Natural Gas Price Pass-Through in the Sustainable Energy Transition: Wind and Solar Penetration and Sectoral Asymmetries in U.S. Retail Electricity Prices

Greater wind and solar penetration can strengthen the initial pass-through of falling natural gas prices while reducing long-run fuel price exposure. Using a monthly panel of the 48 contiguous U.S. states from 2008 to 2024, this study estimates sectoral dynamic error-correction models with directional short-run gas price changes, interactions with installed wind and solar capacity, and economic controls. Joint parameter draws and Driscoll–Kraay covariance estimates aggregated by calendar month assess price sensitivity and differences between residential and industrial users. Residential electricity prices adjust more slowly, with a dominant-mode half-life of 5.74 months compared with 2.55 months for industry. Following a 10% gas price decline, the immediate residential decline is 0.872% at a 30% renewable share, and the absolute sectoral response gap narrows by 0.138 percentage points (29.9%) when the share rises from 5% to 30%. The corresponding long-run gas price elasticities fall from 0.1182 to 0.0689 and from 0.2090 to 0.1361, respectively (41.7% and 34.9%). Timely transmission of cost reductions can therefore coexist with lower long-run fuel dependence. By expressing sustainability through measurable differences in price sensitivity and adjustment, these findings inform electricity regulation and the timing of consumer benefits during the energy transition, with implications for policies addressing energy poverty.