Many studies on energy generation have focused on large-scale systems. But as the search for alternative sources of clean energy becomes imperative, there is the need to examine how local governments leverage their authority on land use to permit small-scale energy facilities. This study examines various factors shaping policy adoption on distributed renewable energy generation through the lens of transaction-cost politics. It deviates from existing land-use perspectives, which usually highlight competition between traditional land-use forces to capture the gains from policy. Policy adoption here implies that actors in their exchanges have been able to identify and reduce the transaction costs that would otherwise have prevented citizens from harvesting renewable energy at their place of residence. These actors minimize transaction costs by making use of the transaction resources available to them in the political market. These resources could ease barriers to political contracting and enable actors to shape policy. They include green firms, network memberships, dedicated staff for the sustainability effort, forms of government, and educated populace, which the study found significant in shaping the adoption of zoning codes that permit distributed renewable energy generation.