Green Electricity Tariffs Research Articles

Green or greedy: the relationship between perceived benefits and homeowners’ intention to adopt residential low-carbon technologies

Transitioning to a net-zero economy requires a nuanced understanding of homeowners’ decision-making pathways when considering the adoption of Low Carbon Technologies (LCTs). These LCTs present both personal and collective benefits, with positive perceptions critically influencing attitudes and intentions. Our study analyses the relationship between two primary benefits: the household-level financial gain and the broader environmental advantage. Focusing on the German homeowners’ intention to adopt Rooftop Photovoltaic Systems, Energy Efficient Appliances, and Green Electricity Tariffs, we employ Partial Least Squares Structural Equation Modeling to demonstrate that the adoption intention of the LCTs is underpinned by the Theory of Planned Behaviour. Our research also highlights the pivotal role of perceived benefits in shaping attitudes and intentions. Attitudes towards the LCTs are more strongly related to product-specific benefits than affective constructs. In terms of evaluative benefits, environmental benefits exhibit a higher positive association with attitude formation compared to financial benefits. However, this relationship switches as homeowners move through the decision process with the financial benefits of selected LCTs having a consistently higher association with adoption intention. At the same time, financial benefits also positively affect attitudes. Observing this trend across both low- and high-cost LCTs, we recommend that policymakers and businesses enhance homeowners’ awareness of the personal advantages and implement strategies to make these financial benefits more tangible and accessible.

Do green electricity tariffs increase household electricity consumption?

ABSTRACT In this paper we investigate whether households change electricity consumption after they switch to a green electricity tariff. Using metered data of household electricity consumption from a large provider of green electricity in Germany, our quasi-experimental analysis finds that household switching to a green tariff leads to a non-monetary renewable rebound effect of around 7.7%. Further, our findings imply that this renewable rebound effect is persistent over at least four years. These findings are observationally consistent with moral licencing effects which induce households to permanently change their habitual behaviours and/or to acquire additional electricity-consuming technologies. Thus, failure to account for a renewable rebound in policy evaluation may lead to systematically underestimate the costs of achieving energy and climate targets.

From ambivalence to trust: Using blockchain in customer loyalty programs

Global initiatives on climate protection and national sustainability policies are accelerating the replacement of fossil fuels with renewable energy sources. Many electricity suppliers are engaged in efforts to monetize this transition with ‘green’ services and products, such as Green Electricity Tariffs. These promise customers that their supply includes a specific share of green electricity, yet since electricity suppliers often fail to deliver on those promises, many customers have lost trust in their suppliers. Further information asymmetries may not only exacerbate this loss of trust, but also spark distrust and lead to an overall feeling of ambivalence. Eventually, ambivalent customers may feel inclined to switch suppliers. To prevent this domino effect, electricity suppliers must eliminate ambivalence by increasing customer trust and reducing customer distrust. Here, we discuss how these challenges can be met with a customer loyalty program built on blockchain technology. We developed the program following a Design Science Research approach that facilitated refinement in four iteration and evaluation cycles. Our results indicate that the developed customer loyalty program restores trust, reduces distrust, and resolves customer ambivalence by providing four features: improved customer agency, sufficient and verifiable information, appropriate levels of usability, and unobstructed data access.

Do Consumers Want to Pay for Green Electricity? A Case Study from Poland

This paper analyses the willingness to pay (WTP) for green electricity among residential consumers in Poland, which is the sixth most populous and eighth largest and most dynamic economy in the European Union. The current share of renewable energy sources (RES) in energy consumption is around 13.5% and is expected to increase. To estimate the mean WTP of the residential consumers in Poland, as well as its main determinants, an empirical survey has been conducted and a contingent valuation method has been used. The results obtained indicate that—above all—age, income, environmental attitudes, peer support, but also education and knowledge play the most important role in explaining consumers’ WTP for green electricity. Statistical analyses indicate that the mean WTP of Polish households is currently quite low (additional 3.5 USD per month), which is due to the relatively low GDP per capita, lack of knowledge about green energy and no past experience with green electricity tariffs.

An Empirical Analysis of Green Electricity Adoption Among Residential Consumers in Poland

This paper investigates the acceptance of green electricity among Polish residential consumers. Our focus was on the socio-economic and environmental attributes of consumers in terms of their willingness to adopt renewable energy sources (RES) and green electricity tariffs. In particular, this study explores the determinants of adoption by examining consumers’ willingness to pay (WTP) for green electricity, willingness to switch to green electricity tariffs, and willingness to install small-scale generators in the household. The hypotheses were tested empirically with data collected by means of a standardized telephone survey of 502 household electricity consumers in Poland. Most Polish people accept and support the development of RES, but they do not know how to contribute to this process. Their WTP increases with income, education, pro-environmental attitudes, and knowledge. They also care about social influence. To increase the adoption rate of RES among residential consumers, stable legal regulations, clear procedures, subsidies, social campaigns, and educational trainings are needed. We believe that the findings from this study may be valuable for those involved in marketing green electricity offers and for politicians responsible for the increase of the share of renewables in the Polish power system.

