Willingness to Pay for Renewable Energy: Evidence From High Wind and Wave Energy Potential Areas

Abstract

The study aims to investigate consumers' willingness to pay for the development of renewable energy to encourage renewable energy consumption in the long run. This study further identifies the factors that influence consumers' willingness to pay for renewable energy. A face-to-face questionnaire, with a contingent valuation method was administered to 672 residential electricity users in the East Coast of Peninsular Malaysia, areas that have high wind and wave energy potentials with large hydropower. The findings show that the average consumers' willingness to pay is about RM 4.90 or about USD 1.18 per month on electricity bills as a contribution to a Renewable Energy Fund. The results further show that the consumers' willingness to pay for renewable energy is significantly influenced by the proposed bid price, income, confidence level and education. The findings may help the government in creating a useful framework to ensure sustainable development in the future.

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

“…Numerous research efforts including those by Azlina et al (2022), Emang et al (2020), Ramli et al (2023), and van Eeden et al (2021) have focused on estimating the financial value of ecological commodities and amenities. These studies however have often overlooked how the characteristics of payment vehicles have impacted individuals' preferences and readiness to make payments.…”

“…Moreover, focusing on the design of payment vehicles will enhance the methodological validation of research and enrich the literature on the economic value of the environment, particularly in the application of coercive and consequential payment in Stated Preference study. A recent study by Azlina et al (2022) evaluated the WTP for renewable energy in Malaysia. Nevertheless, the research employed the contingent valuation approach, which is often susceptible to biases estimation due to issues such as free-riding, and strategic bidding (Frings et al 2023).…”