Skip to main content

Advertisement

SpringerLink
Log in

The influence of consumers’ intention factors on willingness to pay for renewable energy: a structural equation modeling approach

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

As the adoption of renewable power generation technologies (RPTs) is a complex and multidimensional process influenced by a variety of factors, it provokes traction among researchers to identify these influencing factors. This study aims to investigate the impact of consumers’ intention factors on willingness to pay (WTP) for renewable energy (RE) in Pakistan. The current research has contributed through expanding the theoretical framework of the theory of planned behavior by adding two new constructs, i.e., belief about RE cost and environmental concern to better understand consumers’ intentions towards adoption or prohibition of RPTs. Findings are based on the primary data gathered from 349 residents in the five major cities of Pakistan including, Karachi, Lahore, Faisalabad, Rawalpindi, and Multan by conducting a comprehensive survey. Structural equation modeling was employed for data analysis purposes. Research results indicate that the influencing factors such as attitude, subjective norms, and perceived behavioral control positively moderate the relationship between consumer’s intention and WTP for RE, belief about RE cost has a negative effect, while environmental concern did not find to have a significant effect. Based on research findings, this study offered essential policy recommendations to fulfill the country’s energy needs on its way to a future of sustainable development.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Abbreviations

ATD:

Attitude

BREC:

Belief about renewable energy cost

CI:

Consumers’ intention

ECN:

Environmental concern

PBC:

Perceived behavioral control

RE:

Renewable energy

RPTs:

Renewable power generation technologies

SBN:

Subjective norms

TPB:

Theory of planned behavior

WTP:

Willingness to pay

References

  • Aarikka-Stenroos L, Sandberg B, Lehtimäki T (2014) Networks for the commercialization of innovations: a review of how divergent network actors contribute. Ind Mark Manage 43(3):365–381

    Google Scholar 

  • Afroz R, Rahman A, Masud MM, Akhtar R, Duasa JB (2015) How individual values and attitude influence consumers’ purchase intention of electric vehicles—some insights from Kuala Lumpur, Malaysia. Environ Urban ASIA 6(2):193–211

    Google Scholar 

  • Ahmad M, Zhao ZY, Irfan M, Mukeshimana MC (2019a) Empirics on influencing mechanisms among energy, finance, trade, environment, and economic growth: a heterogeneous dynamic panel data analysis of China. Environ Sci Pollut Res 26(14):14148–14170

    Google Scholar 

  • Ahmad M, Zhao ZY, Li H (2019b) Revealing stylized empirical interactions among construction sector, urbanization, energy consumption, economic growth and CO2 emissions in China. Sci Total Environ 657:1085–1098

    CAS  Google Scholar 

  • Ajzen I (1985) From intentions to actions: a theory of planned behavior in action control. Springer, pp 11–39

  • Ajzen I (1991) The theory of planned behavior. Organ Behav Hum Decis Processes 50(2):179–211

    Google Scholar 

  • Ajzen, I, Fishbein, M (1980) Understanding attitudes and predicting social behavior

  • Alam SS, Hashim NH, Rashid M, Omar NA, Ahsan N, Ismail MD (2014) Small-scale households renewable energy usage intention: theoretical development and empirical settings. Renew Energy 68:255–263

    Google Scholar 

  • Al-Gahtani SS (2016) Empirical investigation of e-learning acceptance and assimilation: a structural equation model. Appl Comput, Inf 12(1):27–50

    Google Scholar 

  • Ali S, Ullah H, Akbar M, Akhtar W, Zahid H (2019) Determinants of consumer intentions to purchase energy-saving household products in Pakistan. Sustainability 11(5):1462

    Google Scholar 

  • Amer M, Daim TU, Jetter A (2016) Technology roadmap through fuzzy cognitive map-based scenarios: the case of wind energy sector of a developing country. Technol Anal Strateg Manag 28(2):131–155

    Google Scholar 

  • Anderson JC, Gerbing DW (1988) Structural equation modeling in practice: a review and recommended two-step approach. Psychol Bull 103(3):411

