Characteristics of UK Consumers' Willingness to Pay for Green Energy

Abstract:     
Using a national survey of the UK population this paper explores demographic, attitudinal and behavioural characteristics of UK consumers who have stated a willingness to pay a premium for green energy. Using a number of ordered probit models it is found that willing consumers tend to have higher income, are better informed with respect to energy matters, show concern for the environment and believe individual actions can make a difference to environmental decay. More generally, attitudinal variables provide the greatest explanatory power, while behavioural variables performed poorly. These results are consistent with the findings of recent North American studies and represent an addition to previous research on the subject in the UK. It is concluded that, if policy makers and utility marketeers want a role for consumers in funding new renewable investment, individuals need to be persuaded that, not only action is necessary, but also that others are partaking and that this critical mass is making a difference.

Keywords: willingness to pay, renewables, green marketing, energy policy

JEL Classifications: L94, Q42, Q48, Q20

Working Paper Series