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Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies

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  • Scarpa, Riccardo
  • Willis, Ken

Abstract

This paper documents the policy context of renewable energy production in the European Union. The research adopts a choice experiment approach to investigate households' WTP for these renewable energy technologies in the UK. The micro-generation technologies comprise solar photovoltaic, micro-wind, solar thermal, heat pumps, and biomass boilers and pellet stoves. The study compares the results from conditional and mixed logit models, which estimate the distribution of utility coefficients and then derives WTP values as a ratio of the attribute coefficient to the price coefficient, with a model in which the WTP distribution is estimated directly from utility in the money space. The results suggest that whilst renewable energy adoption is significantly valued by households, this value is not sufficiently large, for the vast majority of households, to cover the higher capital costs of micro-generation energy technologies.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:129-136
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