Willingness to Pay for Electricity from Renewable ... · to help ensure the loyalty of their...

NREL/TP.550.26148July 1999

Willingness to Pay for Electricity fromRenewable Resources: A Review of UtilityMarket Research

Barbara C. Farhar, Ph.D., National Renewable Energy Laboratory

National Renewable Energy LaboratoryA national laboratory of the U.S. Department of Energy

The Topical Issues Brief series is sponsored by DOE’s Office of Energy Efficiency and Renewable Energy Office of Power Technologies

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Willingness to Pay for Renewable Energy • iii

Contents

Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Attitudes toward Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Knowledge of Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Stated Likelihood of Voluntarily Paying for Electricity from Renewable Resources . . . . . . . . . . 2Stated Willingness to Pay More for Renewable Electricity by Residential Customers . . . . . . . . . 2An Aggregated Residential Customer Willingness-to-Pay Curve . . . . . . . . . . . . . . . . . . . . . . . . . 2Preferences for Rate Basing versus Green Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Willingness to Pay for Power from Renewables in Competitive Markets . . . . . . . . . . . . . . . . . . . 4Attitudes toward Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

National Poll Data and Other Recent Market Research Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Attitudes toward and Knowledge of Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Willingness to Pay More for Electricity from Renewable Sources . . . . . . . . . . . . . . . . . . . . . . . . 4Rate Basing versus Green Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Attitudes toward Utility Companies as Suppliers of Electricity from Renewable Sources . . . . . . 5

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Appendix A: Data on Attitudes toward and Knowledge of Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Attitudes toward Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Knowledge of Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Appendix B: Data on Customer Interest in Paying More for Electricity from Renewable Sources . . . . . 10

Stated Likelihood of Paying More for Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Stated Willingness to Pay More for Electricity from Renewable Sources by Residential Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Specific Renewables Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Wind Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Geothermal Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Biomass Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Rooftop PV Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Solar-for-Schools Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Preferences for Rate Basing versus Green Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

• Willingness to Pay for Renewable Energyiv

Appendix C: Data on Willingness to Pay for Power from Renewable Sources ina Competitive Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Appendix D: Data on Consumer Attitudes toward Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Tables

Table A-1 Preferences among Energy Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Table A-2 Preferences among Fuel Sources for Use by Utility as One Source of Electricity . . . . . . . . . 8Table A-3 Favorability toward Various Renewables Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Table B-1 Likelihood of Paying More in Monthly Bill to Support Energy Generated from

Renewable Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Table B-2 Likelihood of PV System Purchase with Higher or the Same Monthly Electric Bill . . . . . . 10Table B-3 Likelihood of Voluntarily Paying for Electricity from Renewable Sources . . . . . . . . . . . . . 10Table D-1 Importance of Green-Power Provider Attributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figures

Figure 1 Aggregated Willingness-to-Pay Curve (Residential Customers) . . . . . . . . . . . . . . . . . . . . . . 3Figure B-1 Incremental Bimonthly Amounts Commercial Customers Are Voluntarily Willing

to Pay for Electricity from Renewable Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Figure B-2 Incremental Bimonthly Amounts Respondents Are Voluntarily Willing

to Pay to Support New Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Figure B-3 Incremental Monthly Amounts Respondents Are Voluntarily Willing

to Pay for Electricity from Renewable Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Figure B-4 Incremental Monthly Amounts Respondents Are Voluntarily Willing

to Pay for Solar and Wind Power before and after Deliberation on Electricity Issues . . . . . 13Figure B-5 Incremental Monthly Amounts Respondents Are Voluntarily Willing

to Pay for Electricity Generation from Renewables (Averaged Data from Three Surveys before and after Deliberation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Figure B-6 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay for Solar, Wind, and Geothermal Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure B-7 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay for Wind Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure B-8 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay for Geothermal Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure B-9 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay for Electricity from Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure B-10 Incremental Amounts Respondents Are Voluntarily Willing to Pay for Home-Based Rooftop PV System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure B-11 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay on Electric Bills for a Rooftop PV System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure B-12 Incremental Monthly Amounts Respondents Are Voluntarily Willing to Pay for a Solar-for-Schools Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Figure C-1 Willingness to Pay for Electricity from Renewable Sources by Forgoing DifferentPrice Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Figure C-2 Willingness to Subscribe to Product with Different Levels of Environmentally Friendly Electricity at Various Price Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Willingness to Pay for Renewable Energy • v

Abstract

As competition in the electric utilityindustry becomes more widespread, utilities arebecoming concerned about actions they can taketo help ensure the loyalty of their customers.National polls have, for 20 years, found majoritypreferences for renewable energy over otherenergy sources. This issue brief compiles andanalyzes recent market research conducted byutility companies on customer interest in, andwillingness to pay for, electricity from renewablesources. Increasingly, market research isdocumenting in utility service territories the samewidespread preference for renewables that hasbeen found in national polls for the past 20 years.

Findings in this review show that:

C Customers favor renewable sources ofelectricity but may know little about them.Percentages favorable toward renewablesincrease when customers are educated aboutoptions. Solar and wind are the most favoredsources of electricity generation.

C Majorities of 52% to 95% of residentialcustomers say they are willing to pay at leasta modest amount more per month on theirelectric bills for power from renewablesources. Deliberative polls show thatwillingness to pay increases when customersare educated about utility energy options.

C Willingness to pay follows a predictablepattern with an average majority of 70%willing to pay at least $5 per month more forelectricity from renewable sources, 38%willing to pay at least $10 per month more,and 21% willing to pay at least $15 permonth more. It is likely that any utilitymarket survey asking residential customersabout willingness to pay more for renewableenergy will exhibit a similar pattern ofresults.

C A limited amount of data suggest thatcustomers may be even more likely to paymore for electricity from renewable sourcesin a competitive market setting. That is,customers may respond in greater numberswhen the choice is between forgoing ratedecreases— as would be expected incompetitive markets—than when faced withpaying more, as is the case with utility green-pricing programs.