    Google Scholar 

  • Bang HK, Ellinger AE, Hadjimarcou J, Traichal PA (2000) Consumer concern, knowledge, belief, and attitude toward renewable energy: an application of the reasoned action theory. Psychol Mark 17(6):449–468

    Google Scholar 

  • Baron RM, Kenny DA (1986) The moderator–mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. J Pers Soc Psychol 51(6):1173–1182

    CAS  Google Scholar 

  • Batley SL, Fleming PD, Urwin P (2000) Willingness to pay for renewable energy: implications for UK green tariff offerings. Indoor Built Environ 9(3–4):157–170

    Google Scholar 

  • Bentler PM, Bonett DG (1980) Significance tests and goodness of fit in the analysis of covariance structures. Psychol Bull 88(3):588

    Google Scholar 

  • Byrne BM (1994) Structural equation modeling with EQS and EQS/Windows: basic concepts, applications, and programming Sage

  • Chandio AA, Rauf A, Jiang Y, Ozturk I, Ahmad F (2019a) Cointegration and causality analysis of dynamic linkage between industrial energy consumption and economic growth in Pakistan. Sustainability 11(17):4546

    Google Scholar 

  • Chandio AA, Jiang Y, Sahito JGM, Ahmad F (2019b) Empirical insights into the long-run linkage between households energy consumption and economic growth: macro-level empirical evidence from Pakistan. Sustainability 11(22):6291

    Google Scholar 

  • Chang MK (1998) Predicting unethical behavior: a comparison of the theory of reasoned action and the theory of planned behavior. J Bus Eth 17(16):1825–1834

    Google Scholar 

  • Chen MF (2016) Extending the theory of planned behavior model to explain people’s energy savings and carbon reduction behavioral intentions to mitigate climate change in Taiwan–moral obligation matters. J Clean Prod 112:1746–1753

    Google Scholar 

  • Chen L, Xu J, Zhou Y (2017) Regulating the environmental behavior of manufacturing SMEs: interfirm alliance as a facilitator. J Clean Prod 165:393–404

    Google Scholar 

  • Chou JS, Kim C, Ung TK, Yutami IG, Lin GT, Son H (2015) Cross-country review of smart grid adoption in residential buildings. Renew Sust Energ Rev 48:192–213

    Google Scholar 

  • Chu S, Cui Y, Liu N (2017) The path towards sustainable energy. Nat Mater 16(1):16

    Google Scholar 

  • Cohen J (1988) Statistical power analysis for the behavioral sciences. In Statistical power analysis for the behavioral sciences. Academic Press, New York, p 490

    Google Scholar 

  • Dienes C (2015) Actions and intentions to pay for climate change mitigation: environmental concern and the role of economic factors. Ecol Econ 109:122–129

    Google Scholar 

  • Dodds WB, Monroe KB, Grewal D (1991) Effects of price, brand, and store information on buyers’ product evaluations. J Mark Res 28(3):307–319

    Google Scholar 

  • Eder JM, Mutsaerts CF, Sriwannawit P (2015) Mini-grids and renewable energy in rural Africa: how diffusion theory explains adoption of electricity in Uganda. Energy Res Soc Sci 5:45–54

    Google Scholar 

  • Ek K (2005) Public and private attitudes towards “green” electricity: the case of Swedish wind power. Energy Policy 33(13):1677–1689

    Google Scholar 

  • Fatai K, Oxley L, Scrimgeour FG (2004) Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, the Philippines and Thailand. Math Comput Simul 64(3–4):431–445

    Google Scholar 

  • Field A (2009) Discovering statistics using SPSS. SAGE Publications Ltd, London, pp 166–181

    Google Scholar 

  • Fishbein M, Ajzen I (1975) Belief, attitude, intention and behaviour: an introduction to theory and research, vol 480. Addison Wesley, Reading

    Google Scholar 

  • Fornell C, Larcker DF (1981) Structural equation models with unobservable variables and measurement error: algebra and statistics. J Mark Res 18:382

    Google Scholar 

  • Fujii S (2006) Environmental concern, attitude toward frugality, and ease of behavior as determinants of pro-environmental behavior intentions. J Environ Psychol 26(4):262–268

