Willingness to pay for green power in an unreliable electricity sector: Part 2. The case of the Lebanese commercial sector

Abstract

A survey on willingness to pay (WTP) for renewable energy (RE) sources is undertaken for the Lebanese commercial sector. Two hundred samples were collected from various companies across the country, collecting information on ‘company characteristics’ such as number of employees, space, energy provision and related costs, and information on WTP for RE sources under 5 scenarios that best encapsulate the possible outcomes of integrating RE, whether locally installed or nationally purchased through premiums, in an ‘unreliable’ electricity sector and one in which reliability is assumed to be secured. Tobit modeling or censored regression modeling was carried out, and results indicate the importance of RE sources in displacing completely the diesel gensets on WTP for RE, as well as the influence of ownership, number of employees and trust in government. The major finding of the paper is that the commercial sector promises to be a significant propagator of RE only if RE sources can displace diesel gensets (through the use of battery storage), which is possible for smaller offices; however for larger ones this comes prohibitively expensive. Demonstration projects are required for larger offices to showcase the savings that can be achieved through RE integration without batteries through the reduction of diesel fuel use alone.