Price Sensitivity for Green Power in Electricity Markets: Results From a Conjoint Analysis and a Representative Survey in Switzerland

Traditionally, households have purchased all of their electricity from one single local or regional energy supplier and this is still largely the case in the Swiss market. Across Europe, many electricity customers are gaining the ability to switch their power providers and are also able to choose their own mix of electricity products and price schemes. Market liberalization in Switzerland has been rejected in several public votes and it appears that the Swiss parliament now favors a step-wise liberalization over the coming years. In anticipation of potential pending market liberalization, over the past decade many utility providers have launched appropriate marketing programs. Two main routes were followed: the launch of customer retention programs and the launch of new products in the area of green energy. Customer retention programs are designed to avoid switching behavior and product choices aim at improving provider’s image perception and consumer education. The latter two would again result in customer retention. Pricing is considered to be central for most electricity managers, but is not yet used as a marketing instrument. Some managers anticipate a price war once markets have been liberalized.