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This paper examines the design and effectiveness of place-based industrial policy in renewable energy. We study the Inflation Reduction Act's energy-community tax credits, which offered bonus subsidies to projects located in economically vulnerable, fossil-fuel reliant areas. Reduced form estimates show modest overall changes in interconnection requests in eligible counties but substantial heterogeneity by policy eligibility, region, and technology. We then develop and estimate a structural model of project location choice to evaluate alternative policy designs. Counterfactual simulations quantify key trade-offs between developer surplus, environmental benefits, fiscal spending, and support for vulnerable communities in the design of place-based policies.

Gaurav Doshi is an Assistant Professor in the School of Economics and a faculty affiliate at the Energy Policy and Innovation Center at Georgia Institute of Technology. His research interests include energy and environmental economics, with a focus on studying how energy policies affect firm behavior and the implications for energy transition.