C Customers may view with favor and remainloyal to utilities that provide power fromrenewable sources.

• Willingness to Pay for Renewable Energyvi

Acknowledgments

This study was sponsored by the Officeof Power Technologies, Office of EnergyEfficiency and Renewable Energy, U.S.Department of Energy (DOE). The author wouldlike to thank the utility companies that providedstudies to the National Renewable EnergyLaboratory (NREL) collection of utility marketresearch.

The author would also like to thank thefollowing reviewers, who provided many helpfulcomments and suggestions: Joseph Galdo, DOE;Larry Goldstein, NREL; Blair Swezey, NREL;Bill Babiuch, NREL; Eldon Boes, NREL;

Timothy Coburn, Abilene Christian University;Nancy Collins, Q Associates; Ed Holt, Ed Holt4

and Associates; Rudd Mayer, LAW Fund; Terry Peterson, Electric Power ResearchInstitute; John Reed, TECMrkt Works; Adam Serchuk, Renewable Energy PolicyProject; Suzette Tucker-Welch, New CenturyEnergy; and Ryan Wiser, Lawrence BerkeleyNational Laboratory. Timothy Coburn and DavidLillie, User Interface Services, assisted indeveloping the willingness-to-pay curve. Specialthanks are also expressed to Kyra Epstein foreditorial assistance and Irene Medina and KayVernon for word-processing support.

Willingness to Pay for Renewable Energy • 1

Willingness to Pay for Electricity from Renewable Sources:A Review of Utility Market Research

Approach

This issue brief compiles and analyzesrecent market research conducted by utilitycompanies on customer interest in andwillingness to pay for electricity from renewablesources. The National Renewable EnergyLaboratory (NREL) has obtained the results ofmarket research studies on green pricing fromseveral electric utility companies. To honor theproprietary nature of the data, identities of theutilities conducting the studies have not beenprovided. The data come from 14 differentsurveys conducted in 12 utility service territoriesin five Western/Southwestern states. Most of thedata were collected in 1995 through 1997. Inaddition, the study incorporates results from a1997 Electric Power Research Institute (EPRI)study (EPRI 1997).

The analysis focuses on the results fromquantitative surveys rather than on focus groupfindings, since quantitative data collection wasoften built on focus group results and took thefocus group findings further to enablegeneralizations about entire populations. Use ofsurvey data makes the comparison of resultsamong studies more straightforward.

In addition, the analysis was limited onlyto data from surveys that appeared to meet “bestpractice.” Data were collected for utilitycompanies by professional market research firms.The surveys used scientific procedures to sampleutility customers, and results had estimatedmargins of error of ± 5% or better. In addition,only questions that were, in our opinion, of highquality, relatively objective, and unbiased wereincluded. Because the questions themselves areconsidered proprietary, they are not includedhere.

The studies provided far moreinformation than could be reviewed in this shortpaper; therefore, the analytical focus was limited

to three topics of widespread interest to the utilityindustry. These were: (1) attitudes toward andknowledge of renewables, (2) customer interestin paying more for electricity from renewablesources (including stated willingness to pay morefor electricity from renewable sources andpreferences for paying for renewables in the ratebase versus on a voluntary basis), and(3) consumer attitudes toward utility companiesas suppliers of power from renewable sources.Of these three topics, most of the questions askedwere about willingness to pay for electricity fromrenewable sources. For purposes of thissynthesis, findings from questions on like topics,although not worded identically, are groupedtogether.

This paper presents a summary of keyfindings; detailed data are presented in theappendixes. The aggregation of utility marketresearch data on willingness to pay is discussed.We also include some related findings from otherrecently reported market research.

Key Findings

Attitudes toward Renewables. Manysurveys have documented, both nationally andlocally, the longstanding preference among U.S.adults and electricity customers for renewableenergy over other energy sources. Utility marketsurveys asking about attitudes toward renewablesfound the same strong preferences for renewableenergy to produce electricity when comparedwith other energy sources, as has beendocumented in national poll data (Farhar 1993,1996). Data detailing these findings are reportedin Appendix A.

Knowledge of Renewables. Althoughconsumers are favorable toward renewables, theymay not know very much about renewableenergy technologies. Utility findings onconsumer favorability toward and knowledge ofrenewables are sparse. Most of the utility

• Willingness to Pay for Renewable Energy2

surveys reviewed did not query customers ontheir familiarity with renewable energytechnologies. Customers, as a whole, are likely tobe relatively unfamiliar with green power and areunlikely to know anyone who has participated ina green-power program. The few data that doexist suggest that participants in green-pricingprograms tend to be more informed thancustomers in general, and that solar and wind arethe best known renewable energy technologies. Appendix A presents the detailed findings.

Stated Likelihood of VoluntarilyPaying for Electricity from RenewableSources. The data reviewed suggest thatapproximately half or more of respondentssurveyed state that they are “somewhat likely” or“very likely” to voluntarily pay more forelectricity from renewable sources when price isnot mentioned. A sizable minority of samples (~ 45%) tend to indicate that they would beunlikely to voluntarily pay anything more forelectricity from renewable sources, when thequestion is asked in this way. Two samples of1

commercial customers also expressed likelihoodof paying a limited amount more for renewablepower. Appendix B presents the data.

Stated Willingness to Pay More forRenewable Electricity by ResidentialCustomers. Across the surveys reviewed,majorities of respondents say they are willing topay at least a modest amount more per month ontheir electric bills for power from renewable

sources. The sizes of these majorities range from52% to 95% of total residential customersamples without exposure to special educationalprograms. Percentages increase when customersreceive more information. Appendix B presentsthe detailed information.

