Determinants of green electricity tariff uptake in the UK

Abstract

A number of countries offer domestic consumers the option of buying their electricity supply through a 'green tariff', whereby the supplier typically guarantees that all or part of the supply has been generated using renewable energy sources. Various studies have sought to identify variables describing and/or predicting why domestic consumers choose to purchase a green tariff. This study builds on previous work by reviewing the UK market in particular. Using data from the Understanding Society Survey (USS), a number of variables were tested for their predictive power. This included variables identified as statistically significant within other studies, and variables that -to the authors' knowledge -have not been tested through other work. Results find that individuals in the highest income quartile, those with higher qualifications, those supporting the Green political party, those exhibiting strong environmental behaviour and those households not in receipt of winter fuel payments were all more likely to have purchased green tariffs. Significant to a lesser degree were strong environmental attitudes and those households with some form of renewable energy technology installed. JEL Codes: Q4, Q5, H4, L94

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“…While links between WTP for green energy and environmental awareness [36][37][38][39][40][41], between WTP and pro-environmental behavior [39,40,[42][43][44] and between WTP and knowledge [38,[44][45][46][47] have been found in previous studies, we judged these to be of a second-order effect and chose to focus on those attributes that could factor directly into marketing campaigns and could most easily be used to guide energy policy.…”

To switch or not to switch? – Understanding German consumers’ willingness to pay for green electricity tariff attributes

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