IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v39y2011i2p544-550.html
   My bibliography  Save this article

Residential consumers in the Cape Peninsula's willingness to pay for premium priced green electricity

Author

Listed:
  • Oliver, Henry
  • Volschenk, Jako
  • Smit, Eon

Abstract

A number of studies have explored the willingness (i.e. stated willingness as opposed to actual willingness) of consumers to pay a premium for green electricity in developed countries. However, little is known about how this translates into an emerging economy context. This study investigates the level of willingness of residential households in South Africa's Cape Peninsula to pay a premium for electricity from renewable energy. It methodologically drew on recent contributions in the literature on norm-motivated behaviour used to identify testable factors that could influence residential consumers' willingness to pay (WTP). Interestingly, the study found a significant positive link between household income and WTP for green electricity, contrary to the findings of some previous studies. Not only are higher income households more likely to pay a premium, but typically they are also willing to pay a bigger premium. It was also further established that the view that green electricity is reliable, involvement in the recycling of waste and the belief that everyone should contribute to green electricity generation drive the WTP.

Suggested Citation

  • Oliver, Henry & Volschenk, Jako & Smit, Eon, 2011. "Residential consumers in the Cape Peninsula's willingness to pay for premium priced green electricity," Energy Policy, Elsevier, vol. 39(2), pages 544-550, February.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:2:p:544-550
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00762-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Wiser, Ryan H., 1998. "Green power marketing: increasing customer demand for renewable energy," Utilities Policy, Elsevier, vol. 7(2), pages 107-119, June.
    2. Arkesteijn, Karlijn & Oerlemans, Leon, 2005. "The early adoption of green power by Dutch households: An empirical exploration of factors influencing the early adoption of green electricity for domestic purposes," Energy Policy, Elsevier, vol. 33(2), pages 183-196, January.
    3. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2006. "Green consumers and public policy: On socially contingent moral motivation," Resource and Energy Economics, Elsevier, vol. 28(4), pages 351-366, November.
    4. Bird, L. & Wüstenhagen, R. & Aabakken, J., 2002. "A review of international green power markets: recent experience, trends, and market drivers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 6(6), pages 513-536, December.
    5. Wiser, Ryan H. & Fowlie, Meredith & Holt, Edward A., 2001. "Public goods and private interests: understanding non-residential demand for green power," Energy Policy, Elsevier, vol. 29(13), pages 1085-1097, November.
    6. Rundle-Thiele, Sharyn & Paladino, Angela & Apostol Jr., Sergio Antonio G., 2008. "Lessons learned from renewable electricity marketing attempts: A case study," Business Horizons, Elsevier, vol. 51(3), pages 181-190.
    7. Salmela, Suvi & Varho, Vilja, 2006. "Consumers in the green electricity market in Finland," Energy Policy, Elsevier, vol. 34(18), pages 3669-3683, December.
    8. Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
    9. Hansla, Andre & Gamble, Amelie & Juliusson, Asgeir & Garling, Tommy, 2008. "Psychological determinants of attitude towards and willingness to pay for green electricity," Energy Policy, Elsevier, vol. 36(2), pages 768-774, February.
    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.
    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. Herbes, Carsten & Ramme, Iris, 2014. "Online marketing of green electricity in Germany—A content analysis of providers’ websites," Energy Policy, Elsevier, vol. 66(C), pages 257-266.
    2. Kundu, Nobinkhor, 2014. "Sustainable energy for Development: Access to finance on renewable energy and energy efficiency technologies for Bangladesh," MPRA Paper 65154, University Library of Munich, Germany, revised 20 Jun 2014.
    3. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    4. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
    5. Mewton, Ross T. & Cacho, Oscar J., 2011. "Green Power voluntary purchases: Price elasticity and policy analysis," Energy Policy, Elsevier, vol. 39(1), pages 377-385, January.
    6. Ritsuko Ozaki, 2011. "Adopting sustainable innovation: what makes consumers sign up to green electricity?," Business Strategy and the Environment, Wiley Blackwell, vol. 20(1), pages 1-17, January.
    7. Calikoglu, Umit & Aydinalp Koksal, Merih, 2022. "Green electricity and Renewable Energy Guarantees of Origin demand analysis for Türkiye," Energy Policy, Elsevier, vol. 170(C).
    8. Torsten J. Gerpott & Ilaha Mahmudova, 2010. "Determinants of price mark‐up tolerance for green electricity – lessons for environmental marketing strategies from a study of residential electricity customers in Germany," Business Strategy and the Environment, Wiley Blackwell, vol. 19(5), pages 304-318, July.
    9. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    10. Motz, Alessandra, 2021. "Consumer acceptance of the energy transition in Switzerland: The role of attitudes explained through a hybrid discrete choice model," Energy Policy, Elsevier, vol. 151(C).
    11. 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.
    12. Litvine, Dorian & Wüstenhagen, Rolf, 2011. "Helping "light green" consumers walk the talk: Results of a behavioural intervention survey in the Swiss electricity market," Ecological Economics, Elsevier, vol. 70(3), pages 462-474, January.
    13. Dagher, Leila & Harajli, Hassan, 2015. "Willingness to pay for green power in an unreliable electricity sector: Part 1. The case of the Lebanese residential sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1634-1642.
    14. 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.
    15. 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.
    16. Dalia Streimikiene & Asta Mikalauskiene, 2014. "Lithuanian Consumer`s Willingness to Pay and Feed-in Prices for Renewable Electricity," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(36), pages 594-594, May.
    17. 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.
    18. Claudy, Marius C. & Michelsen, Claus & O'Driscoll, Aidan, 2011. "The diffusion of microgeneration technologies - assessing the influence of perceived product characteristics on home owners' willingness to pay," Energy Policy, Elsevier, vol. 39(3), pages 1459-1469, March.
    19. Hanimann, Raphael & Vinterbäck, Johan & Mark-Herbert, Cecilia, 2015. "Consumer behavior in renewable electricity: Can branding in accordance with identity signaling increase demand for renewable electricity and strengthen supplier brands?," Energy Policy, Elsevier, vol. 78(C), pages 11-21.
    20. Diaz-Rainey, Ivan & Ashton, John K., 2008. "Stuck between a ROC and a hard place? Barriers to the take up of green energy in the UK," Energy Policy, Elsevier, vol. 36(8), pages 3043-3051, August.

    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:enepol:v:39:y:2011:i:2:p:544-550. 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.elsevier.com/locate/enpol .

    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.