Consumers Willing to Pay Extra for Renewable Energy
More consumers are supporting alternative energy through their willingness to pay extra to invest renewable resources rather than paying extra to improve their current reliability. That is according new nationwide research from the Smart Grid Consumer Collaborative (SGCC) conducted by Market Strategies International. Specifically, the research determined that more than 60 percent of consumers are willing to pay an extra $2, $5 or even $15 a month to support deployment of alternative energy, but less than 60 percent were willing to pay those amounts to improve their current reliability.
This can be attributed, in part, to a consumer mindset about the job of the utility itself. Consumers who believe that reliability is part of what a utility should deliver as a basic responsibility and competence will not be willing to pay extra for it. Further, given that consumers are receiving more positive messaging surrounding renewable energy and its environmental benefits makes it more attractive and worth the premium.
For expansion of clean energy sources, support ranges from a high of 67 percent supporting a $2 increase to 58 percent supporting a $10 increase. For solar generation, support is strongest for a $5 per month increase (65 percent) and lowest for $10 (51 percent). For reliability, willingness to pay is strongest at $2 per month (58 percent), and weakest at $10 per month (48 percent). In each case, support is higher at $15 per month than at $10 per month.
The research also revealed that consumers favor critical peak rebate pricing programs over time-of-use pricing programs. In particular, critical peak rebate programs continues to have a higher level of interest (55 percent) than a time-of-use program (43 percent), though interest in both programs is down significantly since previous SGCC research two years ago.
What has remained relatively consistent over the last two years is consumer awareness of smart grid. Currently, 53 percent of respondents have never heard the term “smart grid;” however, 54 percent of respondents who are aware of smart grid and its benefits are supportive, the results of which are consistent with past SGCC research. Another one-fifth (22 percent) say that they have heard the term but don’t know what it means. Awareness levels are similar for smart meters: 48 percent have never heard the term and 17 percent don’t know what it means.
Among those familiar with the term smart grid, 54 percent say that their general feelings about smart grid are favorable; 23 percent are neutral; 14 percent are unfavorable; and 9 percent don’t know. General impressions of smart meters are about the same, at 53 percent favorable, 21 percent neutral, and 19 percent unfavorable. There are no significant changes compared to previous SGCC research.
The research results bear the need for continued education and outreach on the part of utilities, as well as other industry stakeholders.
“The results from this study illustrate the importance of promoting the understanding and benefits of modernized electrical systems to all stakeholders in the U.S.,” said Patty Durand, SGCC executive director.