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Consumers' preference for renewable energy in the southwest USA

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Listed author(s):
  • Mozumder, Pallab
  • Vásquez, William F.
  • Marathe, Achla

Abstract

The southwestern part of the US has abundant supply of renewable energy resources but little is known about the consumers' preferences for renewable energy in this region. This paper investigates households' willingness to pay for a renewable energy program in a southwestern state, New Mexico (NM). Using the contingent valuation method, we provide different scenarios that include provision of 10% and 20% of renewable energy supply, to elicit households' willingness to pay (WTP) for the renewable energy. We estimate the WTP for specific shares of renewable energy in the total energy mix as it is a key factor in affecting the price of the energy portfolio in the market. The survey design also allows us to check the scope sensitivity of renewable energy which can help guide the future renewable energy policy. We hope results from this study will offer useful insights to energy regulators and utility companies and help them increase the share of renewable energy supply.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 6 ()
Pages: 1119-1126

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Handle: RePEc:eee:eneeco:v:33:y:2011:i:6:p:1119-1126
DOI: 10.1016/j.eneco.2011.08.003
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

Keywords: Renewable energy; Contingent valuation; Willingness to pay;

Find related papers by JEL classification:

  • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
  • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
  • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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Cited by:

  1. Contu, Davide & Strazzera, Elisabetta & Mourato, Susana, 2016. "Modeling individual preferences for energy sources: The case of IV generation nuclear energy in Italy," Ecological Economics, Elsevier, vol. 127(C), pages 37-58.
  2. repec:eee:energy:v:128:y:2017:i:c:p:284-290 is not listed on IDEAS
  3. Lee, Chul-Yong & Heo, Hyejin, 2016. "Estimating willingness to pay for renewable energy in South Korea using the contingent valuation method," Energy Policy, Elsevier, vol. 94(C), pages 150-156.
  4. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
  5. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
  6. Thomas Eichner & Rüdiger Pethig, 2015. "Lobbying for and Against Subsidizing Green Energy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 925-947, December.
  7. Hooi Hooi Lean & Russell Smyth, 2012. "Are fluctuations in production of renewable energy permanent or transitory?," Monash Economics Working Papers 05-12, Monash University, Department of Economics.
  8. Lean, Hooi Hooi & Smyth, Russell, 2013. "Are fluctuations in US production of renewable energy permanent or transitory?," Applied Energy, Elsevier, vol. 101(C), pages 483-488.
  9. Menegaki, Angeliki, N. & Olsen, Søren Bøye & Tsagarakis, Konstantinos P., 2016. "Towards a common standard – A reporting checklist for web-based stated preference valuation surveys and a critique for mode surveys," Journal of choice modelling, Elsevier, vol. 18(C), pages 18-50.
  10. Carsten Herbes & Lorenz Braun & Dennis Rube, 2016. "Pricing of Biomethane Products Targeted at Private Households in Germany—Product Attributes and Providers’ Pricing Strategies," Energies, MDPI, Open Access Journal, vol. 9(4), pages 1-15, March.
  11. Tabatabaie, Seyed Mohammad Hossein & Rafiee, Shahin & Keyhani, Alireza & Heidari, Mohammad Davoud, 2013. "Energy use pattern and sensitivity analysis of energy inputs and input costs for pear production in Iran," Renewable Energy, Elsevier, vol. 51(C), pages 7-12.
  12. Maxim Alexandru, 2013. "Methodological Considerations Regarding The Segmentation Of Household Energy Consumers," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1775-1785, July.
  13. Murakami, Kayo & Ida, Takanori & Tanaka, Makoto & Friedman, Lee, 2015. "Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan," Energy Economics, Elsevier, vol. 50(C), pages 178-189.
  14. Guo, Xiurui & Liu, Haifeng & Mao, Xianqiang & Jin, Jianjun & Chen, Dongsheng & Cheng, Shuiyuan, 2014. "Willingness to pay for renewable electricity: A contingent valuation study in Beijing, China," Energy Policy, Elsevier, vol. 68(C), pages 340-347.
  15. Kaenzig, Josef & Heinzle, Stefanie Lena & Wüstenhagen, Rolf, 2013. "Whatever the customer wants, the customer gets? Exploring the gap between consumer preferences and default electricity products in Germany," Energy Policy, Elsevier, vol. 53(C), pages 311-322.
  16. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
  17. repec:eee:enepol:v:107:y:2017:i:c:p:413-424 is not listed on IDEAS
  18. repec:eee:renene:v:112:y:2017:i:c:p:104-112 is not listed on IDEAS
  19. Mattmann, Matteo & Logar, Ivana & Brouwer, Roy, 2016. "Wind power externalities: A meta-analysis," Ecological Economics, Elsevier, vol. 127(C), pages 23-36.
  20. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
  21. Kim, Jihyo & Park, Jooyoung & Kim, Jinsoo & Heo, Eunnyeong, 2013. "Renewable electricity as a differentiated good? The case of the Republic of Korea," Energy Policy, Elsevier, vol. 54(C), pages 327-334.
  22. Arie ten Cate, 2012. "The socially optimal energy transition in a residential neighbourhood in the Netherlands," CPB Discussion Paper 222, CPB Netherlands Bureau for Economic Policy Analysis.
  23. repec:gam:jeners:v:9:y:2016:i:4:p:252:d:66797 is not listed on IDEAS
  24. Chandra Kiran B. Krishnamurthy & Bengt Kriström, 2016. "Determinants of the Price-Premium for Green Energy: Evidence from an OECD Cross-Section," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(2), pages 173-204, June.

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