    Google Scholar 

  • Gadenne D, Sharma B, Kerr D, Smith T (2011) The influence of consumers’ environmental beliefs and attitudes on energy saving behaviours. Energy Policy 39(12):7684–7694

    Google Scholar 

  • George JF (2004) The theory of planned behavior and internet purchasing. Internet Res 14(3):198–212

    Google Scholar 

  • Ghafoor A, Rehman TU, Munir A, Ahmad M, Iqbal M (2016) Current status and overview of renewable energy potential in Pakistan for continuous energy sustainability. Renew Sust Energ Rev 60:1332–1342

    Google Scholar 

  • Ghosh A, Ghosh D (2018) Investments in clean energy in South Asia: visiting barriers and gaps from the perspective of policies and politics in sustainable energy and transportation. Springer, Singapore, pp 115–135

    Google Scholar 

  • Greaves M, Zibarras LD (2013) Stride C using the theory of planned behavior to explore environmental behavioral intentions in the workplace. J Environ Psychol 34:109–120

    Google Scholar 

  • Ha HY, Janda S (2012) Predicting consumer intentions to purchase energy-efficient products. J Consum Mark 29(7):461–469

    Google Scholar 

  • Halder P, Pietarinen J, Havu-Nuutinen S, Pöllänen S, Pelkonen P (2016) The theory of planned behavior model and students’ intentions to use bioenergy: a cross-cultural perspective. Renew Energy 89:627–635

    Google Scholar 

  • Ham M, Jeger M, Frajman Ivković A (2015) The role of subjective norms in forming the intention to purchase green food. Econ Res Istraz 28(1):738–748

    Google Scholar 

  • Hansen LK, Hammarlund K, Sørensen HC, Christensen L (2003) Public acceptance of wave energy In Proceedings from the 5th European wave energy conference. University College Cork, Ireland

    Google Scholar 

  • Hansla A, Gamble A, Juliusson A, Gärling T (2008) Psychological determinants of attitude towards and willingness to pay for green electricity. Energy Policy 36(2):768–774

    Google Scholar 

  • Hartmann P, Apaolaza-Ibáñez V (2012) Consumer attitude and purchase intention toward green energy brands: the roles of psychological benefits and environmental concern. J Bus Res 65(9):1254–1263

    Google Scholar 

  • Hast A, Alimohammadisagvand B, Syri S (2015) Consumer attitudes towards renewable energy in China—the case of Shanghai. Sust Cities Soc 17:69–79

    Google Scholar 

  • Iqbal T, Dong CQ, Lu Q, Ali Z, Khan I, Hussain Z, Abbas A (2018) Sketching Pakistan’s energy dynamics: prospects of biomass energy. J Renew Sustain Energy 10(2):023101

    Google Scholar 

  • Irfan M, Zhao ZY, Ahmad M, Batool K, Jan A, Mukeshimana MC (2019a) Competitive assessment of Indian wind power industry: a five forces model. J Renew Sustain Energy 11(6):063301

    Google Scholar 

  • Irfan M, Zhao ZY, Ahmad M, Mukeshimana MC (2019b) Solar energy development in Pakistan: barriers and policy recommendations. Sustainability 11(4):1206

    Google Scholar 

  • Irfan M, Zhao ZY, Ahmad M, Rehman A (2019c) A techno-economic analysis of off-grid solar PV system: a case study for Punjab Province in Pakistan. Processes 7(10):708

    CAS  Google Scholar 

  • Irfan M, Zhao ZY, Mukeshimana MC, Ahmad M (2019d) Wind energy development in South Asia: status, potential and policies in 2019 2nd International Conference on Computing, Mathematics and Engineering Technologies (iCoMET) 2019c Jan 30 (pp 1–6) IEEE

  • Irfan M, Zhao ZY, Ahmad M, Mukeshimana MC (2019e) Critical factors influencing wind power industry: a diamond model based study of India. Energy Rep 5:1222–1235

    Google Scholar 

  • Jabeen G, Yan Q, Ahmad M, Fatima N, Qamar S (2019) Consumers’ intention-based influence factors of renewable power generation technology utilization: a structural equation modeling approach. J Clean Prod 237:117737

