Are consumers’ willing to pay extra for the electricity from renewable energy sources? An example of Queensland, Australia

The results of a survey of Queensland households regarding their willingness to pay (WTP) for renewable energy suggest that while on average the respondents were willing to pay about $28/quarter on the top of their quarterly electricity bill to support the increase in electricity generation from renewable energy sources, there is significant heterogeneity in WTP. The heterogeneity in WTP is accounted for by estimating a latent class model. Three classes of respondents are identified using attitudinal and knowledge questions. Results indicated that there are significant differences in WTP among classes. The mean WTP in class 1 was $29 (or 12.7% of their average electricity bill), in class 2 was $13 (or 4.5% of their average electricity bill), and in class 3 was $36 (or 14.4% of their average electricity bill). Tobit analysis for each latent class indicated the importance of socio-demographic variables in respondents stated WTP for electricity generated from renewable energy.