How Effective Are Non-targeted Policies in Accelerating Clean Energy Infrastructure Deployment Under Changing Federal Policy Priorities?

• In Event: Advances in clean energy under federal policy shifts: dynamic pricing, supply chains and non-targeted incentives

Abstract

Targeted clean energy subsidies, which restrict eligibility to specific technologies or sectors, are often vulnerable to political disruption. This challenge is especially salient as federal policy authority contracts and state-level variation in clean energy policy grows in importance. These dynamics raise the question of whether non-targeted incentives can sustain infrastructure deployment under policy uncertainty. This study addresses that question by examining the Opportunity Zone (OZ) program as a key case of a non-targeted investment incentive without technology or sector restrictions. The OZ program is a federal tax incentive for investment in economically distressed areas, and its permanent codification under the 2025 One Big Beautiful Bill Act (OBBBA) coincided with the accelerated phaseout of targeted solar, wind, and EV credits. Because designation was based on a state-level nomination process within a predefined pool of eligible tracts, the program generates plausibly exogenous variation in investment incentives across otherwise comparable locations. While prior research on OZ impacts has primarily focused on real estate, only a limited number of legal and policy studies have examined energy infrastructure, leaving its effects empirically unresolved. 

Using a matched sample of designated and eligible-but-not-designated census tracts, we employ a difference-in-differences event study design that exploits the 2018 OZ designation to compare clean energy infrastructure deployment across the two groups from 2014 to 2025. We focus on EV charging as the primary outcome because charging stations are the most prevalent type of alternative fueling infrastructure, are place-specific investments tied to local financing conditions (and thus sensitive to the cost-of-capital channel), and exhibit network externalities central to our spillover hypotheses. We also examine other alternative fueling stations, solar, wind, and energy-intensive infrastructure to assess generalizability. We find that OZ-designated tracts have 35.0% more EV charging stations than matched control tracts seven years after designation. The effect is larger in areas without active state-level EV charging incentives, consistent with substitution rather than complementarity between targeted and non-targeted policy instruments. However, effects vary considerably across states, reflecting substantial policy heterogeneity. We also find evidence of spatial displacement, with designated tracts gaining energy infrastructure at the expense of adjacent low-income, non-designated communities. Taken together, these findings suggest that non-targeted incentives can partially substitute for targeted clean energy policies, with important implications for the post-OBBBA policy landscape and for understanding how state policy variation shapes distributional outcomes.

Author

• Yifan Liu, Harvard University
  Presenting Author