Renewable energy prosocial behavior, is it source dependent?

Abstract

Facing increasing nonrenewable and environmental concerns with fossil power generation, renewable energy is being supported by government mechanisms. With the power generation cost of renewables generally higher than fossil fuels, determining the optimal level of these mechanisms requires an understanding of households’ prosocial behavior toward renewables. The issue is determining the magnitude households are willing to pay (WTP) for alternative renewables. Our hypothesis is this behavior varies by the type of renewable energy. As a test of this hypothesis, we apply a discrete choice experiment to measure households’ WTP. Results support our hypothesis with a positive WTP for solar energy, leading to a 62% reduction in solar subsidy, and a negative WTP for biomass and wind sources.