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Willing to Pay More For Renewables?

April 17, 2012

This is an interesting question since over twenty states now require utilities to sell a rising percentage of electricity as coming from renewable sources, such as wind and solar. These laws are referred to as Renewable Portfolio Standards (RPS) or Renewable Energy Standards (RES).

The consulting form Accenture addressed the question in a recent survey.

By around 2020, states with RPS laws will require that 20 to 25% of the electricity sold in each state to come from renewable sources. (California will require that 33% come from renewable sources.)

In addition, Senator Bingaman (D, NM) is still trying to get the Senate to pass his Clean Energy Standard Act of 2012 (CES) that would require utilities in every state to sell electricity from renewable sources,  and meet minimum amounts similar to state RPS requirements. (The Bingaman Act has features surprisingly similar to the Waxman-Markey cap and trade bill.)

The Bingaman Act requires that 84% of electricity in 2035 to be “Clean Energy.” The Act includes Hydro and Nuclear as “Clean Energy” if built after 1991. The Act also has a federal trading program – shades of cap and trade. The Act is only 24 pages long and is worth reading as it provides a sense of how big government thinks and regulates.

These laws, RPS or CES, will force homeowners and industry to pay more for the electricity they use, because electricity generated from wind and solar costs more than electricity generated using natural gas or coal.

The consulting firm Accenture recently conducted a survey, spread over three years with 30,000 respondents, to measure how utilities can improve their customer communications.

As a part of the survey Accenture asked the question:

“Would you be willing to pay a premium for your electricity in order to receive these additional products/services?”

Among the added products or services was “Greater mix of renewable energy sources.”

Over 70% said No, they wouldn’t be interested in paying more. (Fig 8, page 14 of the survey.)

The Premium, “Save the Planet” package was roundly voted down, with at least 71% of the respondents not interested. (Fig 9, page 14)

And the “Save the Planet” package had a price increase of only 5%, which is far below what RPS or CES will require.

In spite of the propaganda about having to cut CO2 emissions 80% by 2050, a large majority of people aren’t interested in paying more for their electricity, which is what happens with RPS or CES.

 Notes:

From Accenture: Actionable Insights for the New Energy Consumer – Accenture end-consumer observatory 2012

 Bingaman CES Act available at: http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=b3580f37-ec8c-4698-a635-3e19f9815b9a

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