Governments worldwide are increasingly adopting Renewable Portfolio Standards (RPS) to pursue net zero carbon emissions. Exploiting their staggered implementation in 32 U.S. states, we find that RPS explain higher yields and lower credit ratings on local debt securities. Consistent with an energy cost channel, RPS explain higher electricity prices and the effects strengthen when states implement particularly aggressive RPS. Effects weaken in areas with abundant renewable energy natural resources and when states introduce “clean energy” targets that permit a wider set of energy sources. Our findings shed light on the economic trade-offs facing policymakers as they administer the energy transition.