Role of Greener Default Options on Consumer Preferences for Renewable Energy Procurement

Abstract

As options for renewable procurement have proliferated to meet consumer demand, it is more complicated for consumers to navigate the available choices. In addition to installing distributed energy resources (e.g., solar PV), consumers can subscribe to green tariffs. Depending on the electricity supplier, the default amount of renewable content will vary (e.g., Community Choice Aggregation vs. investor-owned utilities). There are also options to purchase greener electricity, up to 100%. It is unclear how this context influence household-level decisions to install solar and vice versa. This study uses a discrete choice experiment to estimate the influence of renewable content, solar PV installation, change in electricity costs, engagement level, and procurement duration on household-level decisions. Data were collected from 600 participants randomly assigned to either a 15% or 30% renewable default option. The results suggest that (1) effort is a relatively minor factor in renewable procurement decisions even when comparing PV adoption versus green electricity, (2) relative perceptions of renewable procurement options increase as the default renewable content increases, and (3) some consumers are more sensitive to the default level and will shift their behavior accordingly. This research may improve program design to encourage adoption of multiple kinds of renewable energy.

Keywords: Renewable Energy, Procurement, Community Choice Aggregation, discrete choice experiment, Latent Class Analysis