An Aggregated Residential CustomerWillingness-to-Pay Curve. The similarities infindings on willingness to pay (WTP) forelectricity from renewable sources is striking,and a means was sought to describe this observedpattern. A best-fit curve was developed for ascatterplot of the averaged value of incrementalamounts per month residential respondents statedthat they are willing to pay for various forms ofelectricity from renewable sources (Figure 1).2

The curve is based only on responses fromresidential customers. It includes 95 data pointsfrom 12 survey questions. 3

Figure 1 presents data on thepercentages of survey respondents indicatingthey are willing to pay nothing more and thosewilling to pay increasing amounts more. Aswould be expected, the percentage of thosewilling to pay more drops off as the priceincreases. An average of 70% are likely to state

When survey questions take a form similar1

to: “If paying for renewable electricity were offeredon a voluntary basis, how likely would you be to paymore money on a monthly basis to get some or all ofyour electricity from renewables?”, and no dollaramount is given, sizable minorities tend to respondthat they are unlikely to pay more. However, whensurvey questions take a form similar to: “How muchmore would you choose to pay on your electric billeach month to ensure that some or all of yourelectricity comes from renewable sources?”, anddollar amounts are given—usually $1, $2, $3, $5, and so on—only about 25% of respondents indicate theyare unwilling to pay anything more when they see themodest amounts involved.

The curve represents an exponential fit to2

the data. This “best-fit” curve (in terms ofmaximizing R ) was obtained using nonlinear2

regression with the Y-intercept set at 100%. Thescatter of response values around the average valuesdepicted in the curve is most likely a function ofvariation in question wording, question placement,and the dollar values used in response categories.

Data on WTP for grid-tied rooftop3

photovoltaic (PV) systems were omitted because theamounts involved are much higher than the amountsmentioned in most surveys on green-pricingprograms. Bimonthly dollar amounts were halved tomake them comparable to the monthly dollar amountsused in most questions. Only “pre” data fromdeliberative polls were included so that data would becomparable with that from random samples of utilitycustomers. Also, some WTP questions were broad innature and did not include questions on varyingpricing structures.

0

20

40

60

80

100

0 15 30 45 60

Incremental Monthly Amount (in dollars)

Cu

mu

lati

ve P

erce

nt

of

Res

po

nd

ents


The equation for the curve is:Y= 100e -.104*M

where Y = cumulative percentage of respondents, and M = $ more per month.R = .762

Figure 1. Aggregated Willingness-to-Pay Curve(Residential Customers)

that they will pay at least $5 per month more. Anaverage of 38% of customers are likely to statethey will pay at least $10 more. An average of21% are likely to state that they would pay $15per month more.

Although these figures represent animportant market potential, they should not beconstrued as the proportion of residentialcustomers who will actually sign up for a green-power product offering at inception. In addition,this curve could change over time as thepopulation gains more experience with green-power programs.

Given the coverage of the research, it islikely that any utility market survey asking

residential customers about WTP for power fromrenewable sources will obtain results similar tothose represented by the curve. Development of acurve on actual participation in green-pricingprograms must await the collection of systematicdata on participation rates over time.

Preferences for Rate Basing versusGreen Pricing. Virtually all questions in thisreview focused exclusively on a utility green-pricing option. The one question addressingcustomer preference for distributing the costs ofnew renewables development across the entirecustomer population showed that customersstrongly preferred “rate basing.” Detailedinformation is presented in Appendix B.


Willingness to Pay for Power fromRenewables in Competitive Markets. Twoquestions asked utility customers about theirwillingness to forgo price decreases incompetitive utility markets to pay for electricityfrom renewable sources. The few data availableshow that even higher majorities of customersmay be willing to forgo price decreases to pay forenvironmentally friendly electricity than arewilling to voluntarily pay more on their electricbills. Appendix C presents detailed data.

Attitudes toward Utilities. Mostresidential customers in these samples rate theirutilities favorably. Majorities of utilitycustomers want their utility companies todevelop new renewable sources of electricity.Findings suggest that those most satisfied withtheir utility company are also most supportive ofadding new renewables to the power mix. Also,participants in green-pricing programs aresignificantly more loyal to their utility companythan are other customers. Detailed findings arepresented in Appendix D.

National Poll Data and Other RecentMarket Research Findings

Findings from the utility market researchsynthesized here are consistent with otherreported research, including national poll dataand company-specific market research. Someexamples of these findings are briefly providedbelow.

Attitudes toward and Knowledge ofRenewables. In a review of market research onrenewables and conservation in the PacificNorthwest, Ferguson (1999) found that strongmajorities of electricity customers in theNorthwest support renewable energy. Fergusonconcluded that Northwest consumers viewconservation and renewables as beingenvironmentally important.

Consumers continue to select renewablesover other energy sources in response toquestions asking for their preferences amongconventional and renewable energy options. For

example, a 1998 poll of Colorado homeownersfound that the electricity sources perceived asleast environmentally threatening—solar andwind—are also the most preferred (Farhar andCoburn 1999a). In addition to theirenvironmental benefits, solar and wind arepreferred over other electricity sources for otherpositive attributes, such as safety, economicbenefits, self-reliance, and diversity of the U.S.energy supply. Similar findings from a nationalsample are reported in Farhar and Houston(1996).

A 1997 Portland General Electric studyfound 41% of residential customers selectingsolar over all other energy sources to meet thefuture electric needs of the region (cited inFerguson 1999). These findings are consistentwith results from national polls (Farhar 1996).

Combined results of surveys ofprobability samples from four Midwestern statesshowed that 90% of customers believe theirutilities should use solar and 85% believe theyshould use wind to produce power (Tarnai andMoore 1998). Eighty-nine percent favored moreuse of renewables.

