Decarbonization Policy, Markets & Equity
Paper Session
Monday, Jan. 4, 2027 8:00 AM - 10:00 AM (EST)
- Chair: Alberto Lamadrid, Lehigh University
Do Ownership Transfers Improve Operating Efficiency? Evidence from U.S. Onshore Wind and Utility-Scale Solar, 2005--2023
Abstract
This paper investigates whether ownership transfers through mergers and acquisitions improve operating efficiency at U.S. onshore wind and utility-scale solar facilities. While prior literature documents efficiency gains from ownership changes in conventional generation, causal evidence for weather-dependent renewable assets remains limited. We examine the hypothesis that a "productivity channel" exists where new owners optimize production rather than merely harvesting tax attributes. We construct a monthly plant-level panel from 2005 to 2023 by merging EIA data with high-resolution ERA5 reanalysis meteorology to measure precise resource availability. The sample covers the near-universe of utility-scale facilities, comprising roughly 591,000 observations across 7,200 facilities.To isolate the ownership effect from weather-driven fluctuations, we estimate dynamic treatment effects using staggered difference-in-differences. Our models incorporate year-month fixed effects, flexible meteorological controls, and time-varying facility characteristics—including plant age and regional identifiers—to account for technology depreciation and location-specific shocks. Preliminary results find that ownership transfers are associated with positive effects on operating efficiency. For wind, we find robust evidence of increased utilization. For solar, we find some early effects that are highly sensitive to specification and estimator choice; a null effect remains plausible as specifications are finalized. These findings suggest a productivity dividend where acquisitions extract more clean generation from existing capital, a result directly relevant for policy discussions regarding tax credit transferability and the long-term cost of the energy transition.
Energy Price Shocks and Dynamic Firm Investment in Energy and Carbon Intensity
Abstract
How do firms adjust investment in response to energy price shocks, and what are the implications for energy and carbon intensity? This paper studies U.S. firm-level investment facing energy price shocks and provides new evidence on the investment channel linking external shocks to firm performance. While prior work emphasizes the role of energy price on firm investment at the macro level, we develop and estimate a structural framework from energy price to energy and carbon intensity using establishment-level micro data.First, the article explores the theoretical background of firms’ investment decisions under external energy price shocks using recursive dynamic models. Second, the empirical analysis combines establishment-level data on manufacturing plants from the 2014, 2018, and 2022 Manufacturing Energy Consumption Survey with firm-level information from the 2023 Annual Business Survey. Identification exploits plausibly exogenous state-level variation in energy price shocks across time. We complement the reduced-form analysis with a recursive dynamic model of firm investment.
Results show that higher energy prices induce an increase in investment in energy-efficient technologies, leading to significant reductions in firm-level energy and carbon intensity. The effects are stronger for energy-intensive firms, and persistent high energy prices, manifest in greater impacts on carbon intensity. Counterfactual simulations indicate that investment subsidies tied to energy price shocks amplify capital reallocation toward cleaner technologies and improve efficiency relative to untargeted policies.
These findings highlight the importance of policy implementation in firm-level investment responses and provide micro-founded evidence on the role of energy price on firm investment and state-level economic growth.
Wired for Water: Climate Change and Electricity Use for Irrigation
Abstract
We present the first empirical estimates of how agricultural electricity demand for irrigation in the U.S. responds to rising temperatures, distinguishing between short-run and long-run responses. We then assess the groundwater implications of climate adaptation. Using administrative records from Rural Electric Cooperatives matched to high-resolution climate data, we find that an additional hot day (> 30C) increases electricity use per irrigation customer by 0.77% in the short run. In the long run, the effect grows to 2.01%, reflecting greater responsiveness to sustained warming. We find no conclusive evidence that measured irrigation capital responds to temperature in the long run, even though long-run intensive responses are large and robust. Within a conceptual framework that separates irrigation infrastructure from other forms of adaptation, this pattern suggests that unobserved adaptation capital, such as crop choice or production practices, may be important. We estimate that the increase in hot days over 1992–2019 raised annual electricity expenditures by about $800 per irrigation customer on average. To assess the water-use implications of these findings, we combine groundwater depth data and irrigation water-use estimates from the USGS. We find that the temperature response of electricity use is not driven solely by deeper pumping and that hotter temperatures are associated with increased groundwater withdrawals, particularly in the long run. These results suggest that heat-driven increases in irrigation electricity demand reflect, in part, increased reliance on groundwater extraction.The Combined Effects of Housing and Policy on Energy Poverty
Abstract
Energy poverty is a widespread quality-of-life and social equity issue, and the United States is no exception. Existing economic research on housing and energy poverty tends to focus at the household scale, overlooking the characteristics of the surrounding area and the role of relevant policies. This study takes a comprehensive approach by examining household utility disconnections at the ZIP code level alongside housing attributes, regional characteristics, and related policies to assess the combined effects of housing on energy poverty. California and Illinois are selected as study sites because both states provide long-run household disconnection data, allowing for a comparison of energy poverty patterns between colder and warmer climates. Then identifies housing attributes and regional characteristics relevant to energy poverty. LLMs are used to extract keywords from housing quality regulations and energy assistance programs enacted at the federal, state, and county levels, and a weighted scoring approach is applied to quantify each policy's influence. Fixed-effects models and instrumental variables are then employed to estimate the combined and causal effects of housing attributes, regional characteristics, and housing policies on energy poverty. Finally, heterogeneity analysis is conducted to examine how local governments' administrative capacity shapes policy effectiveness. This research advances the theoretical understanding of housing and policy determinants of energy poverty. The findings help more accurately identify areas most in need of intervention, evaluate the effectiveness of different policies in alleviating energy poverty, and support the design of tailored policy combinations that strengthen administrative capacity and achieve broader reductions in local energy poverty.Discussant(s)
Casey Rozowski
,
University of Wisconsin-Eau Claire
Yagmur Menzilcioglu
,
Duke University
Dilek Uz
,
University of Nevada-Reno
Zheyu Zhang
,
University of Maryland-College Park
Minsu Kim
,
Pennsylvania State University
JEL Classifications
- Q4 - Energy
- Q5 - Environmental Economics