Willingness to Pay for Renewable Energy

Abstract

Increasing renewable energy footprints now features prominently in the clean energy transition plan for many countries. Consumer’s Willingness To Pay (WTP) for renewable energy is an important variable in this plan. A concept-centric review of 70 research articles conducted in this study reveals that first and most commonly, consumer’s willingness to pay for renewable energy indicates the social acceptance of renewable energy, quantifying the extent of public financial support for meeting nationally set renewable energy targets. Second, it reflects the preferred attributes of renewable electricity supply in deregulated retail electricity markets. And third, it mirrors the non use values of renewable energy sources. A concept augmented matrix presented in the paper helps understand the most popular valuation techniques used to quantify WTP estimates in included studies. This paper concludes by presenting policy enablers to accelerate renewable energy transition in developing economies - where the transition is still in nascent stages.

Strategic Analysis of the Renewable Electricity Transition: Power to the World without Carbon Emissions?

“…Consumers' willingness to pay [52,63,64] 4% Willingness to pay for renewables is a measure of social acceptance for the maximum price that a consumer will pay.…”

“…Social acceptance of renewable electricity is gauged by consumers' willingness to pay (WTP) for renewable energy. Paying for renewable electricity supply in deregulated retail electricity markets accounts for renewable energy sources' use and nonuse values [52,63,64]. A review of 70 research articles by Sen [63] reveals that consumers' willingness to pay for renewable energy helps quantify the extent of public financial support for meeting nationally set renewable energy targets.…”

“…Paying for renewable electricity supply in deregulated retail electricity markets accounts for renewable energy sources' use and nonuse values [52,63,64]. A review of 70 research articles by Sen [63] reveals that consumers' willingness to pay for renewable energy helps quantify the extent of public financial support for meeting nationally set renewable energy targets. Social acceptance of renewable electricity can be triggered by the participation of the regional community in organizational and development processes or even through co-ownership.…”

“…Renewable electricity promises more equitable energy that can serve the many needs of people and reduce the threat of global warming if renewables replace fossil fuels [52,63,64]. For energy security, access to renewable energy needs to meet the "4 A's", namely, availability, accessibility, affordability, and acceptability.…”