Residential Green Power Demand in the United States

Dagher, Leila and Bird, Lori and Heeter, Jenny (2016): Residential Green Power Demand in the United States. Published in: Renewable Energy , Vol. 114, (2017): pp. 1062-1068.

Abstract

This paper investigates the demand determinants of green power in the U.S. residential sector. The data employed were collected by the National Renewable Energy Laboratory and consist of a cross-section of seven utilities observed over 13 years. A series of tests are performed that resulted in estimating a demand equation using the one-way cross-section random effects model. As expected, we find that demand is highly price inelastic. More interestingly though, is that elasticity with respect to number of customers is 0.52 leading to the conclusion that new subscribers tend to purchase less green power on average than the existing customers. Another compelling finding is that obtaining accreditation will have a 28.5% positive impact on consumption. Knowing that gaining green accreditation is important to the success of programs, utilities may want to seek certification and highlight it in their advertising campaigns.

• Item Type: MPRA Paper
• Language: English
• Keywords: green power; green tariff; voluntary market; renewable energy; price elasticity; panel data
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q21 - Demand and Supply ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices

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