Willingness to pay for green electricity derived from renewable energy sources in Nigeria

Abstract

The electricity derived from sources of renewable energy has the potential to increase the safety of the power supply and contribute positively to environmental sustainability. Despite these laudable attributes, the level of grid integration of renewable electricity in Nigeria is low. This study, therefore, sought to understand the factors influencing the Willingness to Pay (WTP) for renewable electricity in Nigeria with a view to determining the cost the citizens are willing to pay for renewable electricity. This was achieved by conducting a survey of 400 participants who were randomly selected from five local governments in Ibadan (a cosmopolitan city located in South West Nigeria). Some of the critical results revealed that respondents are willing to pay an average cost of 5–10% above the present cost of electricity. It was also observed that the significant factors that affect respondents' WTP include age, income, marital status, and education level. A positive disposition towards renewable energy and a substantial level of awareness as regards renewable energy affect respondents’ willingness to pay for renewable energy. Policy statements were extracted based on the results of the study leading to useful recommendations on renewable energy promotion in Nigeria. The study could also give an idea of the optimal design of renewable energy mini/micro-grid architecture based on the range of the cost people are willing to pay in Nigeria.