IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v88y2015icp168-179.html
   My bibliography  Save this article

Public preferences for electricity contracts including renewable energy: A marketing analysis with choice experiments

Author

Listed:
  • Vecchiato, Daniel
  • Tempesta, Tiziano

Abstract

This study aims to understand people's preferences concerning different energy sources with a particular focus on renewables. Households' preferences were assessed by means of a choice experiment on a sample of people living in Veneto (north eastern Italy). The analysis considered real marketing scenarios, presenting different choice options inspired by real market offers by different companies on the Italian market. The energy packages were differentiated considering the monthly price, the source of the energy package (solar, biomass from agriculture and biomass from forestry), the size of the power plants, the minimum distance from houses, and, for biomass only, the certification of the origin. According to our results, there is a wide market for expanding “green” electricity contracts: 86% of the respondents stated that they are willing to pay more for them. People prefer electricity produced from photovoltaics, followed by forest biomass and by agricultural biomass. According to our results, the possibility to choose the renewable energy source matters: the willingness to pay for photovoltaic is 3.4 times that for forest biomass and 5.4 times that for agricultural biomass.

Suggested Citation

  • Vecchiato, Daniel & Tempesta, Tiziano, 2015. "Public preferences for electricity contracts including renewable energy: A marketing analysis with choice experiments," Energy, Elsevier, vol. 88(C), pages 168-179.
    • Handle: RePEc:eee:energy:v:88:y:2015:i:c:p:168-179
    DOI: 10.1016/j.energy.2015.04.036
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544215004909
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2015.04.036?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    2. Westerberg, Vanja & Jacobsen, Jette Bredahl & Lifran, Robert, 2013. "The case for offshore wind farms, artificial reefs and sustainable tourism in the French mediterranean," Tourism Management, Elsevier, vol. 34(C), pages 172-183.
    3. Landry, Craig E. & Allen, Tom & Cherry, Todd & Whitehead, John C., 2012. "Wind turbines and coastal recreation demand," Resource and Energy Economics, Elsevier, vol. 34(1), pages 93-111.
    4. Grösche, Peter & Schröder, Carsten, 2011. "Eliciting public support for greening the electricity mix using random parameter techniques," Energy Economics, Elsevier, vol. 33(2), pages 363-370, March.
    5. Dimitropoulos, Alexandros & Kontoleon, Andreas, 2009. "Assessing the determinants of local acceptability of wind-farm investment: A choice experiment in the Greek Aegean Islands," Energy Policy, Elsevier, vol. 37(5), pages 1842-1854, May.
    6. Andrew D. Krueger & George R. Parsons & Jeremy Firestone, 2011. "Valuing the Visual Disamenity of Offshore Wind Projects at Varying Distances from the Shore: An Application on the Delaware Shoreline," Working Papers 11-04, University of Delaware, Department of Economics.
    7. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    8. Strazzera, Elisabetta & Mura, Marina & Contu, Davide, 2012. "Combining choice experiments with psychometric scales to assess the social acceptability of wind energy projects: A latent class approach," Energy Policy, Elsevier, vol. 48(C), pages 334-347.
    9. van der Schoor, Tineke & Scholtens, Bert, 2015. "Power to the people: Local community initiatives and the transition to sustainable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 666-675.
    10. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
    11. Kataria, Mitesh, 2009. "Willingness to pay for environmental improvements in hydropower regulated rivers," Energy Economics, Elsevier, vol. 31(1), pages 69-76, January.
    12. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    13. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
    14. Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
    15. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
