Consumers’ Willingness to Pay for Electricity from Renewable Energy Sources, Queensland, Australia

Abstract

The results of a survey of Queensland households regarding their willingness to pay (WTP) for renewable energy and support the Mandatory Renewable Energy Target (MRET) policy are presented. Results suggest that respondents were willing to pay more for the electricity generated from the renewable energy for several reasons including the emissions reduction and the benefits of future generations. On average the respondents were willing to pay about $22/quarter to support the increase in electricity generation from renewable energy sources in support of the MRET. The mean for voluntary contributions to increase the generation of electricity from renewable energy sources was $28/quarter. Furthermore, the respondents who hold the perception that a particular electricity generation technology does negatively affect the environment had a significantly different WTP compared to respondents holding the perceptions that the technology does not negatively affect the environment. Finally, respondents were willing to pay significantly more if voluntary payments were made possible compared to the MRET imposts. Therefore, the consumer driven purchases can, in part, support the future of renewable generation capacity in Queensland. However, the reliance upon other policy alternatives may be needed. The results indicate that a more effective renewable energy policy reflecting these preferences can be put in place.