The American Renewable Energy Act of 2026 establishes a federal renewable electricity standard requiring large electricity suppliers to gradually increase their renewable energy sales from 20 percent in 2027 to 70 percent by 2036, with requirements continuing to rise through 2046. The bill defines eligible renewable sources as wind, solar, geothermal, biogas, qualified hydropower, and marine energy, and creates a tradable credit system where generators earn credits for renewable electricity produced that utilities can buy to meet their obligations or face $50-per-megawatt-hour penalty payments. To ensure equitable benefits, the law requires that 15-20 percent of renewable credits come from small-scale distributed generation and projects in low-income communities, environmental justice areas, and coal-affected regions, with these percentages increasing after 2030. The Federal Energy Regulatory Commission must develop national and regional credit trading markets and regulations by January 2027, while the bill preserves states', tribes', and local governments' authority to establish equal or stricter renewable energy standards and their own incentive programs. Penalty payments from non-compliant suppliers are directed to renewable energy, storage, and efficiency projects benefiting disadvantaged communities.