A Renewable Portfolio Standard (RPS) is a mechanism a state may use to increase renewable energy generation using a cost-effective, market-based approach that also is administratively efficient. A RPS requires electric utilities and other retail electric providers to source a specified minimum amount of customer load with electricity from eligible renewable energy sources.

Currently there are 29 states plus the District of Columbia that have RPS policies in place. Together, these states account for more than half of the electricity sales in the United States.

The goal of a RPS is to stimulate developments of markets and technologies so that ultimately, power derived from renewable source will be economically competitive with conventional sources of electric power. States create RPS programs because of the energy, environmental, and economic benefits of renewable energy, and in addition, in some cases, other factors including increased energy efficiency also motivate creation of RPS standards.

States have tailored their RPS requirements in the context of their particular policy objectives, electricity market characteristics and renewable resource potential. Consequently, there is wide variation in RPS rules from state to state with regard to the minimum requirement of renewable energy, implementation timing, eligible technologies and resources, and other policy design details.

These standards range represent a range of goals, some modest and some very ambitious goals. Some states also have defined "carve-outs", defining specific percentages of the portfolio to be derived from a particular energy source, such as solar energy.

RPS requirements are most commonly applied to investor-owned utilities and electric service providers. It is unusual for mandatory RPS requirements to extend to municipal utilities and cooperatives, as these entities are predominately self-regulated. However, some states have included provisions for municipal utilities and cooperatives to voluntarily join the RPS program or to "self certify." The structure of a RPS can influence investor confidence, the ability of markets to develop, and opportunities for project developers and investors to recover capital investments.

Detailed information about the percentage goals of each state can be viewed on the websites of
U.S. Environmental Protection Agency (EPA) and
Center for climate and energy solutions .