Green Electricity Consumption In India - An Empirical Investigation Of Consumer's Choice In A Deregulated Indian Electricity Market

Abstract

Given the many socio-economic benefits of Renewable Energy Sources (RES), there is an urgent need to increase its penetration in the final energy mix for many countries. However, despite India's push to increase RES penetration, the actual share of green energy portfolio across sectors remains exceptionally low. Consumer’s WTP (Willingness-To-Pay) for RES becomes an important variable of consideration since it often reflects the social acceptability of green technologies. To investigate this in the Indian context, this study investigates residential consumer’s WTP for RES projects using the “Contingent Valuation Method”, along with factors influencing the same. The analysis was conducted using the contingent valuation method across 120 residential responses from a southernmost state of India called Tamil Nadu. Findings reveal that WTP for RES is existent, but low owing to lack of awareness of benefits of RES and the belief that electricity bills are already high. The paper concludes by presenting recommendations to enhance the adoption of RES amongst residential consumers in India