Wood is our second-largest source of renewable energy

Source: Stock photography (copyrighted)

A wind farm

Source: Stock photography (copyrighted)

What are the different types of renewable energy?

Biomass energy—Biomass energy is produced from nonfossilized plant materials. Wood and wood waste are the largest sources of biomass energy in the United States, followed by biofuels and municipal solid waste.

• 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 and cooking. The largest single source of wood energy is black liquor, a residue of pulp, paper, and paperboard production.
• Biofuels—Biofuels include ethanol and biodiesel. Most of the fuel ethanol used in the United States is produced from corn. Biodiesel is made from grain oils and animal fats.
• Municipal solid waste and biogas—Municipal solid waste (MSW), or garbage, contains biomass (or biogenic) materials such as paper, cardboard, food scraps, grass clippings, leaves, wood, leather products, and nonbiomass combustible materials (mainly plastics and other synthetic materials made from petroleum). MSW is burned in waste-to-energy plants to generate electricity. Many landfills in the United States collect and burn biogas to produce electricity.

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

• Conventional hydropower uses water in dams or flowing in streams and rivers to spin a turbine and generate electricity.
• Pumped storage systems use and generate electricity by moving water between two reservoirs at different elevations.

Geothermal energy—Geothermal energy is heat from the hot interior of the earth or near the earth's surface. 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 a controlled release of steam or water to the surface to power steam turbines to generate electricity. The near constant temperature of the earth near the earth's surface is used in geothermal heat pumps for heating and cooling buildings.

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 use solar collectors to absorb solar radiation to heat water or air for space heating and water heating.
• Solar thermal power plants use concentrating solar collectors to focus the sun's rays to heat a fluid to a high temperature. This fluid generates steam to power a turbine and a generator.
• Photovoltaic (PV) systems use solar electric cells that convert solar radiation directly into electricity. Individual PV cells are arranged into modules (panels) of varying electricity-producing capacities. PV systems range from single PV cells for powering calculators to large power plants with hundreds of modules to generate large amounts of electricity.

Renewable energy requirements and incentives

Federal, state, and local governments and electric utilities encourage investing in and using renewable energy and, in some cases, require it. Many programs and incentives are currently available. The Database of State Incentives for Renewables & Efficiency® (DSIRE) is a comprehensive source of information on government and utility requirements and incentives for renewable energy.

Government financial incentives
Several federal government tax credits, grants, and loan programs are available for qualifying renewable energy technologies and projects. The federal tax incentives, or credits, for qualifying renewable energy projects or equipment include the Renewable Electricity Production Tax Credit (PTC), the Investment Tax Credit (ITC), the Residential Energy Credit, and the Modified Accelerated Cost-Recovery System (MACRS). Grant and loan programs may be 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. Most states have some financial incentives available to support or subsidize the installation of renewable energy equipment.

A wind farm in Iowa

Source: National Renewable Energy Laboratory (public domain)

Renewable portfolio standards (RPS) and state mandates or goals
A renewable portfolio standard (RPS) typically requires that a percentage of electric power sales in a state comes from renewable energy sources. Some states have specific mandates for power generation from renewable energy and some states have voluntary goals. Compliance with RPS policies will sometimes require or allow trading of Renewable Energy Certificates.

Renewable Energy Certificates or Credits (RECs)
RECs, also known as green certificates, green tags, or tradable renewable certificates, are financial products that are available for sale, purchase, or trade. RECs allow a purchaser to pay for renewable generation without directly obtaining the electricity generated from qualifying energy sources.

Photovoltaic panels on a house

Source: National Renewable Energy Laboratory (copyrighted)

Net metering
Net metering allows electric utility customers to install qualifying renewable energy systems on their properties and to connect the systems to an electric utility's distribution system (or grid). The programs vary, but in general, electric utilities bill their net metering customers for the net amount of electricity the customers use during a defined period. The net amount is the customer's total electricity consumption minus the amount of electricity that the customer's renewable system generates. In some states, customers can sell the excess electricity that they generate with their systems to the utility. As of November 2017, 38 states and the District of Columbia have state-developed mandatory net metering rules for certain utilities. Two states do not have statewide rules, but some utilities in those two states allow net metering, and seven states have statewide-distributed generation compensation rules other than net metering. Most net metered systems are solar photovoltaic systems.

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

A biodiesel fuel pump

Source: Stock photography (copyrighted)

Ethanol and other renewable motor fuels
Several federal and state requirements and incentives are in effect 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. Other federal programs 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.

What are renewable portfolio standards?

Renewable portfolio standards (RPS), also referred to as renewable electricity standards (RES), are policies designed to increase the use of renewable energy sources for electricity generation. These policies require or encourage electricity suppliers to provide their customers with a stated minimum share of electricity from eligible renewable resources. Although national RPS or other clean energy policies have been proposed, no federal RPS or similar policy is currently in place. However, most states have enacted their own 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 supply that comes 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 they 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, 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 resources. Some states focus the RPS requirement on large investor-owned utilities, while others apply the standards to all utilities. Details on state RPS programs are available in the Database of State Incentives for Renewables & Efficiency® (DSIRE).

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 the RPS requirement may either trade or sell RECs to other electricity suppliers who may not have enough RPS-eligible electricity to meet their RPS requirements. 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 generation from eligible renewable resources?

States with and without RPS policies have seen increases in the amount of electricity generation from renewable resources. A combination of federal incentives and market conditions, as well as state RPS policies and other programs, have driven increases in renewable electricity generation.

About half of all growth in U.S. renewable electricity generation and generation capacity from 2000 through 2016 was associated with state RPS requirements. By the end of 2016, most states with RPS had met or exceeded interim RPS targets with renewable generation from qualifying RPS generation sources or purchases of RECs. Details on the status of compliance with state RPS in 2016 are available in the report U.S. Renewables Portfolio Standards: 2017 Annual Status Report

A number of factors helped create an environment favorable for RPS compliance:

• RPS-qualified generation projects that take advantage of federal incentives
• Reductions in the cost of wind, solar, and other renewable technologies
• Complementary state and local policies that either reduce costs (for example, equipment rebates) or increase revenue streams (for example, net metering) associated with RPS-eligible technologies

Although some regions may produce excess RPS-qualifying generation, others may produce just enough to meet the requirement or may need to import electricity from nearby regions to meet state targets.