Commercial wind energy installations and local economic development: Evidence from U.S. counties

Abstract

We examine the impact of wind energy installation on the local economies of counties in the United States. Using data on the universe of commercial wind energy installations from 1995 to 2018, we find that wind energy installation led to economically meaningful increases in county GDP per-capita, income per-capita, median household income, and median home values. We also find evidence that while wind energy installation has little effect on total employment, the composition of local employment shifts away from farm towards non-farm employment, notably leading to an increase in construction and manufacturing employment. Finally, we show that the impact of wind energy installation on local economic development varies significantly by installed capacity and by county urban/rural status. For policymakers, our results have three important implications: (1) wind energy increases the size of the local economy and increases local incomes, but it does not stop population decline; (2) the size of these benefits increase at an increasing rate with the amount of installed generating capacity per-capita; and (3) rural communities with multiple installations and a greater amount of wind energy capacity benefit the most economically from these installations.