    16. Andrew D. Krueger & George R. Parsons & Jeremy Firestone, 2011. "Valuing the Visual Disamenity of Offshore Wind Power Projects at Varying Distances from the Shore: An Application on the Delaware Shoreline," Land Economics, University of Wisconsin Press, vol. 87(2), pages 268-283.
    17. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    18. Komarek, Timothy M. & Lupi, Frank & Kaplowitz, Michael D., 2011. "Valuing energy policy attributes for environmental management: Choice experiment evidence from a research institution," Energy Policy, Elsevier, vol. 39(9), pages 5105-5115, September.
    19. Ståle Navrud & Kirsten Grønvik Bråten, 2007. "Consumers' Preferences for Green and Brown Electricity : a Choice Modelling Approach," Revue d'économie politique, Dalloz, vol. 117(5), pages 795-811.
    20. Bergmann, Ariel & Colombo, Sergio & Hanley, Nick, 2008. "Rural versus urban preferences for renewable energy developments," Ecological Economics, Elsevier, vol. 65(3), pages 616-625, April.
    21. Menegaki, Angeliki, 2008. "Valuation for renewable energy: A comparative review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(9), pages 2422-2437, December.
    22. Meyerhoff, Jürgen & Ohl, Cornelia & Hartje, Volkmar, 2010. "Landscape externalities from onshore wind power," Energy Policy, Elsevier, vol. 38(1), pages 82-92, January.
    23. Lee, Joo-Suk & Yoo, Seung-Hoon, 2009. "Measuring the environmental costs of tidal power plant construction: A choice experiment study," Energy Policy, Elsevier, vol. 37(12), pages 5069-5074, December.
    24. Manzano-Agugliaro, F. & Alcayde, A. & Montoya, F.G. & Zapata-Sierra, A. & Gil, C., 2013. "Scientific production of renewable energies worldwide: An overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 134-143.
    25. Ladenburg, Jacob & Dubgaard, Alex, 2007. "Willingness to pay for reduced visual disamenities from offshore wind farms in Denmark," Energy Policy, Elsevier, vol. 35(8), pages 4059-4071, August.
    26. van der Horst, Dan, 2007. "NIMBY or not? Exploring the relevance of location and the politics of voiced opinions in renewable energy siting controversies," Energy Policy, Elsevier, vol. 35(5), pages 2705-2714, May.
    27. Wustenhagen, Rolf & Wolsink, Maarten & Burer, Mary Jean, 2007. "Social acceptance of renewable energy innovation: An introduction to the concept," Energy Policy, Elsevier, vol. 35(5), pages 2683-2691, May.
    28. Menegaki, Angeliki N., 2012. "A social marketing mix for renewable energy in Europe based on consumer stated preference surveys," Renewable Energy, Elsevier, vol. 39(1), pages 30-39.
    29. Andrew A. Goett & Kathleen Hudson & Kenneth E. Train, 2000. "Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-28.
    30. Cambero, Claudia & Sowlati, Taraneh, 2014. "Assessment and optimization of forest biomass supply chains from economic, social and environmental perspectives – A review of literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 62-73.
    31. Louviere, Jordan J., 1991. "Experimental choice analysis: Introduction and overview," Journal of Business Research, Elsevier, vol. 23(4), pages 291-297, December.
    32. Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
    33. Painuly, J.P, 2001. "Barriers to renewable energy penetration; a framework for analysis," Renewable Energy, Elsevier, vol. 24(1), pages 73-89.
    34. Loureiro, Maria L. & Umberger, Wendy J., 2007. "A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety, country-of-origin labeling and traceability," Food Policy, Elsevier, vol. 32(4), pages 496-514, August.
    35. Carlos E. Carpio & Olga Isengildina-Massa, 2009. "Consumer willingness to pay for locally grown products: the case of South Carolina," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 412-426.
    36. Ku, Se-Ju & Yoo, Seung-Hoon, 2010. "Willingness to pay for renewable energy investment in Korea: A choice experiment study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(8), pages 2196-2201, October.
    37. Susaeta, Andres & Lal, Pankaj & Alavalapati, Janaki & Mercer, Evan, 2011. "Random preferences towards bioenergy environmental externalities: A case study of woody biomass based electricity in the Southern United States," Energy Economics, Elsevier, vol. 33(6), pages 1111-1118.
