Powering Rural Prosperity: The Local Economic Impact of Utility-Scale Wind and Solar Developments
Abstract
A growing literature documents a relationship between renewable energy development and local economic outcomes. Yet, important gaps remain in understanding how these effects manifest in rural economies, across technologies, and within specific sectors. Using county-level data on U.S. energy installations between 2001-2023, we examine how renewable energy adoption shapes sector-specific economic activity, focusing on GDP, employment, and wages in rural counties. We extend prior work in three ways. First, we focus explicitly on rural outcomes, where utility-scale renewable development is concentrated but where economic structures may limit local benefits. Second, we incorporate solar adoption alongside wind, enabling a comparison of technology-specific impacts. Third, we move beyond aggregate measures to conduct a sectoral analysis, identifying how effects vary across industries. Wind development is associated with significant GDP gains concentrated in the utilities sector, while solar development is associated with modest wage and employment gains driven largely by utilities and construction. For very large utility-scale solar (e.g. 5MW or 20MW) agriculture, construction, and utility GDP increase with solar adoption. Neither technology is associated with detectable declines in agricultural GDP, employment, or wages, providing little evidence of substantial disruption to agricultural production or related labor markets. These findings provide a more nuanced understanding of the local economic consequences of the energy transition and highlight the importance of technology type and sectoral composition in shaping rural development outcomes.
Read the full piece at SSRN.