The 1998 Colorado homeowners surveyfound that although most respondents werefavorable toward grid-tied photovoltaics (PV)(with 59% giving it high favorability ratings),only 10% were familiar with it. Malerespondents and those in higher-incomehouseholds tended to be more familiar with grid-tied PV than others, but they were still not veryfamiliar (Farhar and Coburn 1999b).

Willingness to Pay More forElectricity from Renewable Sources. Farharand Houston (1996) reported that 57% to 80% ofnational poll samples said they were willing topay more for elecricity produced in a cleaner wayor from sources less harmful to the environment.The 1998 survey of Colorado homeowners foundthat, when asked specific amounts, 76% ofrespondents indicated a willingness to pay atleast $1 per month more for electricity fromrenewable sources (Farhar and Coburn 1999a).


Combined data from the poll of adults infour Midwestern states (Tarnai and Moore 1998)showed that 72% indicated they are “verywilling” or “somewhat willing” to pay more forrenewables. The modal amounts respondentswere willing to pay were $5 per month (30%)and $10 per month (28%).

Rate Basing versus Green Pricing. The Colorado homeowners survey shows broad-based support for renewables development evenif it costs more (Farhar and Coburn 1999a).Homeowners prefer to see the costs ofdeveloping renewables shared broadly, eitherthrough federal subsidies for electricitygeneration using renewables or through modestincreases in electric rates.

Ferguson (1999) reported that SeattleCity Light customers preferred that the cost ofrenewables should be put in everyone’s rates,rather than through green-pricing programs inwhich customers can choose to participate, aresult also obtained by other Northwest utilitymarket research.

The surveys of four midwestern states(Tarnai and Moore 1998) found that 30%preferred that everyone’s electric rates should beincreased to pay for renewables, 29% preferredvoluntary choice, and 19% preferred that thefederal government pay additional costs. Twentypercent proposed some other way.

Attitudes toward Utility Companies asSuppliers of Electricity from RenewableSources. Ferguson (1999) found that consumersconsistently report they are more likely toidentify with utilities that supportenvironmentally sound management practices.

The Colorado survey of homeownersfound that widespread support exists for utilitiesto develop renewables as part of their electricity-generating mix (Farhar and Coburn 1999a). Colorado utilities seem to have a relatively goodreputation with their customers. Mosthomeowners want their utilities to do more toinvest in the development of renewable sourcesof electricity.

Conclusions

C Customers favor renewable energy sourcesbut tend to know very little about them.

C Utility market research studies showcustomer preference for renewable sourcesof electricity along with majority willingnessto pay an incremental amount more for it.Across the studies examined, majorities of52% to 95% said they were willing to pay atleast a modest amount more per month ontheir electric bills for power from renewablesources. Deliberative polls show thatcustomer WTP increases when customers areeducated about utility energy options.

C Across all studies, customer WTP follows apredictable pattern. An average of 70%stated WTP at least $5 per month forelectricity from renewable sources. Thepercentages decline as the amount per monthincreases. An average of 38% of customerssay they are willing to pay at least $10 permonth more, and 21% say they are willing topay at least $15 per month more for powerfrom renewable sources. It is likely that anyutility market survey asking residentialelectricity customers about WTP forrenewables will exhibit a similar pattern ofresults.

C Proprietary utility market research findingstrack closely with findings from similarquestions from national polls and marketresearch in the public domain.

C A limited amount of data show thatcustomers are just as likely to pay more forrenewable energy in a competitive marketsetting. In fact, customers may respond ingreater numbers when the choice is betweenforgoing rate decreases in order to receiverenewable energy in competitive marketsthan when faced with paying more for thisoption, as is the case in utility green-pricingprograms.


C Although most studies focused on residentialcustomers, there is limited evidence thatsome business customers will pay more forgreen power. These data, coupled withactual market experience with businessesvoluntarily choosing green poweroptions—such as Toyota, Patagonia, and theNew Belgium Brewing Company—suggestthat business customers could be animportant market segment for renewables. Business customers might be interested inknowing about the extent of interest inelectricity from renewable sources amongresidential customers, because this interestcould translate into consumer approval forbusinesses that purchase electricity fromrenewable sources.

C Although almost all of the surveys focusedexclusively on a utility green-pricing type ofoption, the fact that large majorities ofrespondents are willing to pay at least asmall, incremental amount for renewableenergy suggests a potential willingness toaccept slightly higher rates in order tocapture the public benefits of greaterrenewable energy use.

C Customer attitudes are more favorabletoward utilities that include renewables intheir electricity generation mix. However, theevidence is insufficient to determine whethercustomers who trust their utilities more aremore willing than others to sign up forgreen-power programs.


References

Note: Utility studies are not identified because of the proprietary nature of the questions and findings.

Electric Power Research Institute (EPRI). 1997. Green Power Guidelines, Volume 1: AssessingResidential Market Segments. TR-109192-V1. Palo Alto, CA: Electric Power Research Institute.

Farhar, Barbara C. 1993. Trends in Public Perceptions and Preferences on Energy and EnvironmentalPolicy. NREL/TP-461-4857. Golden, CO: National Renewable Energy Laboratory. February. 376 pp.

Farhar, Barbara C. 1996. Energy and the Environment: The Public View. REPP Issue Brief, No. 3. CollegePark, MD: University of Maryland. 20 pp. http://www.repp.org.

Farhar, Barbara C. and Timothy C. Coburn. 1999a. Colorado Homeowner Preferences on Energy andEnvironmental Policy. NREL/TP-550-25285. Golden, CO: National Renewable Energy Laboratory. June. 45 pp.

Farhar, Barbara C. and Timothy C. Coburn. Forthcoming 1999b. A Market Assessment of ResidentialGrid-Tied PV Systems in Colorado. NREL/TP-25283. Golden, CO: National Renewable EnergyLaboratory. In Press.

