Renewables Portfolio Standard
Renewable portfolio standards (RPS) require utilities to use renewable energy or renewable energy credits (RECs) to account for a certain percentage of their retail electricity sales -- or a certain amount of generating capacity -- according to a specified schedule. (Renewable portfolio goals are similar to RPS policies, but renewable portfolio goals are not legally binding.) Most U.S. states have established an RPS. The term “set-aside” or “carve-out” refers to a provision within an RPS that requires utilities to use a specific renewable resource (usually solar energy) to account for a certain percentage of their retail electricity sales (or a certain amount of generating capacity) within a specified timeframe.