A Renewable Portfolio Standard (RPS) requires that energy suppliers in a state produce a proportion of their energy from renewable energy. To meet these RPS requirements, energy suppliers can
(1) develop their own renewable energy facilities such as solar plants or wind farms to produce RECs, or
(2) purchase RECs from others that own renewable energy facilities.
Under certain renewable portfolio legislation, energy suppliers must secure a subset of energy from solar energy, often called a “solar carve-out”. Under the solar carve-out, a subset of the required renewable energy must come from solar energy.