Farhar, Barbara C. and Ashley H. Houston. 1996. Willingness to Pay for Electricity from RenewableEnergy. NREL/TP-460-21216. Golden, CO: National Renewable Energy Laboratory. September.26 pp.

Ferguson, Edward G. 1999. “Renewable Resources and Conservation: What Consumers Want.” Portland,OR: Bonneville Power Administration. 35 pp.

Tarnai, John and Danna L. Moore. 1998. “Regional Capability Building—Utility Restructuring Survey.” Data Report 98-40, Social and Economic Sciences Research Center. Pullman, WA: Washington StateUniversity. November.


Appendix A: Data on Attitudes toward and Knowledge of Renewables

Attitudes toward Renewables

Utility market surveys asking aboutattitudes toward renewables found the samestrong preferences for renewable energy toproduce electricity when compared with otherenergy sources, as has been documented innational poll data (Farhar 1993, 1996).

Table A-1 shows the results from aquestion asking customers about theirfavorability or opposition toward various energyresources, assuming that they had a choice as tothe source of their electrical energy.

Another question resulted in a similarpattern of preferences when it asked whetherresidential and commercial customers want theirutility to use a variety of energy sources.Customers strongly support their utility’s use ofnew renewables, defined as electricity generatedby solar, wind, geothermal, and landfill gassources. Of residential customers, 88% say theirutility should include new renewables as one oftheir sources of electricity. Support forhydropower is similarly high. A majoritysupports the use of natural gas to generateelectricity, while fewer support nuclear powerand coal. Table A-2 shows the results.

Table A-2. Preferences among Fuel Sourcesfor Use by Utility as One Source of Electricity

Residential%

Commercial%

New renewables 88 89

Hydropower 85 91

Natural gas 55 64

Nuclear 39 52

Coal 14 22

More evidence for this pattern ofpreferring renewable sources came from aquestion asking customers about theirpreferences for purchasing electricity from coal,nuclear, natural gas, or wind and solar. Findingsshow that 41% say they would choose electricityfrom wind and solar, 35% from natural gas, 9%from nuclear energy, and 5% from coal; 10%don’t know.

Table A-1. Preferences among Energy Resources

Energy Resource

Somewhat orstrongly favor

%

Somewhat orstrongly oppose

%

Don’t know

% Totals

Solar 93 5 2 100Wind 91 9 -- 100Natural gas 83 11 6 100Geothermal 71 13 16 100Landfill gas 64 18 18 100Forest waste 59 29 12 100Nuclear 31 63 6 100Coal 24 69 7 100


Another question asked respondentsabout favorability toward specific renewableenergy sources and also about their top threechoices for their utility company to develop.Overwhelming majorities choose wind, PV onhomes, geothermal, and PV on schools, and amajority also choose biomass energy. Among thetop three choices for development, wind ispreferred by two-thirds, followed by PV onhomes (64%), and geothermal (63%). PV onpublic buildings is preferred by a 58% majority.Biomass is selected as a top three choice by 26%.Table A-3 shows the findings.

Table A-3. Favorability toward VariousRenewables Options

Renewableresource

Percent"very

favorable"

Percent choosingin top 3 preferred

renewableenergy choices

PV on publicbuilding

69 58

Geothermal 64 63

Wind 61 69

PV on homes 60 64

Biomass 32 26

Results from another question showfavorability toward the idea of utility investmentin renewable energy among the customer groupssurveyed. On a 1-10 scale, where 1 is low and 10is high favorability, the mean score forparticipants in a green-power program is 9.1 and,for all other customers, 6.3.

Findings show that, among customergroups surveyed, most agree that their utilitycompany should provide power from sources thatminimize negative environmental impacts (meanscores ranging from 7.7 to 9.2 on a 1-10 scale).Similarly, most agree that the utility shouldprotect the environment as much as possiblewhile producing and distributing power (meanscores ranging from 8.2 to 8.6 on a 1-10 scale).

Knowledge of Renewables

Only a few of the utility surveysreviewed included questions on awareness andknowledge of renewables. One question showedthat commercial customers are slightly moreaware of electricity from renewable energysources than residential customers. The mostwell-known new renewable energy sources aresolar and wind power, of which most customersare aware. Landfill gas and geothermal sourceshave the lowest awareness levels (between halfand three-quarters aware). Not surprisingly,almost all commercial and residential customershave heard of hydropower. Another questionproduced results showing that, although 84%have heard of using solar panels to produceelectricity, lack of knowledge is commonly citedas a reason for not installing them.

Another question was asked of a sampleof subscribers to a green-power program,interested nonsubscribers (those who hadinquired about the program, but did notsubscribe), and other utility customers. Three-quarters of subscribers, 53% of interestednonsubscribers, and 37% of other customers saythey are familiar with the term “green energy.”Despite the program having been in existence for1½ years, 21% of subscribers, 45% of interestednonsubscribers, and 61% of other customers arenot familiar with the term “green energy.” Thisparticular survey found that knowledge aboutwind power and green energy is significantlygreater among program subscribers than amongthe other two groups.


Appendix B: Data on Customer Interest in Paying More forElectricity from Renewable Sources

Stated Likelihood of Paying More forRenewables

Many residential and commercialcustomers respond that they are likely to paymore for renewables. In one study, 54% ofresidential customers say they are “very likely”or “somewhat likely” to pay more on theirmonthly electric bill for electricity fromrenewable sources; 45% say they are unlikely todo so (Table B-1).

Table B-1. Likelihood of Paying More inMonthly Bill to Support Energy Generated

from Renewable Resources

Response %

Very likely 13

Somewhat likely 41

Not likely 45

Unsure 1

Total 100

Another question asked aboutpurchasing a residential, grid-tied PV system.When asked directly how likely they would be topurchase a PV system if the cost of the loanpayment plus their new, reduced electric billcombined would remain the same, 21% ofcustomers say they are “very likely” to purchasea PV system, 42% say they are “somewhatlikely,” 33% say they are “not likely” to do so,and 4% don’t know.

