Ohio’s Alternative Energy Portfolio Standard (AEPS)—also 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 of 12.5% renewable power by 2025. The state also established a separate Energy Efficiency Portfolio Standard requiring a 22% reduction in retail electricity sales by the end of 2025, but these are not considered for calculations on this and subsequent pages.
The state profile below explores the design of this policy, highlighting the factors that influence the success of Ohio’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 Ohio’s policy design affects its success.
- 12.5% of retail sales by 2025, subject to the cost cap
- Carve-out for solar
- Explicit cost cap at 3% of projected cost
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.
Ohio has a minimum annual requirement for solar energy that begins in 2009, starting at 0.004% and ramping up to 0.5% by 2024.
Compare the goal established in the RPS to what is being achieved.
The following chart compares the variety of sources currently used to generate Ohio’s electricity. The color of each bar is indicative of the carbon intensity of each source.
Cost Cap Details
Ohio has an explicit ‘cost cap’ at 3% of the cost of procuring the electricity from other sources. If the premium paid for renewable energy by a utility exceeds this amount, the utilities obligation under the AEPS will be reduced to the level of this cost cap (see S.B. 232 Sec. 4928.64. (C)(3)). Using the RPS Feasibility Calculator you can make adjustments to the cost cap, determining how this impacts the provision of renewable power and the overall viability of the RPS.
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).
Originally enacted in 2008, Ohio’s AEPSsets a standard for alternative energy, broadly defined by the legislation as both ‘renewable energy resources’ and ‘advanced energy resources’. This page only considers the renewable energy portion of the legislation. This half of the statute requires that 15% of the state’s retail electric sales come from renewable sources by 2024. Ohio’s AEPS is administered by the Public Utilities Commission of Ohio (PUCO) and applies to all retail electricity providers except municipal and cooperatives.
RPS Technical Details
|Eligible Technologies||Solar Photovoltaics (PV), Solar Thermal (to produce electricity), Wind, Geothermal, Biomass, Biologically Derived Methane Gas, Landfill Gas, Non-treated Waste Biomass Products, Solid Waste (except combustion), Fuel Cells, Storage Facilities (limited), and Hydroelectric Facilities (limited)|
|Geographic Eligibility||50% of Ohio’s renewable energy standard must be generated in state, while the other 50% must be deliverable into the state|
|Percent of Total Load||88.6%|
|Technology Requirements||Solar-Energy Resources—0.5% of retail electric sales by 2024|
|Sectors||Investor-Owned Utility, Retail Supplier|
|Penalty||Alternative compliance payments (ACPs) for the renewable portion of the legislation were originally set to $45/MWh (adjusted annually by the PUCO using the Consumer Price Index), which serves as the minimum allowable ACP. ACPs for the solar portion of the requirement were originally set to $450/MWh, reduced to $400/MWh for 2010 and 2011, and will be further reduced by $50/MWh every two years thereafter, until a $50/MWh minimum in 2024. A utility cannot recover the cost of ACPs from its customers.|
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