Consumer Preferences for Renewable Energy

Abstract

In the face of the societal meta-topic of climate change, renewable energies promise solutions to the manifold challenges of mostly unsustainable lifestyles. This chapter is concerned with the concept of consumer preferences for renewable energy (RE) and provides an overview of the empirical literature on the matter. The chapter begins with a general discussion of the concept of preferences. It shows what assumption and preconditions must be accepted for individual preferences to unfold a normative character for energy politics and energy marketing that is in line with consumer sovereignty. The existing empirical literature on RE shows that there is a high social acceptance of RE. Beyond a general approval of RE, however, there is little consensus in the literature. This is in part a result of the complexity of the subject of investigation and the heterogeneous methods used in preference elicitation. Yet the core cause of diverging preferences for RE lies in the problem of public goods, which is shown here in its purest form. For the marketing of RE in competitive markets it is important that consumers make two conflicting demands. On the one hand, individuals derive benefits from the moral satisfaction of voluntary climate-friendly activities and RE development. On the other hand, they prefer political mechanisms that guarantee the development of RE by collective obligations that reduce or eliminate the possibility of free riding on other individuals’ expenditures.