California Gov. Jerry Brown plans to sign the country's most aggressive alternative energy mandate in the U.S. on Tuesday.
The law requires private utilities to produce one-third of energy from renewable sources.
The measure requires California utilities and other power providers to draw 33 percent of their power from solar panels, windmills, landfill gases, small hydroelectric plants and other renewable sources by the year 2020.
Supporters said the increase from the current 20 percent target will reassure investors that demand for renewable energy will grow, fueling a field that has been one of the few growth spots for California's economy.
"Instead of watching from the sidelines, America needs to get back in the clean energy race, and that's exactly what California is doing," said Stephanie Mueller, spokeswoman for the U.S. Department of Energy.
Critics of the legislation said sticking with traditional energy sources such as coal and natural gas would be cheaper, keeping costs down for business and residents.
Business groups point to estimates that the higher standard could drive up electricity costs for Californians by more than 7 percent, despite language in the legislation to limit cost increases.
"Industry in California already pays electricity rates about 50 percent higher than the rest of the country," said Gino DiCaro, spokesman for the California Manufacturers and Technology Association. "With 33 percent, those rates are going to go up even more."
Gov. Brown said Monday he would look carefully at whether the new standard will drive up electricity costs but said increasing use of renewable sources makes sense for California and the country.
"I know one thing: Being dependent on foreign fossil fuel is not good for our economy, it's not good for our security, and it's not good for our climate," the Democratic governor told The Associated Press in a telephone interview. "We have to be bold."