In response to a different question, 38%say they would be likely to purchase a PV systemif their monthly bill were higher than it currentlyis. Table B-2 shows the responses.

Results from another question asked ofboth residential and commercial customersindicate that the likelihood of voluntarily paying

Table B-2. Likelihood of PV System Purchasewith Higher or the Same

Monthly Electric Bill

Response %

Yes 38

No, but would if bill remained the same 32

No, but would purchase at lower price 12

Would not purchase at all 6

Unsure 12

Total 100

more for electricity from renewable sources isrelatively high. Two-thirds of residentialcustomers and 61% of commercial customers saythey are at least somewhat likely to pay more forelectricity from renewable energy sources on avoluntary basis. Table B-3 shows the statedlikelihood among both residential andcommercial customers.

In response to another question, bothresidential and commercial customers (62% and65%, respectively) agree that using new renewable energy is “the responsible thing to dofor the future, even if it costs more now.” Farfewer residential and commercial customers

Table B-3. Likelihood of Voluntarily PayingMore for Electricity from Renewable Sources

ResponseResidential

%Commercial

%

Very likely 16 21

Somewhat likely 51 40

Not very likely 17 21

Not at all likely 14 14

Don’t know 3 3

Total 101a 99a

Percentages do not add to 100 due to rounding.a


(29% and 27%, respectively) think thatmaintaining current rates as long as possible isimportant, even if it means using fossil fuels.

Although commercial and industrialcustomers were rarely included in the utilitymarket research reviewed, available data providemodest evidence that at least some of thesecustomers might be interested in power fromrenewable sources. In one study, a majority(53%) of industrial respondents say they areunwilling to pay a higher price for “greener”electricity resources. However, 41% say they are1

willing to pay 5% or more for greener electricityresources, and 6% say they are willing to paymore than 10% more.

A question from another study showedthat 62% of commercial customers are willing topay at least $1 more every other month forelectricity from renewable sources; 57% arewilling to pay at least $3 more; and 52% arewilling to pay at least $5 more every othermonth. However, only 11% are willing to paymore than $10 more every other month. Thirty-eight percent of respondents to this question areunwilling to pay anything more (Figure B-1).

Although not numerous, theseresults—along with anecdotal evidence aboutlarge businesses such as Toyota, Patagonia, andNew Belgium Brewing Company selecting agreen-power option in a competitive market—suggest that commercial, and possibly industrial,customers are worth further investigation as apotential green-power market segment. Inaddition, these customers would probably beinterested in information on the extent of interestin electricity from renewable sources amongresidential customers. This interest could

Figure B-1. Incremental Bimonthly AmountsCommercial Customers Are VoluntarilyWilling to Pay for Electricity from RenewableSources2,3

translate into a higher public approval ofcompanies purchasing power from renewableenergy sources.

The survey included respondents from 131

different SIC codes, including printing andpublishing, electronic and other equipment, and othermanufacturing. However, only 17 respondentsanswered this question on renewable sources ofelectricity.

There was insufficient information to2

determine the percentage responding $0 and thepercentage responding “Don’t know.”

Where data on WTP for electricity from3

renewable sources are presented, the percentages ofrespondents willing to pay higher amounts is added tothe percentage willing to pay lower amounts to showa cumulative percentage of respondents willing to payat least a stated amount. This is based on theassumption that those willing to pay a higheramount—say, $25 a month more—would be willingto pay lower amounts—say, $10 a month more—forpower from renewable energy sources.

Figure B-1 and many of the charts thatfollow display WTP responses as cumulative percentages. For example, in Figure B-1, 62% ofrespondents indicate that they would be willing to payat least $1 bimonthly for electricity from renewablesources. The cumulative curve is drawn to 100% at0% to indicate that, in this case, some additionalnumber of respondents that answered "zero" mayhave, if asked, been willing pay some amountbetween zero and $1.


Stated Willingness to Pay More forElectricity from Renewable Sourcesby Residential Customers

No matter how the question was phrased,a large percentage of residential customers—inall surveys a majority—stated that they arewilling to pay at least something more on theirelectricity bills for electricity from renewablesources. Among most of the surveys analyzedhere, majorities of respondents are willing to payat least $5 a month more for power fromrenewable energy sources.

In response to one question, 57% saythey are willing to pay 5% or more forenvironmentally sound electricity, and 15% saythey are willing to pay 10% or more. Stated WTPvaried by income but did not vary by electricityconsumption. If a rebate were offered, 70% saythey would be willing to pay for moreenvironmentally friendly electricity sources.

Another result shows that respondentstend to support the option of paying “greenrates.” On the whole, respondents say they would“somewhat favor” paying a premium of 5% forelectricity generated from renewable resources.On a four-point scale, where 1 represents“strongly favor” and 4 “strongly oppose,” themean value is 1.83. The average favorabilitytoward paying a 20% premium is in theambivalent range (mean = 2.36).

Response to another question shows thattwo-thirds of residential customers state that theyare willing to pay at least $1 more every othermonth for electricity from renewable sources;58% are willing to pay $3 every other month;and 52% are willing to pay at least $5 everyother month. Seven percent said they are willingto pay more than $10 more every two months forelectricity from renewable energy sources(Figure B-2).

Another question asked respondentswhether they favor inceasing their electric bill by$1 a month so that solar and wind power wouldbe produced in their area. Three-quarters of

respondents say they favor such an increase; 21%oppose it; 2% are mixed; and 2% don't know.

Response to a different question showsthat 95% of individuals in the sample say theyare willing to pay at least $3 more per month ontheir electric bills for electricity from renewablesources (Figure B-3).

