development, but it failed to find a perfect combination of features for an RPS policy that correlated with significant increases in renewable energy.

The report discusses the factors, in addition to policies, that can affect the adoption of power generation technologies and offers suggestions on how policies can be used to address these variables. The result is policy suggestions that are tailored to the specific circumstances within each state.