What Happens to Renewable Energy Credits in Ohio After 2026?

Ohio currently requires that electricity suppliers buy renewable energy credits. This requirement ends after 2026. State law sets one final benchmark, 8.5 percent renewable electricity in 2026, and per the Public Utilities Commission of Ohio, nothing replaces it after that. For businesses buying power in Ohio, that removes one specific cost from the price of electricity starting in 2027. The bigger drivers of what you pay, capacity charges, transmission and the commodity itself, are unaffected.

What is a renewable energy credit, and why has Ohio required them?

A renewable energy credit, or REC, is a certificate representing one megawatt hour of electricity generated from a renewable source. They are not the same as carbon offsets, which represent emissions avoided somewhere else.

A supplier does not have to build wind or solar to meet a renewable standard. It buys credits from generators that did, then retires those credits to prove it complied. Ohio's standard applies to the local utility and to competitive retail suppliers alike, so the cost of buying credits reaches customers either way. It just lands in a different place depending on who sells you your electricity.

How do renewable energy credits in Ohio show up on your bill?

If your power comes from the utility's default service, the utility buys the credits on your behalf and recovers the cost through a separate charge on your bill called the alternative energy rider. A rider is an add-on charge that lets a utility collect one specific cost, and this one covers renewable energy credit compliance and nothing else. Its rate resets quarterly, which is one of the more practical reasons to track what your state utility commission approves.

That rider is where Ohio's renewable energy credit requirement actually lands on a bill, which makes it the number to watch. Per the commission's published rider rates for 2026, third-quarter rates ranged from $0.0001986 per kilowatt hour at Dayton Power and Light to $0.0038937 per kilowatt hour at Ohio Power Company, known to customers as AEP Ohio (American Electric Power).

If you buy from a competitive supplier, you do not pay the utility's rider at all. It is bypassable. Your supplier carries the compliance obligation and prices it into the supply rate you signed, which is a clean illustration of why supply and delivery charges behave differently. The commission does not regulate competitive supply prices, so no published figure exists for what your supplier charged you. It is baked into the rate you pay.

Will your electricity rate actually drop in 2027?

A little, and less than the headline suggests. Capacity charges, transmission charges and the energy commodity itself all move in far bigger increments than a rider measured in ten-thousandths of a cent.

The more important question is whether the reduction reaches you at all. On default service it should, as the utility trues up its final compliance year and the rider winds down. Under a fixed-price contract with a competitive supplier, the compliance cost was priced in on the day you signed. Ending the obligation does not automatically hand that money back.

What should you check in your contract now?

Start with the term. A fixed contract signed in 2025 and running through 2028 was priced with a compliance obligation for part of that window and none for the rest. Ask your supplier how they treated the years after 2026.

Then read the change-in-law clause. Commercial supply contracts commonly let the supplier pass through new or increased regulatory costs. Whether that clause runs in both directions is the part worth reading closely. 

One thing does not change. The mandate ending has no effect on voluntary renewable purchasing. If you report Scope 2 emissions, meaning the indirect emissions from the electricity you buy and use, or you carry a corporate renewable target, you can still buy credits in Ohio after 2026. The difference is that it becomes a decision you make rather than a cost the market makes for you.

Key Takeaway

Ohio's renewable energy credits mandate ends after 2026, which strips a small compliance cost out of electricity prices in the state starting in 2027. Utility default-service customers should see the alternative energy rider wind down. Customers under fixed contracts with competitive suppliers should read their change-in-law language, because the savings only reach them if the contract says they do.