Willingness to Pay for Energy Efficiency and Renewable Energy

Approximately 56-80% of respondents to recent national surveys say they would pay a premium for environmental protection or renewable electricity.

People say they care a great deal about the environment and they are beginning to see that energy choices are linked with environmental degradation, but are they willing to put their money where their mouths are? Poll responses on willingness to pay (WTP) indicate attitudes toward environmental protection. Many surveys attempted to go beyond "motherhood" responses to the idea of a clean environment by asking respondents to consider out-of-pocket dollar cost. To protect and improve the environment, majorities in most surveys indicated a willingness to pay more for taxes, gasoline, electricity, other fuels, and automobiles. One survey even found a majority (63%) "willing to accept a lower standard of living if it meant a cleaner environment."14 Most questions focused on institutional rather than behavioral responses to environmental protection: they addressed WTP for actions by government, the oil industry, utility companies, and automobile manufacturers.15

To summarize, approximately 56% to 80% of respondents to recent national surveys say they would pay a premium for environmental protection or renewable electricity. However, a clear distinction should be drawn between results from national opinion polls and local-area market research findings. The national poll data should be interpreted as a long-standing favorable predisposition toward renewables and an indication of potential markets. National evidence suggests that customers will notice and favor environmentally friendly electricity generation, whether they themselves participate in such programs. However, the specific percentages actually willing to participate in a given utility service territory should be defined by local-area market research and experience.

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