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What is a Renewable Portfolio Standard (RPS)?

A Renewable Portfolio Standard (RPS) is a law that requires electric utilities to generate a certain percentage of electricity from renewable sources by a certain date. If a utility company fails to meet these goals, it can be subject to large fines. Therefore, utilities are inclined to offer perks to homeowners to meet these targets. The RPS is also used to determine the amount and type of incentives available for solar buyers. 33 states and the District of Columbia have RPS laws, though 4 of those are voluntary goals rather than mandates. This is only a summary of what RPS laws are. But, since an RPS is a state law, it can get quite complicated.