Determinants of green electricity adoption among residential customers in Germany

Abstract

Abstract The label ‘green electricity’ is commonly used to refer to power generated from various renewable natural sources (e.g. wind). The present article develops hypotheses on the effects of eight attitudinal and perceptual characteristics of residential electricity consumers on their propensity to adopt a green electricity supplier. The hypotheses are tested empirically with data generated by means of a standardized telephone survey of 267 household electricity customers of a German regional power supplier. Questionnaire answers are augmented with information derived from the supplier's billing system on a participant's actual annual electricity consumption. Measurement and structural relationship models are obtained via Partial Least Squares analysis. Regardless of a person's level of actual power consumption in the recent past, propensity to adopt green electricity is most strongly influenced by general consumer attitudes towards environmental protection issues and social endorsement of green power use by close social contacts. In the subsample of participants with low actual electricity consumption, the propensity to purchase green energy is significantly positively affected by the weight an individual attaches to electricity prices in supplier selection decisions and the person's belief that his current electricity supplier takes over social responsibility. In contrast, in the subsample of respondents with high actual electricity consumption consumer's willingness to adopt green electricity is significantly enhanced by the degree of perceived dissimilarity among power company offerings. The identification of factors influencing the adoption of green electricity offers both practical implications for marketers of utilities and contributes to the academic knowledge base of a service domain characterized by increasing societal importance.

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