North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS)--or more succinctly known as a Renewable Portfolio Standard (RPS)—is intended to increase use of renewable resources in the state by establishing the minimum amount of renewable energy that the state’s electricity providers must sell in a given year. This legally-established renewable energy procurement goal gradually increases over time to meet the overall target for investor owned utilities of 12% renewable power by 2021. Electric cooperatives and municipal utilities must derive 10% of their retail sales from renewable sources by 2018.
The state profile below explores the design of this policy, highlighting the factors that influence the success of North Carolina’s RPS goals and the tradeoffs inherent to it. Once you’re comfortable with the information on this page, you can evaluate the policy’s expected viability with the RPS Feasibility Calculator. You can also use the calculator to change the policy requirements, trajectory, cost cap, and more, to see how altering North Carolina’s policy design affects its success.
- 12.5% of the state’s electricity supplied from investor-owned utilities must be from renewable sources by 2021, (10% by 2018 for electric cooperatives and municipal utilities
- Carve-outs for solar, swine waste, and poultry waste
- Explicit cost cap (currently) at $12 over average annual residential electricity bill
Carve-outs can create economic opportunities in the state by introducing new or promising technologies into the market. However, these standards limit the utilities’ ability to substitute between renewable energy sources, potentially increasing the cost of the policy. North Carolina’s REPS has small carve-outs for solar power and swine waste (both 0.2% of total annual retail sales by 2018) (see NC General Statute (G.S.) § 62-133.8(d-e)). It also has a smaller carve-out for poultry waste (900,000 MWh by 2014) (see ibid NC G.S. § 62-133.8(f)).
Compare the goal established in the RPS to what is being achieved.
The following chart compares the variety of sources currently used to generate North carolina’s electricity. The color of each bar is indicative of the carbon intensity of each source.
Cost Cap Details
North Carolina has an explicit cost cap (currently) at a $12 incremental increase in the average annual residential bill as a result of the RESP. This cost cap will increase to $34 in 2015 for residential customers. There are separate cost caps for commercial and industrial customers (currently $150 and $1000 respectively). The full list of cost caps and their trajectories are listed in NC G.S. § 62-133(h)(4) Utilities are not obligated to purchase renewable power that exceeds this cost cap (see NC G.S. § 62-133.8(h)(3)). Moneys allocated under this cost cap can also be used from up to $1 million on renewable energy research.
Historic retail prices (¢ / kWh)
The above chart presents historical data from the Energy Information Administration (EIA) on the price at which residential customers can purchase electricity. Typically, states set explicit cost caps relative to the retail price (as opposed to the lower wholesale price).
The REPS was established in 2007 with Senate Bill 3, which required all investor-owned utilities to supply 12.5% of the state's retail electricity sales with qualifying renewable energy sources by 2021. The bill also sets out that municipal utilities and electric cooperatives supply 10% of their sales with renewable sources by 2018. The North Carolina Utilities Commission enforces the requirements, which serve the purpose of developing electricity procurement plans for renewable power for the state. Renewable energy may be bundled with RECs. It is of note that all REPS obligations are a percentage of the prior years total retail sales.
RPS Technical Details
|Eligible Technologies||Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Electric, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy|
|Geographic Eligibility||According to Chapter 8 of the NCUC’s Current Rules, North Carolina utilities are allowed to request a review for an application of construction of a renewables facility in a state outside of North Carolina if it is intended to serve customers in North Carolina. Electric public utilities are required to file an application supported by relevant testimony after the issuance of a license to operate by the other state.|
|Percent of Total Load||Primary RPS: 75.2%|
|Technology Requirements||0.2% Solar by 2018; 0.2% Swine Waste by 2018; 900,000 MWh Poultry Waste by 2015|
|Sectors||Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative|
Tools and other links
- Database of State Incentives for Renewables & Efficiency (DSIRE) RPS data page—Datasets available for download in .xlsx format
- National Renewable Energy Laboratory (NREL) Energy Analysis Portal—Resources on renewable energy policies, and interactive web tools
- Energy Information Administration (EIA) U.S. Energy Mapping System—An interactive energy resource map with a myriad of data layers to explore