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Do Flemish Households Value Renewables?

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  • Pepermans, Guido

    () (Hogeschool-Universiteit Brussel (HUB), Belgium)

Abstract

This paper assesses whether and to what extent Flemish households are willing to pay for electricity generated with renewable resources. Via a choice experiment, households were offered the choice between as set of green electricity contracts, characterised by the renewables share in electricity supplied to their dwelling, the renewable generation technology (wind, biomass, PV...) and its impact on the electricity bill. A main effects conditional logit model and a main effects random parameter logit model are estimated. The estimation results show that households prefer ‘green contacts’, but renewables technologies are valued differently. The estimates are then used to assess the marginal willingness to pay by Flemish households for each of the contract attributes. From a policy perspective, the results suggest that a not too small proportion of Flemish households would be willing to switch to another power supply contract if that can be done at limited cost. Moreover, the results suggest that it would not be a good idea to focus on the deployment of one or only a few technologies. Policies resulting in a diversified portfolio of technologies are positively valued by households and will obtain broader support.

Suggested Citation

  • Pepermans, Guido, 2011. "Do Flemish Households Value Renewables?," Working Papers 2011/05, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  • Handle: RePEc:hub:wpecon:201105
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    Citations

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    Cited by:

    1. Taale, Francis & Kyeremeh, Christian, 2015. "Households' willingness to pay for reliable electricity services in Ghana," MPRA Paper 65780, University Library of Munich, Germany.
    2. Rihar, Miha & Hrovatin, Nevenka & Zoric, Jelena, 2015. "Household valuation of smart-home functionalities in Slovenia," Utilities Policy, Elsevier, vol. 33(C), pages 42-53.
    3. Taale, Francis & Kyeremeh, Christian, 2016. "Households׳ willingness to pay for reliable electricity services in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 280-288.
    4. De Valck, Jeremy & Vlaeminck, Pieter & Liekens, Inge & Aertsens, Joris & Chen, Wendy & Vranken, Liesbet, 2012. "The sources of preference heterogeneity for nature restoration scenarios," Working Papers 146522, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.

    More about this item

    Keywords

    choice experiment; renewables; conditional logit model; random parameter logit model; willingness-to-pay;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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