Figure B-2. Incremental Bimonthly AmountsRespondents Are Voluntarily Willing to Payto Support New Renewable Energy4

Figure B-3. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Electricity from Renewable Sources

There was insufficient information to determine the4

percentage responding $0 and the percentageresponding “Don’t know.”


Three surveys looked at customer WTPthrough an innovative polling technique called “deliberative polling.” Using this technique, asample of electricity customers comes togetherand completes a questionnaire prior to spendinga weekend discussing electricity issues. The customers receive relatively unbiasedpresentations by energy experts and participate infacilitated discussions, termed a “deliberation.”The sample then completes an identicalquestionnaire at the end of the weekend.

A question in one such deliberative pollquestionnaire asked about WTP for electricitygeneration using wind and solar power. Prior toparticipating in deliberation, 52% of respondentssaid they would be willing to pay $1-$5 more permonth for solar and wind power. After thedeliberation, 77% said they would be willing topay that amount. The percentage unwilling topay anything dropped from 38% prior todeliberation to 18% afterwards. The percentageof respondents willing to pay more than $20 amonth more did not appear to change as a resultof the deliberation. Clearly, exposure to moreinformation about electricity issues increasedparticipants’ WTP modest amounts for powerfrom renewable energy sources (Figure B-4).

Pre: $0 = 38% Don't know = 10%Post: $0 = 17% Don't know = 6%

Figure B-4. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Solar and Wind Power before and afterDeliberation on Electricity Issues

Similar questions were asked in otherdeliberative polls, each of which used the samedata collection instrument. On average, prior todeliberation, 56% of the combined customersamples say that they would pay at least $1 amonth more for electricity generation usingtechnologies such as wind and solar, andapproximately one-third say that they would payat least $10 a month more. After deliberation, thepercentage willing to pay at least $1 a monthmore increased to 85%, while the percentagewilling to pay at least $10 a month moreremained at almost one-third. (Figure B-5 showsthe averaged percentages for the three surveys.)

Figure B-5. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Electricity Generation from Renewables(Averaged Data from Three Surveys beforeand after Deliberation)

Specific Renewable Sources

For specific renewable resources,responses follow a pattern similar to thatgenerated from electricity from renewable energysources in general. In response to one question,61% of respondents say they are willing to payup to $2 per month more for solar, wind, andgeothermal development; 54% say they wouldpay from $2 to $5 per month more; and 15% saythey would pay from $15 to $25 per month more.Twenty-eight percent say they are unwilling topay more (Figure B-6). These results representthe general trend pertaining to all renewables.


$0 = 28%; Don't know = 11%

Figure B-6. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Solar, Wind, and GeothermalDevelopment

Wind Power. Another question askedspecifically about wind power. Sixty-five percentsay they are willing to pay at least $6 per monthmore, and 26% say they would pay more than$18 a month more on their electricity bills forwind power (Figure B-7).

$0 = 31%; Some other amount = 4%

Figure B-7. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Wind Power

Geothermal Electricity. Anotherquestion examined WTP for geothermalelectricity.

Although 27% are unwilling to payanything more, 71% say they are willing to payat least $4 a month more for geothermalelectricity. Thirty-six percent are willing to paymore than $12 a month more (Figure B-8).


Figure B-8. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Geothermal Electricity

Biomass Electricity. Another questionexamined WTP for biomass electricity. Amajority of 53% are willing to pay at least $4 permonth for electricity from biomass; 21% say theywould pay more than $12 a month more.However, 45% say they are unwilling to payanything more for biomass electricity, the highestpercentage unwilling to pay among the surveysin this body of findings (Figure B-9).

Rooftop PV Systems. One questionasked customers about WTP for a PV system attheir home that they would own and that wouldreduce the amount of purchased power. Nearly60% of respondents say they would be willing topay at least $25 per month for such a PV system;38% say they would be willing to pay at least$50 more; and 15% say they would be willing topay at least $100 a month more for a PV systemat their homes (Figure B-10).


at their homes (Figure B-10).

$0 = 45%; Don't know = 2%

Figure B-9. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Electricity from Biomass


Figure B-10. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor Home-Based Rooftop PV System

In response to another question,respondents indicate a preference for rooftop PVsystems that supply all of their electricity needs.Of those answering a question about whetherthey prefer a system supplying 50% or 100% oftheir electricity needs, 53% say they prefer thelarger system and 26% say they prefer thesmaller one; 21% don’t know.

Regarding financing for the PV system,46% say they prefer a long-term loan, 36% ashort-term loan, and 18% are unsure.

Survey data were also collected from ageneral residential customer sample, and usingthe same instrument, from existing contributorsto a green-pricing program, asking how muchrespondents would be willing to pay in acombined electric bill for a PV system installedon their roof that they would own. Mostrespondents in the general sample (82%) arewilling to pay as much as $3 per month more forsuch a system, although it was not possible todiscern how many people said “nothing more”because the data were not shown separately forthat response. Eighty-two percent say they arewilling to pay at least $3 a month more for a PVsystem. Nearly one-third say they would bewilling to pay $20 per month more, and 13% saythey are willing to pay $25 per month more.Participants in a green-pricing program are likelyto indicate even higher amounts, with 93%stating they are willing to pay at least $3 more ontheir electric bill for a rooftop PV system theywould own (Figure B-11).

Figure B-11. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payon Electric Bills for a Rooftop PV System


Solar-for-Schools Program. A surveyquestion measured WTP for a PV power systemat a local school. A sizable majority (81%) ofutility customers in the sample say they arewilling to pay at least $3 per month more for aPV-for-schools program; 78% say they arewilling to pay at least $5 per month more; 68%say they would pay at least $10 per month more;and 44% say they would pay even more(Figure B-12).

