Consumers willing to pay more for green energy

Posted by Alastair Otter on December 19, 2007
Posted in Lifestyle, Renewable energy

Wind farm (c) iStockPhoto.comAustralians are the most willing to pay a premium for eco-friendly energy, a new survey has found. And when it comes to purchasing “green” energy, two-thirds of consumers surveyed across the globe are willing to pay more for power that could be definitively shown to have lower emissions of greenhouse gases.

The IBM survey also found that nearly half of consumers surveyed would pay more for environmentally friendly non-energy products.

Australians are most willing to pay a premium for green power, but Americans are most willing to pay a sizable premium, up to an additional 20 percent or more.

“The emergence of climate change as a broad public concern has galvanised people to an extent seldom seen for issues involving their energy providers,” said IBM Global Business Services’s Michael Valocchi.

“Historically, consumers didn’t care about energy. This survey suggests that they want to engage and make a more personal connection to it.”

Overall, consumers want to be more active in their energy decision-making; however, they don’t seem to have enough awareness and knowledge to do so. While carbon footprints and other analyses of personal environmental impact have attracted widespread attention, 75 percent of consumers surveyed outside the US have not worked out their carbon footprint – and only 15 percent of US consumers said they had.

The survey also found that 61 percent of people surveyed would change their energy-consuming behavior – such as how and when they heat and cool their homes, do their laundry and cook their meals – in response to claims that there would be a positive environmental impact from such changes. This would rise to 65 percent if such benefits could be demonstrated. Of those surveyed, 84 percent said that a 50 percent reduction in energy cost during off-peak hours was the most important.

These survey results are part of a new report, recently released by IBM Global Business Services, titled, Plugging in the Consumer: Innovating utility business models for the future. The report forecasts how the change in energy customers’ expectations will impact the utility industry’s business model in the next five to 10 years, and predicts a steady progression toward a Participatory Network where consumers actively “plug in” to their energy decisions to a degree not seen before.

The report surveyed households in Australia, Germany, Japan, the Netherlands, the United Kingdom and the United States.

Download the full report from the IBM website.

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