    38. Cicia, Gianni & Cembalo, Luigi & Del Giudice, Teresa & Palladino, Andrea, 2012. "Fossil energy versus nuclear, wind, solar and agricultural biomass: Insights from an Italian national survey," Energy Policy, Elsevier, vol. 42(C), pages 59-66.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cerdá, Emilio & López-Otero, Xiral & Quiroga, Sonia & Soliño, Mario, 2024. "Willingness to pay for renewables: Insights from a meta-analysis of choice experiments," Energy Economics, Elsevier, vol. 130(C).
    2. Brennan, Noreen & Van Rensburg, Thomas M, 2016. "Wind farm externalities and public preferences for community consultation in Ireland: A discrete choice experiments approach," Energy Policy, Elsevier, vol. 94(C), pages 355-365.
    3. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    4. 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.
    5. Langer, Katharina & Decker, Thomas & Roosen, Jutta & Menrad, Klaus, 2016. "A qualitative analysis to understand the acceptance of wind energy in Bavaria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 248-259.
    6. Mattmann, Matteo & Logar, Ivana & Brouwer, Roy, 2016. "Wind power externalities: A meta-analysis," Ecological Economics, Elsevier, vol. 127(C), pages 23-36.
    7. Simona Bigerna & Paolo Polinori, 2015. "Assessing the Determinants of Renewable Electricity Acceptance Integrating Meta-Analysis Regression and a Local Comprehensive Survey," Sustainability, MDPI, vol. 7(9), pages 1-24, August.
    8. Strazzera, Elisabetta & Mura, Marina & Contu, Davide, 2012. "Combining choice experiments with psychometric scales to assess the social acceptability of wind energy projects: A latent class approach," Energy Policy, Elsevier, vol. 48(C), pages 334-347.
    9. Ladenburg, Jacob & Lutzeyer, Sanja, 2012. "The economics of visual disamenity reductions of offshore wind farms—Review and suggestions from an emerging field," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6793-6802.
    10. 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.
    11. Caporale, Diana & De Lucia, Caterina, 2015. "Social acceptance of on-shore wind energy in Apulia Region (Southern Italy)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1378-1390.
    12. Ladenburg, Jacob, 2014. "Dynamic properties of the preferences for renewable energy sources – A wind power experience-based approach," Energy, Elsevier, vol. 76(C), pages 542-551.
    13. Anders Dugstad & Kristine M. Grimsrud & Gorm Kipperberg & Henrik Lindhjem & Ståle Navrud, 2021. "Scope Elasticity of Willingness to pay in Discrete Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(1), pages 21-57, September.
    14. Anders Dugstad & Kristine Grimsrud & Gorm Kipperberg & Henrik Lindhjem & Ståle Navrud, 2020. "Scope elasticity and economic significance in discrete choice experiments," Discussion Papers 942, Statistics Norway, Research Department.
    15. Soliño, Mario & Farizo, Begoña A. & Vázquez, María X. & Prada, Albino, 2012. "Generating electricity with forest biomass: Consistency and payment timeframe effects in choice experiments," Energy Policy, Elsevier, vol. 41(C), pages 798-806.
    16. Ladenburg, Jacob & Möller, Bernd, 2011. "Attitude and acceptance of offshore wind farms—The influence of travel time and wind farm attributes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4223-4235.
    17. Christian A. Oberst & Reinhard Madlener, 2015. "Prosumer Preferences Regarding the Adoption of Micro†Generation Technologies: Empirical Evidence for German Homeowners," Working Papers 2015.07, International Network for Economic Research - INFER.
    18. Peri, Erez & Becker, Nir & Tal, Alon, 2020. "What really undermines public acceptance of wind turbines? A choice experiment analysis in Israel," Land Use Policy, Elsevier, vol. 99(C).
    19. Cardella, Eric & Ewing, Bradley T. & Williams, Ryan B., 2017. "Price volatility and residential electricity decisions: Experimental evidence on the convergence of energy generating source," Energy Economics, Elsevier, vol. 62(C), pages 428-437.
    20. Lauren Knapp & Jacob Ladenburg, 2015. "How Spatial Relationships Influence Economic Preferences for Wind Power—A Review," Energies, MDPI, vol. 8(6), pages 1-25, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:88:y:2015:i:c:p:168-179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.