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What is renewable energy?

Unlike fossil fuels, which are finite, renewable energy sources regenerate.

There are five commonly used renewable energy sources:

What role does renewable energy play in the United States?

More than 150 years ago, wood supplied nearly 90% of the nation's energy needs. As more consumers began using coal, petroleum, and natural gas, the United States relied less on wood as an energy source. Today, the use of renewable energy sources is increasing, especially biofuels, solar, and wind.

In 2015, about 10% of total U.S. energy consumption was from renewable energy sources (or about 9.7 quadrillion British thermal units (Btu)—1 quadrillion is the number 1 followed by 15 zeros). More than half of U.S. renewable energy is used for producing electricity, and about 13% of U.S. electricity generation was from renewable energy sources in 2015.

Renewable energy plays an important role in reducing greenhouse gas emissions. When renewable energy sources are used, the demand for fossil fuels is reduced. Unlike fossil fuels, non-biomass renewable sources of energy (hydropower, geothermal, wind, and solar) do not directly emit greenhouse gases.

The consumption of biofuels and nonhydroelectric renewable energy sources more than doubled from 2000 to 2015, mainly because of state and federal government mandates and incentives for renewable energy. The U.S. Energy Information Administration (EIA) projects that the use of renewable energy in the United States will continue to grow through 2040.

Why don't we use more renewable energy?

In general, renewable energy is more expensive to produce and to use than fossil fuel energy. Favorable renewable resources are often located in remote areas, and it can be expensive to build power lines from the renewable energy sources to the cities that need the electricity. In addition, renewable sources are not always available:

  • Clouds reduce electricity from solar power plants.
  • Days with low wind reduce electricity from wind farms.
  • Droughts reduce the water available for hydropower.

Last updated: September 2, 2016

Wood is our second-largest source of renewable energy

Source: Stock photography (copyrighted)

A wind farm
wind farm

Source: Stock photography (copyrighted)

What are the different types of renewable energy?

Biomass energy—Biomass energy is produced from nonfossilized materials derived from plants. Wood and wood waste are the largest sources of biomass energy, followed by biofuels and energy from waste.

  • Municipal solid waste and biogas—Garbage, or municipal solid waste (MSW) contains biomass (or biogenic) materials like paper, cardboard, food scraps, grass clippings, leaves, wood, leather products, and other nonbiomass combustible materials, mainly plastics and other synthetic materials made from petroleum. MSW can be recycled, composted, sent to landfills, or used in waste-to-energy plants. There are hundreds of landfills in the United States that recover biogas, or methane, which forms as waste decomposes in low-oxygen (anaerobic) conditions. The methane is burned to produce electricity and heat.
  • Wood—Wood biomass includes wood pellets; wood chips from forestry operations; residues from lumber, pulp/paper, and furniture mills; and fuel wood for space heating. The largest single source of wood energy is black liquor, a residue of pulp, paper, and paperboard production.
  • Biofuels—Biofuels include alcohol fuels like ethanol and biodiesel, a fuel made from grain oils and animal fats. Biofuels used in the United States are mostly fuel ethanol, which is produced from corn.

Hydropower—Hydropower is electricity produced from flowing water. Hydropower output varies depending on rainfall. Most hydropower is produced at large facilities built by the federal government, such as the Grand Coulee Dam on the Columbia River in Washington—the largest single electric power facility in the United States. There are two types of hydropower.

  • Conventional hydropower uses dams to collect and release water to spin a turbine and create electricity.
  • Pumped storage generates electricity by moving water between two reservoirs at different elevations.

Geothermal energy—Geothermal energy is energy from the hot interior of the earth. Fissures in the earth's crust allow water heated by geothermal energy to rise naturally to the surface at hot springs and geysers. Wells drilled into the earth allow steam or water to escape to the surface in a controlled manner to operate steam turbines and to generate electricity.

Wind energy—Wind turbines use blades to collect the wind's kinetic energy. Wind flows over the blades creating lift, which causes the blades to turn. The blades are connected to a drive shaft that turns an electric generator, which produces electricity.

Solar energy—Solar energy systems use radiation from the sun to produce heat and electricity. There are three basic categories of solar energy systems:

  • Solar thermal systems for heating buildings and water—Solar thermal systems use solar collectors to absorb solar radiation to heat water or air for space heating and water heating.
  • Solar thermal-electric power plants—Solar thermal-electric power plants use solar collectors to focus the sun's rays to heat fluid to a high temperature. This working fluid can then be used to generate steam to operate a turbine, which is then used to produce electricity in a generator. The three types of solar-thermal power systems used in the United States are parabolic trough, solar dish, and solar power towers.
  • Photovoltaic systems—Photovoltaic (PV) systems use solar electric cells that convert solar radiation directly into electricity. Individual PV cells are configured into modules of varying electricity producing capacities. PV applications range from single solar cells for powering watches to large installations with hundreds of modules for electric power production.

Last updated: September 25, 2015

Renewable energy requirements and incentives

Investment in and use of renewable energy is encouraged, and in some cases required, by federal, state, and local governments, and electric utilities. Many programs and incentives are currently available. The Database of State Incentives for Renewable Energy and Efficiency (DSIRE) is a comprehensive source for information about the types and status of government and utility requirements and incentives for renewable energy.

Government financial incentives—Several federal government tax credit, grant, and loan programs are available for qualifying renewable energy technologies and projects. These include the Renewable Energy Production Tax Credit (PTC), the Business Energy Investment Tax Credit (ITC), personal income tax credit, and grant and loan programs available from several government agencies, including the U.S. Department of Agriculture, the U.S. Department of Energy (DOE), and the U.S. Department of the Interior. Every state has some type of financial incentive to support or subsidize the installation of renewable energy equipment, including grants, loans, rebates, and tax credits.

