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State of the States 2010 — The Role of Policy in Clean Energy Market Transformation

NREL's State of the States 2010 analysis provides further understanding about how policy interacts with the development of the clean energy market. It quantifies the connection between a broad array of energy efficiency and renewable energy policies and actual energy savings and increases in renewable resource development.

NREL produced the State of the States 2010 analysis under its Clean Energy Policy Analyses project.

Key Findings

The State of the States 2010 analysis draws broad conclusions about how to establish state policies that positively impact the development of clean energy markets.

  • Policy alone does not explain variability in state clean energy growth. When other variables—population, electricity price, and number of years a policy is in place—are incorporated into the models, the results better explained the variation among state clean energy development.

  • Programs tailored to the specific needs of the technology may be more beneficial to renewable energy development. Currently, state clean energy policies are more targeted at influencing the resource development of wind and solar than biomass and geothermal. Therefore, even if state policies broadly apply across renewable energy technologies, they may not meet the development needs of all technologies. For example, a rebate program with a capacity limit of 5 kilowatts may be available to geothermal project developers, but because electricity generation from geothermal resources is commonly on a multi-megawatt scale, the rebate program may not provide enough of an incentive to drive development.

  • State policymakers that implement a suite of policies may be more effective at driving clean energy development than those that choose a single or small number of mechanisms. For example, a wide variety of policies contributes to photovoltaic development across states. These policies, along with non-policy factors explain variation among states in wind growth. This may indicate that the specific policies in place are less important than the grouping of policies.

  • Policies are more connected with clean energy development the longer they are in place. This indicates policy longevity is an important aspect of effectiveness. Furthermore, due to more intensive construction requirements for geothermal and biomass projects, a longer study period may be needed to quantify policy impacts on the development of these technologies.

For more information, see the full report, State of the States 2010: The Role of Policy in Clean Energy Market Transformation.

Related Information

The following NREL analyses track the progress of clean energy development within the states: