Renewable Energy Law

Introduction

Renewable energy law in the United States encompasses federal and state policies designed to promote the development and deployment of renewable energy resources, including solar, wind, hydroelectric, geothermal, and biomass. The legal framework includes tax incentives, regulatory requirements, renewable portfolio standards, net metering policies, and transmission access rules. The Inflation Reduction Act of 2022 represents the most significant federal legislation supporting renewable energy.

The Inflation Reduction Act

The Inflation Reduction Act (IRA) of 2022 enacted the most substantial federal investments in clean energy in US history. The IRA extended and modified tax credits for renewable energy, including the Production Tax Credit (PTC) under § 45 and the Investment Tax Credit (ITC) under § 48. The PTC provides a per-kilowatt-hour credit for electricity generated from qualified renewable resources, while the ITC provides a percentage credit for qualified energy property placed in service.

The IRA also established clean energy tax credits that are technology-neutral and designed to phase down as emissions decrease. The Section 45Y Clean Electricity Production Credit and Section 48Y Clean Electricity Investment Credit replace the technology-specific credits for facilities placed in service after 2024. The IRA includes prevailing wage and apprenticeship requirements, domestic content bonuses, and energy community bonuses that increase the credit amounts for qualifying projects.

Renewable Portfolio Standards

Renewable Portfolio Standards (RPS) are state-level policies that require electricity suppliers to obtain a specified percentage of their electricity from renewable resources. Over thirty states and the District of Columbia have enacted RPS policies with varying targets, timelines, and eligible resources. Some states have adopted Clean Energy Standards (CES) that also include nuclear power and other low-carbon resources.

RPS policies typically include renewable energy certificates (RECs) that represent the environmental attributes of renewable generation. Suppliers may purchase RECs to demonstrate compliance with RPS requirements. RPS policies have been effective drivers of renewable energy deployment, accounting for a significant share of wind and solar development.

Net Metering

Net metering allows customers who generate electricity from renewable sources, typically rooftop solar, to receive credit for excess electricity they supply to the grid. Under net metering, the customer’s electric meter runs backward when the customer generates more electricity than they consume, and the customer is billed only for the net consumption.

Net metering policies vary significantly among states. Some states retain traditional net metering with full retail rate compensation, while others have adopted net billing or buy-all, sell-all arrangements that compensate customer-generators at less than retail rates. The debate over net metering reflects tensions between the interests of customer-generators, utilities, and non-participating customers.

Transmission for Renewable Energy

Integrating renewable energy resources into the electric grid requires new transmission infrastructure, as the best renewable resources are often located far from population centers. FERC Order 1000 requires regional transmission planning and cost allocation that consider public policy requirements, including state RPS policies. Interconnection rules govern the process for connecting renewable generators to the transmission system.

The queue of projects seeking interconnection has grown substantially, creating backlogs and delays. FERC Order 2023 reformed the interconnection process to improve efficiency, requiring first-ready, first-served cluster studies and imposing penalties for serial delays.

Environmental Regulation of Renewable Energy

Renewable energy projects are subject to environmental review under the National Environmental Policy Act (NEPA) when they require federal permits or occur on federal land. The Bureau of Land Management and the Forest Service oversee renewable energy development on public lands. Offshore wind energy development is regulated by the Bureau of Ocean Energy Management under the Outer Continental Shelf Lands Act.

Conclusion

Renewable energy law is a dynamic field shaped by federal tax incentives, state RPS policies, and regulatory frameworks for transmission and interconnection. The Inflation Reduction Act has significantly expanded federal support for renewable energy. State policies continue to drive deployment, with net metering and RPS policies evolving to address changing market conditions and policy goals.