Renewable portfolio standards (RPS) and state mandates or goals—A renewable portfolio standard (RPS) typically requires that a percentage of electric power sales come from renewable energy sources. Some states have specific mandates for power generation from renewable energy, while others have voluntary goals. Compliance with RPS policies can sometimes require or allow for the trading of Renewable Energy Certificates.

Renewable Energy Certificates (RECs)—RECs, also known as green certificates, green tags, or tradable renewable certificates, are financial products that are sold, purchased, and traded. These financial products allow the purchaser to pay for renewable generation without the need for physical or contractual delivery of electricity generated from qualifying energy sources.

Net metering programs—Net metering allows electric utility customers to install qualifying renewable energy systems that are connected to an electric utility's distribution system (or grid) on their property to offset their use of electricity from the grid. The programs vary, but in general, electric utility customers are billed for the net amount of the grid-supplied electricity that they use. The net amount is the customer's total electricity consumption minus the amount that is generated by their renewable system. In some states, customers can sell excess electricity generated by their system to the utility. Forty-three states and the District of Columbia have statewide or districtwide net metering programs that apply to all or certain types of electric utilities.

Feed-in tariffs (FITs)—Several states and individual electric utilities in the United States have established special rates for purchasing electricity from certain types of renewable energy systems. These rates, sometimes known as feed-in tariffs (FITs), are generally higher than retail electricity rates to encourage new projects of specific types of renewable energy technologies.

Green power programs—Consumers in nearly every state can purchase green power, which represents electricity generated from specific types of renewable energy resources. Most of these programs generally involve the physical or contractual delivery of the generation resource to the customer or utility.

A biodiesel fuel pump
A standard gas and biodiesel pump.

Source: Stock photography (copyrighted)

Ethanol and other renewable motor fuels—There are several federal and state requirements and incentives for the production, sale, and use of ethanol, biodiesel, and other fuels made from biomass. The federal Energy Independence and Security Act of 2007 requires that 36 billion gallons of biofuels be used in the United States per year by 2022. Several states have their own renewable fuel standards or requirements. There are other federal programs that provide financial support and incentives for ethanol and other biofuels producers. Many states have their own programs that support or promote the use of biofuels. The DOE's Alternative Fuel Data Center is a source of information on these types of programs.

Renewables Research and Development—The DOE and other federal government agencies, fund research and development of renewable energy technologies. Most of the research and development is carried out at the National Labs and in cooperation with academic institutions and private companies. The availability of these programs depends on annual appropriations from the United States Congress.

Last updated: October 8, 2015

What are renewable portfolio standards?

Did you know?

As of July 2015, 30 states and Washington, DC had enforceable renewable portfolio standards (RPS) or other mandated renewable energy capacity policies, and seven states had voluntary goals for renewable energy generation.

Map of States with Renewable Energy Profiles Standards

Solar and wind are expected to show strong growth in the future, partly as a result of RPS programs.

Area chart showing: Electricity generation from non-hydropower renewable sources, 1990-2040. Source: Energy Information Administration

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015

Renewable portfolio standards (RPS), also referred to as renewable electricity standards (RES), are policies designed to increase generation of electricity from renewable resources. These policies require or encourage electricity suppliers to provide a specific minimum share of their electricity from eligible renewable resources. Although national RPS or other clean energy policies have been proposed, there is currently no federal RPS or similar policy in place. However, most states have enacted RPS programs.

How have RPS programs been implemented?

State RPS programs vary widely in terms of program structure, enforcement mechanisms, size, and application. No two state programs are exactly the same.

A wide range of policies fall under the RPS umbrella. In general, RPS set a minimum requirement for the share of electricity to be supplied from designated renewable energy resources by a certain date or year. Generally, these resources include wind, solar, geothermal, biomass, and some types of hydroelectricity, but may also include other resources such as landfill gas, municipal solid waste, and ocean energy. Some programs also give credits for various types of renewable space heating and water heating, and for fuel cells, energy efficiency measures, and advanced fossil-fueled technologies.

Some states set targets for specific types of renewable energy sources or technologies to encourage the development and use of those particular resources. Some states focus the RPS requirement on large investor-owned utilities, while others apply the standards to all utilities. Detailed descriptions of state RPS programs are available in the Database of State Incentives for Renewables & Efficiency.

A common feature of RPS policies is a renewable electricity credit (REC) trading system that reduces the cost to comply with the RPS. A utility that generates more renewable electricity than is required to meet its RPS obligation may either trade or sell RECs to other electricity suppliers who may not have enough RPS-eligible electricity to meet their RPS requirement. Some states make a certain number of credits available for sale. In general, only one entity—the generator or the REC holder—may take credit for the renewable attribute of generation from RPS-eligible sources. In addition to the cost control mechanism of a REC, many RPS programs have escape clauses if renewable generation exceeds a specified cost threshold.

Does an RPS program increase levels of electricity generated from eligible renewable resources?

An RPS is one policy mechanism used to encourage development of renewable energy. States with RPS policies have seen an increase in the amount of electricity generated from eligible renewable resources. Additionally, other states without RPS policies have also seen significant increases in renewable generation over the past few years resulting from a combination of federal incentives, state programs, and market conditions. Increases in renewable generation have been driven by the availability of federal financial incentives, as well as by state RPS policies.

Last updated: December 7, 2015