Willingness to pay for renewable energy

This research estimates willingness to pay (WTP) for renewable energy and examines its determinants using the Discrete Choice Experiment. The data was collected in 2020 from 286 households with electricity connections in Ho Chi Minh City, Vietnam. In addition to Conditional Logit as the standard model, Mixed Logit and Latent Class are applied in this study to fix its limitations. Several outstanding findings are presented as follows. Firstly, an explicit linear relationship is found between the value of WTP and the increase in renewable energy (RE) share. Secondly, similar to previous literature, solar energy is the most valued RE source; however, the WTP for RE generated from biomass exceeds that from wind, although knowledge of wind energy is more popular than biomass through statistics, implying a huge potential for the development of biomass energy projects. Furthermore, two different latent classes are identified, including awareness of wind and biomass energy, home ownership, the number of people at home during the day and the total number of outages. Noticeably, there is no relationship between the WTP for clean energy and income found in this study, while almost all research found a positive correlation. The estimated results show comparative similarities in all three models, indicating the high reliability of research results.