renewable portfolio standard (RPS)

A Renewable Portfolio Standard (RPS) is a policy that requires utility companies to ensure a certain percentage of the electricity they sell comes from renewable sources like wind, solar, or biomass. It encourages the use of cleaner energy by setting legal targets, often gradually increasing over time. Utilities can meet requirements either by producing renewable energy themselves or by purchasing credits from other renewable energy producers. RPS helps reduce reliance on fossil fuels, lowers greenhouse gas emissions, and promotes investment in sustainable energy technologies, contributing to environmental and economic benefits.