The influence of “prosuming” green electricity on the WTP for electricity

Abstract

The act on granting priority to renewable energy sources has led to a higher share of electricity from renewables but also to a price increase in electricity in Germany. This fact puts especially farmers in an uncertain position as they belong to a group that often invests in the production of renewable based electricity. However, it is also a fact that farmers consume high amounts of electricity for the production of their agricultural goods. This special constellation turns farmers into prosumers as they often produce and consume large amounts of electricity. Therefore, we investigate factors influencing farmers’ willingness to pay (WTP) for electricity. The results reveal that farmers’ WTP depends on the energy source, and it can be seen that electricity from finite resources causes a discount compared to the German average electricity price. Furthermore, and against our expectations, farmers who have invested in the production of renewable electricity would rather pay less money for electricity. Socio-demographic and socio-economic characteristics have also been identified as influencing factors on farmers’ WTP for electricity. Possible reasons for the finding of these results are discussed which lead to several points of departure for further research.