An Empirically Grounded Model of Green Electricity Adoption in Germany: Calibration, Validation and Insights into Patterns of Diffusion

Spatially explicit agent-based models (ABM) of innovation diffusion have experienced growing attention over the last few years. The ABM presented in this paper investigates the adoption of green electricity tariffs by German households. The model represents empirically characterised household types as agent types which differ in their decision preferences regarding green electricity and other psychological properties. Agent populations are initialised based on spatially explicit socio demographic data describing the sociological lifestyles found in Germany. For model calibration and validation we use historical data on the German green electricity market including a rich dataset of spatially explicit customer data of one of the major providers of green electricity. In order to assess the similarity of the simulation results to historical observations we introduce two validation measures which capture different aspects of the green electricity diffusion. One measure is based on the residuals of spatially-aggregated time series of model indicators and the other measure considers a temporally aggregated but spatially disaggregated indicator of spatial spread. Finally, we demonstrate the descriptive richness of the model by investigating simulation outputs of the calibrated model in more detail. In particular, the results provide insights into the dynamics of the spatial and lifestyle heterogeneity “underneath†the diffusion curve of green electricity in Germany.

Good Energy to offer green electricity tariffs for ITM stations in UK

In the UK, the renewable electricity supplier and generator Good Energy Group has signed a Memorandum of Understanding with ITM Power, to explore ‘green’ electricity tariffs for hydrogen production using electrolysers at ITM's hydrogen refueling stations across the UK.

What makes people seal the green power deal? — Customer segmentation based on choice experiment in Germany

Consumers have the power to contribute to creating a more sustainable future by subscribing to green electricity tariffs. In order to reach consumers ‘beyond the eco-niche’, identifying the drivers that positively influence the adoption of green electricity is of fundamental importance. This paper examines various factors that help to explain the extent to which green electricity subscribers differ from those that display strong preferences towards green electricity but have not yet ‘walked the talk’. By making use of a latent class segmentation analysis based on choice-based conjoint data, this paper identifies three groups of potential green electricity adopters with varying degrees of preference for renewable energy. Findings indicate that socio-demographic factors play a marginal role in explaining the differences between green electricity subscribers and potential adopters, with the exception that actual adopters tend to be better educated. Analysis of psychographic and behavioral features reveals that adopters tend to perceive consumer effectiveness to be higher, place more trust in science, tend to estimate lower prices for green electricity tariffs, are willing to pay significantly more for other eco-friendly products and are more likely to have recently changed their electricity contract than non-adopters. Policy recommendations associated with these findings are provided.

Financing the decarbonized energy system through green electricity tariffs: A diffusion model of an induced consumer environmental market

This paper explores whether consumer-focused green electricity tariffs can incentivize investment in the transition to a decarbonized energy system. Green electricity tariffs are a means by which ‘green consumers’ can contribute to investment in renewable energy and energy sector transition. In order to conceptualize factors constraining the adoption of green electricity tariffs this paper develops a model that links the willingness-to-pay (WTP) literature with the established innovation diffusion literature. This concern arises from a need to reconcile the large disparities that have been empirically observed between the proportion of households actually adopting green electricity tariffs and the proportion in WTP surveys that claim they would (stated-willingness-to-adopt or SWA). Using the Bass Model as the point of departure our model depicts how increasing consumer environmental concern, driven by word-of-mouth and mass media communication channels, results in an increasing proportion of households with a SWA. The presence of response bias and the free rider problem result in ‘feasible adoption’ being below the SWA. Feasible adoption is, in turn, differentiated from actual adoption by the extent of market imperfections, such as the supply side problems and regulatory failures often discussed in the empirical literature.

Financing Renewable Energy Through Household Adoption of Green Electricity Tariffs: A Diffusion Model of an Induced Environmental Market

Green electricity tariffs are a means by which, green consumers, can contribute to investment in renewable energy. In order to conceptualize factors constraining the adoption of green electricity tariffs this paper develops a model that links the willingness-to-pay (WTP) literature with the established innovation diffusion literature. This concern arises from a need to reconcile the large disparities that have been empirically observed between the proportion of households actually adopting green electricity tariffs and the proportion in WTP surveys that claim they would (Stated-Willingness-to-Adopt or SWA). Using the Bass Model as the point of departure our model depicts how increasing consumer environmental concern, driven by word-of-mouth and mass media communication channels, results in an increasing proportion of households with a SWA. The presence of response bias and the free rider problem result in, feasible adoption, being below the SWA. Feasible adoption is, in turn, differentiated from actual adoption by the extent of market imperfections, such as the supply side problems and regulatory failures often discussed in the empirical literature.

Profiling potential green electricity tariff adopters: green consumerism as an environmental policy tool?

Green electricity tariffs are one means by which green consumers can contribute to a more sustainable future. This paper profiles potential adopters of green electricity tariffs. Potential adoption is measured in terms of respondents’ willingness to pay a premium for green energy in a national survey of the UK population. Hypotheses based principally on the cognitive behavioural literature on green consumerism and green energy markets are developed. These are tested using a broad range of variables which are grouped into three categories (demographic, attitudinal and behavioural). Consistent with past research, the empirical analyses find that attitudinal variables best characterise potential adopters. Further, potential adopters are found to have higher income, are better informed with respect to energy matters, show concern for the environment and believe individual actions can make a difference to environmental decay. The implications of these findings for marketing and environmental policy are explored.