Effects of State Government Policies on Electricity Capacity from Non-Hydropower Renewable Sources∗

This paper ascertains which state policies are accelerating deployment of nonhydropower renewable electricity generation capacity into a states electric power industry. A state fixed-effects model is used to simultaneously estimate the effects of multiple state policies in all fifty states. As would be expected, policies that lead to significant increases in actual renewable capacity in that state either set a Renewables Portfolio Standard with a certain level of required renewable capacity or use Clean Energy Funds to directly fund utility-scale renewable capacity construction. A surprising result is that Required Green Power Options, a policy that merely requires all utilities in a state to offer the option for consumers to purchase renewable energy at a premium rate, has a sizable impact on non-hydro renewable capacity in that state. ∗I would like to thank Lawrence Kenny, Sanford Berg, Jonathan Hamilton, and Paul Sotkiewicz for their helpful comments and advice.