American Renewable Energy Act - Fall

Advisor: Andrea Schmitz

The American Renewable Energy Act (H.R. 890) addresses the environmental and economic challenges associated with the United States’ reliance on fossil fuel-based electricity generation. The bill proposes a national renewable portfolio standard (RPS), requiring utilities to generate a specified percentage of electricity from renewable sources such as wind, solar, biomass, and geothermal energy. To facilitate compliance, the Act introduces a market-based system of renewable energy credits, allowing utilities to trade credits and meet targets cost-effectively. This hybrid approach combines regulatory mandates with market flexibility to accelerate the transition toward a cleaner energy mix while addressing growing electricity demand.

The report emphasizes that successful implementation will require robust institutional design, including systems for tracking and verifying renewable energy credits, ensuring adequate transmission infrastructure, and supporting market development. Key challenges include variability in renewable energy supply, disparities across states, and the need for coordination between federal and state policies. The report also identifies external factors not explicitly addressed in the legislation—such as infrastructure investment and market readiness—as critical to program success. Overall, the Act is framed as a pragmatic step toward decarbonizing the electricity sector, leveraging market mechanisms to align environmental objectives with economic incentives while requiring careful program design and governance.

Learn more about the MPA-ESP Workshop in Applied Earth Systems Management.