Wednesday, June 19, 2013

Evaluating voluntary ConsumEr adoption of grEEn priCing programs

WASHINGTON D.C. — The Institute for Energy Research (IER) released today a white paper entitled “Evaluating Voluntary Consumer Adoption of Green Pricing Programs.” The result of the analysis by IER policy experts examines information gathered from 31 utility companies across the nation that offer “opt-in” green pricing initiatives as a way to expand the adoption and utilization of renewable energy sources. IER’s analysis found that customer willingness to pay for Green Pricing Programs is directly correlated with the ability to pay and afford the added costs of a program which offers no immediate tangible benefit in exchange for a promise of future environmental gain. Additional findings include:
Despite the results from recent polling that suggest a majority of ratepayers in a variety of states are willing to assume additional costs associated with green pricing, that popular support does not bear out in actual “opt-ins” by customers.
The average level of participation in surveyed “opt-in” Green Pricing Programs was less than 2.1% with two-thirds of all surveyed utilities recording participation rates of 1% or less.
Participation in Green Pricing Programs ranged from a high of 21% in one utility in Palo Alto, CA, to less than one percent in other states.
In terms of their participation, the respondents in the top 10% have participation rates that are 150 times higher than the bottom 10% of respondents.
Participation rates of surveyed utilities were correlated with demographic data on income and educational attainment. The median income and college graduation rates in areas where the utilities with the top 10% of participation rates are located are 176% and 288% greater, respectively, than in the areas where the utilities with the bottom 10% of participation rates are located.
Policies associated with Renewable Portfolio Standards (RPS) may actually act as a deterrent for some consumers to support Green Pricing Programs. In states that have such standards, energy costs are almost 40% above those in non-RPS states.
According to IER’s examination of the data, consumers evaluate the benefit of Green Pricing Programs along economic lines. Such direct economic consideration must often take precedence over the indirect ideal of greater renewable energy production.
To read the complete analysis, click here.