$0 = 17%; some other amount = 2%

Figure B-12. Incremental Monthly AmountsRespondents Are Voluntarily Willing to Payfor a Solar-for-Schools Program

Preferences for Rate Basing versusGreen Pricing

Only one question addressed the rate-basing versus green-pricing issue. The resultsshowed strong support for spreading the costs ofnew renewables across the entire customer base.When given a choice, respondents asked thisquestion agreed, by nearly four to one, that allhouseholds and businesses that can afford itshould help pay for renewable power, as opposedto only voluntary purchasers. Seventy-fourpercent of the respondents in the residentialsample and 80% of the commercial customersample favored spreading the cost over the ratebase. All the other questions included in thisreview focused exclusively on a utility green-pricing option.


Appendix C: Data on Willingness to Pay for Power fromRenewable Sources in a Competitive Market

Strong majorities of respondentsnationwide also say that they are willing tochoose electricity from renewable sources if theirelectric bills remain the same (EPRI 1997).Another way of measuring WTP is to askcustomers to choose between two offers forelectric service, one comparable to whatcustomers are receiving already except that it is5%, 10%, and 15% lower in price, and one thatensures a supply of power from renewablesources at the price they are currently paying(EPRI 1997). In these scenarios, customerswould be forgoing rate decreases to chooseelectricity from renewable energy sources.

Eighty-four percent of respondentsnationwide say they would be willing to forgo a5% discount in electricity prices to select powerfrom renewable sources. Three-quarters (76%)say they would be willing to forgo a 10%discount in order to select electricity fromrenewable sources, and 71% say they would bewilling to forgo a 15% discount to purchaseelectricity from renewable sources (Figure C-1).These figures are higher than the usual range ofWTP for power from renewable sources. Thismethod may represent a less “painful” way ofchoosing power from renewable sources byallowing customers to opt for a slightly lower billthan they otherwise would have. This pattern ofresponse may be more representative of acompetitive market situation.

Figure C-1. Willingness to Pay for Electricityfrom Renewable Sources by ForgoingDifferent Price Discounts

Customers were asked about theirinterest in subscribing to different mixes (from10% to 100%) of “environmentally friendly”electricity. Interest was assessed for differentlevels of power from renewable sources at priceincreases ranging from 5% to 25%. More thanthree-quarters of respondents say they are willingto pay at least a 5% premium to obtain all of theirelectricity from green sources, while one-thirdsay they would pay a 25% increment. The patternof responses, illustrated in Figure C-2, bears asimilarity to the WTP curves discussed in theprevious section.


Figure C-2. Willingness to Subscribe to Product with Different Levels of Environmentally Friendly Electricity at Various Price Increases


Appendix D: Data on Consumer Attitudes toward Utilities

A few of the surveys exploredcustomers’ attitudes toward utilities relative tothe use of renewables to generate electricity.Although they do not constitute a strong pattern,the findings suggest that customers will lookmore favorably upon, and would be willing topurchase electricity from, a utility providingpower from renewable sources.

Responses to one survey questionshowed that almost everyone wants the utility todevelop new renewables to avoid resourcedepletion (93%) and because it would be goodfor the environment (91%). Most (84%) disagreewith the statement that it makes no differencehow their utility gets its electricity, and 83% trustthe utility to make good decisions on theselection and development of new powersources.

Results from another survey questionshowed that a majority of these respondents givea generally favorable rating to their utility (64%).A moderate relationship was found betweensatisfaction with the utility and support foradding new renewables. Those giving highestapproval to their utility most strongly supportedthe idea of the utility adding new renewables.Both commercial and residential customersfollow this pattern.

Also, residential customers who give thehighest rating to the utility company’s overallperformance are more likely to say they are “verywilling” to voluntarily pay more for renewablesthan all other respondents. They also are morelikely to trust their utility to make decisions andto care about how their utility gets electricity.This suggests that, among very willingrespondents, there is a higher level of trust in theutility company than among others. Residentialcustomers less willing to pay more forrenewables are twice as likely to say somethingnegative about the utility company than thosewho say they would probably or definitely spend

an additional $5. Negative comments about theutility included high rates and frequent outages.

A different question showed that green-pricing program participants are significantlymore likely than customers at large to assign veryhigh importance to having a utility that gets someof its electricity from green sources (mean scoresof 9.1 and 7.3, respectively, on a 1-10 scale).

Results from still another question foundthat green-pricing program participants aresignificantly more loyal to the utility companythan are customers as a whole. Only 3% ofgreen-pricing participants say they would switchutility companies, and 17% say they mightswitch, compared with 40% of customers as awhole who say they would (16%) or might(24%) switch. In comparison, 34% of allrespondents had switched long-distancetelephone companies in the last year.

Three other survey questions exploredrespondent selection criteria for power providersif there were competition. One of these showedthat 9 in 10 customers would choose as theirelectric company the one who has taken steps toprovide more renewable energy resources. Asecond one showed that 87% of respondents saya “very important” or “somewhat important”factor in choosing their electric provider is ahigher percentage of power from renewablesources than from conventional sources. Ninetypercent of respondents to the question say thatproviding 100% renewables is most importantwhile 85% say the same for clean-burningnatural gas. When asked which company theywould choose (when price is not mentioned),63% of the respondents say they would choosethe company that generates 80% of its powerfrom renewables, 22% say it wouldn’t matter,and 7% don’t know.


Responses to the third question showedthat criteria for selecting a green-power providercenters around price, environmental benefits, andcredentials of the provider (including generalreputation and specific experience with clean,renewable energy). Responses are summarized inTable D-1.

Table D-1. Importance of Green-PowerProvider Attributes

Attributes %

Is trustworthy/reliable 74

Has experience with clean/renewableenergy

64

Experienced/been around a long time 62

Is located in your state 48

Is a company you are familiar with 48

Is a leader in the industry 47

Is your current provider 42

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