Consumers’ Willingness to Pay for the Solar Photovoltaic System in the Post-Subsidy Era: A Comparative Analysis under an Urban-Rural Divide

Abstract

Concerns about the environment and renewable energy are growing. Improving the perception of renewable energy in urban and rural households is required to promote green development and to learn about consumer preferences for renewable energy based on the gradual reduction in financial subsidies for photovoltaic (PV) power generation. This paper aims to estimate the willingness of consumers to pay for a Household PV system and explores the factors that affect consumers’ product selection, which is conducive to optimizing Household PV products and policies and is important for achieving the carbon peaking and carbon neutrality goals. Using a discrete choice model, this paper surveyed 765 urban and rural residents without installing Household PV systems in Tianjin, China. Subsequently, the respondents’ attribute preferences and willingness to pay (WTP) for a Household PV system were analyzed using a logit regression analysis model. The influence of respondents’ socio-economic characteristics on WTP was analyzed. The empirical results showed that (1) price significantly impacts consumers’ PV adoption behaviors and consumers tend to choose cheaper PV products; (2) consumers are more willing to pay for the after-sales service (3959 USD/level) and traceable information (2176 USD/level), indicating their preference for these two attributes when considering options; (3) socio-economic variables, including gender and the number of minor children (i.e., children under the age of 18) at home, significantly impact consumers’ PV adoption behaviors. Males and consumers without minor children at home will pay more attention when selecting the products. Our research findings will provide valuable insights into policy making and the wide-ranging use of Household PV systems.

Keywords

• Household PV
• environmental awareness
• willingness to pay
• choice experiment