Research
Job Market Paper
Who Pays, Who Adopts? Efficiency and Equity of Residential Solar Policy
This paper studies the equilibrium outcomes of alternative residential solar subsidies within a nested discrete choice framework. Households endogenously determine whether to adopt solar photovoltaic and how much capacity to install, implying intensive effects of the policies. Furthermore, households respond heterogeneously to subsidies: switching from a subsidy based on future production to one that reduces upfront installation costs shifts solar photovoltaics adoption toward lower-income households, suggesting the feasibility of policy differentiation. The method of raising subsidy also shapes distributional outcomes, and no single subsidy can achieve both efficiency and equity objectives. These findings highlight the importance of careful subsidy policy design.
Selected Conferences: IAEE International 2025, EEA (August, 2025), IAEE ASSA (Jan, 2026).
Papers in Progress
Flexibility in Power System: Market Design Matters, with Bert Willems
The growing share of renewable energy requires sufficient investment in power system flexibility. In this paper, we frame a three-stage peak-load pricing model consisting of investment, commitment, and production, considering that electricity generation is costly to adjust on short notice. The results demonstrate the importance of increasing time granularity in electricity markets with efficient state-contingent prices. Adapting the idea of real options theory that waiting is valuable, flexible firms avoid producing in the low-demand state and earn a premium to recoup investment costs. On top of that, this paper discusses the efficiency of alternative market designs in the investment of flexible assets. In the absence of an efficient real-time market, day-ahead forward price results in under-investment in flexible technologies and over-investment in inflexible ones. This distortion, in theory, can be corrected by a time-varying options market with technology-specific payment while any centralized auction fails to achieve optimum. Finally, this work briefly illustrates the effect of demand flexibility, showing that an increase in demand response does not necessarily reduce the reliance on production flexibility if rationing is done randomly.
Selected Conferences: AIEE 2021, YEEES 2022, EEA 2023, CEEM PhD Conference 2023, CEA 2024.
Electricity Forward Premium: Renewable Integration and Skewness Preference, with Ronald Huisman and Bert Willems
This paper presents new components that explain the risk premium priced in electricity forward and futures contracts. These components relate to the inclusion of renewable power sources in electricity markets. We build upon the equilibrium pricing model presented by Bessembinder and Lemmon (2002), which comes from a time wherein intermittent renewable power supply was negligible. We extend their framework by including intermittent supply from zero marginal costs renewable power sources such as wind and solar and by assuming that agents consider mean-variance-skewness preferences instead of mean-variance only. Beyond variance and skewness of wholesale spot prices as components found before, we show that components that relate to the covariance and coskewness between renewable supply and spot prices explain the power forward risk premium as well. We find empirical evidence that these new components are statistically significant and improve the explanatory power of empirical regressions. Our results suggest the importance of considering the asymmetry of renewable supply shocks in explaining electricity forward premiums.
Selected Conferences: Conference on Climate and Energy Finance 2023, FMA International 2025.
Reading Groups
Env.Climate Reading Group, co-organized with Hulai Zhang, Lishu Zhang, and Shengyu Li.
This weekly reading group discusses academic papers across topics including but not limited to Environmental and Energy Economics, as well as Sustainable Finance. Feel free to reach out to any of the organizers if you are interested.