    Google Scholar 

  • Jayaraman K, Paramasivan L, Kiumarsi S (2017) Reasons for low penetration on the purchase of photovoltaic (PV) panel system among Malaysian landed property owners. Renew Sust Energ Rev 80:562–571

    Google Scholar 

  • Kaiser HF (1974) An index of factorial simplicity. Psychometrika 39(1):31–36

    Google Scholar 

  • Kaiser FG, Gutscher H (2003) The proposition of a general version of the theory of planned behavior: predicting ecological behavior. J Appl Soc Psychol 33(3):586–603

    Google Scholar 

  • Kamran M (2018) Current status and future success of renewable energy in Pakistan. Renew Sust Energ Rev 82:609–617

    Google Scholar 

  • Karakaya E, Sriwannawit P (2015) Barriers to the adoption of photovoltaic systems: the state of the art. Renew Sust Energ Rev 49:60–66

    Google Scholar 

  • Kardooni R, Yusoff SB, Kari FB (2016) Renewable energy technology acceptance in Peninsular Malaysia. Energy Policy 88:1–0

    Google Scholar 

  • Kern F, Smith A (2008) Restructuring energy systems for sustainability? Energy transition policy in the Netherlands. Energy Policy 36(11):4093–4103

    Google Scholar 

  • Kline RB (2005) Principles and practice of structural equation modeling, 2nd edn. Guilford Press, New York

    Google Scholar 

  • Klöckner CA (2013) A comprehensive model of the psychology of environmental behaviour—a meta-analysis. Glob Environ Chang 23(5):1028–1038

    Google Scholar 

  • Korcaj L, Hahnel UJ, Spada H (2015) Intentions to adopt photovoltaic systems depend on homeowners' expected personal gains and behavior of peers. Renew Energy 75:407–415

    Google Scholar 

  • Kostakis I, Sardianou E (2012) Which factors affect the willingness of tourists to pay for renewable energy? Renew Energy 38:169–172

    Google Scholar 

  • Kowalska-Pyzalska A (2018) An empirical analysis of green electricity adoption among residential consumers in Poland. Sustainability 10(7):2281

    Google Scholar 

  • Kumar V, Chandra B (2018) An application of theory of planned behavior to predict young Indian consumers’ green hotel visit intention. J Clean Prod 172:1152–1162

    Google Scholar 

  • Lei PW, Wu Q (2007) Introduction to structural equation modeling: issues and practical considerations. Educ Meas Issu Pract 26(3):33–43

    Google Scholar 

  • Leucht M, Kölbel T, Laborgne P, Khomenko N (2010) The role of societal acceptance in renewable energy innovations breakthrough in the case of deep geothermal technology. In Proceedings World Geothermal Congress 2010 Apr

  • Lin CY, Syrgabayeva D (2016) Mechanism of environmental concern on intention to pay more for renewable energy: application to a developing country. Asia Pac Manage Rev 21(3):125–134

    Google Scholar 

  • Liu W, Wang C, Mol AP (2013) Rural public acceptance of renewable energy deployment: the case of Shandong in China. Appl Energy 102:1187–1196

    Google Scholar 

  • Lopes JR, de Araújo Kalid R, Rodríguez JL, Ávila Filho S (2019) A new model for assessing industrial worker behavior regarding energy saving considering the theory of planned behavior, norm activation model and human reliability. Resour Conserv Recycl 145:268–278

    Google Scholar 

  • Luthra S, Kumar S, Garg D, Haleem A (2015) Barriers to renewable/sustainable energy technologies adoption: Indian perspective. Renew Sust Energ Rev 41:762–776

    Google Scholar 

  • Madden TJ, Ellen PS, Ajzen I (1992) A comparison of the theory of planned behavior and the theory of reasoned action. Personal Soc Psychol Bull 18(1):3–9

    Google Scholar 

  • Mirza UK, Ahmad N, Harijan K, Majeed T (2009) Identifying and addressing barriers to renewable energy development in Pakistan. Renew Sust Energ Rev 13(4):927–931

    Google Scholar 

  • Muneer T, Maubleu S, Asif M (2006) Prospects of solar water heating for textile industry in Pakistan. Renew Sust Energ Rev 10(1):1–23

