Willingness to Pay for Home Energy Management System: A Cross-Country Comparison

Abstract

Home Energy Management System (HEMS) is a technology that can increase residential energy efficiency and demand flexibility, which in turn improves power grid reliability and renewable energy penetration. This research investigates residents’ willingness to pay (WTP) for HEMS in New York and Tokyo, and how demographic and socio-psychological variables derived from Theory of Planned Behavior, Technology Acceptance Model and empirical evidence affect WTP. Bootstrapped regression analyses with 5000 resamples showed that attitude towards HEMS, social norms, and cost concerns affected WTP in both cities; perceived usefulness increased WTP in Tokyo; gender, age, income, trust in utilities and dependency concern affected WTP in New York. The results suggest the need to enhance social norms and alleviate cost concerns in promoting HEMS. Moreover, while educational campaigns about the usefulness of HEMS may help in Tokyo, targeting specific customer segments and cultivating trust in utility companies may be more effective in New York.