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Residential green power demand in the United States

Leila Dagher (), Lori Bird and Jenny Heeter

Renewable Energy, 2017, vol. 114, issue PB, 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.

Keywords: Green power; Green tariff; Voluntary market; Renewable energy; Price elasticity; Panel data (search for similar items in EconPapers)
JEL-codes: C33 C51 Q21 Q41 (search for similar items in EconPapers)
Date: 2017
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