    CAS  Google Scholar 

  • Neale MC, Hunter MD, Pritikin JN, Zahery M, Brick TR, Kirkpatrick RM, Estabrook R, Bates TC, Maes HH, Boker SM (2016) OpenMx 20: extended structural equation and statistical modeling. Psychometrika 81(2):535–549

    Google Scholar 

  • Nunnally JC (1978) Psychometric theory. McGraw-Hill, New York

    Google Scholar 

  • Oikonomou V, Becchis F, Steg L, Russolillo D (2009) Energy saving and energy efficiency concepts for policy making. Energy Policy 37(11):4787–4796

    Google Scholar 

  • Olshavsky RW, Granbois DH (1979) Consumer decision making—fact or fiction? J Consum Res 6(2):93–100

    Google Scholar 

  • Ozaki R (2011) Adopting sustainable innovation: what makes consumers sign up to green electricity? Bus Strateg Environ 20(1):1–7

    Google Scholar 

  • Pakistan Economic Survey (2018–19) Pakistan Economic Survey Report 2018–2019. Islamabad

  • Park E, Ohm JY (2014) Factors influencing the public intention to use renewable energy technologies in South Korea: effects of the Fukushima nuclear accident. Energy Policy 65:198–211

    Google Scholar 

  • Powers TL, Swan JE, Lee SD (1992) Identifying and understanding the energy conservation consumer: A micromarketing systems approach. J Macromarketing 12:5–15

    Google Scholar 

  • Rafique MM, Rehman S (2017) National energy scenario of Pakistan–current status, future alternatives, and institutional infrastructure: an overview. Renew Sust Energ Rev 69:156–167

    Google Scholar 

  • Rehman A, Deyuan Z, Chandio AA, Hussain I (2018) An empirical analysis of rural and urban populations' access to electricity: evidence from Pakistan. Energy Sustain Soc 8(1):40

    Google Scholar 

  • Rehman A, Rauf A, Ahmad M, Chandio AA, Deyuan Z (2019) The effect of carbon dioxide emission and the consumption of electrical energy fossil fuel energy and renewable energy on economic performance: evidence from Pakistan. Environ Sci Pollut Res 26(21):21760–21773

    CAS  Google Scholar 

  • Roe B, Teisl MF, Levy A, Russell M (2001) US consumers’ willingness to pay for green electricity. Energy Policy 29(11):917–925

    Google Scholar 

  • Rogers JC, Simmons EA, Convery I, Weatherall A (2012) Social impacts of community renewable energy projects: findings from a woodfuel case study. Energy Policy 42:239–247

    Google Scholar 

  • Sahir MH, Qureshi AH (2007) Specific concerns of Pakistan in the context of energy security issues and geopolitics of the region. Energy Policy 35(4):2031–2037

    Google Scholar 

  • Shahbaz, M, Ali A (2016) Measuring economic cost of electricity shortage: current challenges and future prospects in Pakistan. Bull Energy Econ 211–223

  • Shakeel SR, Rahman SU (2018) Towards the establishment of renewable energy technologies' market: an assessment of public acceptance and use in Pakistan. J Renew Sustain Energy 10(4):045907

    Google Scholar 

  • Shakeel SR, Takala J, Shakeel W (2016) Renewable energy sources in power generation in Pakistan. Renew Sust Energ Rev 64:421–434

    Google Scholar 

  • Shakeel SR, Takala J, Zhu LD (2017) Commercialization of renewable energy technologies: a ladder building approach. Renew Sust Energ Rev 78:855–867

    Google Scholar 

  • Steenkamp JB, Baumgartner H (2000) On the use of structural equation models for marketing modeling. I J Res Mark 17(2–3):195–202

    Google Scholar 

  • Story V, O'Malley L, Hart S (2011) Roles, role performance, and radical innovation competences. Ind Mark Manage 40(6):952–966

    Google Scholar 

  • Tan BC (2011) The roles of knowledge, threat, and PCE on green purchase behavior. Int J Bus Manage 6(12):14

    Google Scholar 

  • Tan CS, Ooi HY, Goh YN (2017) A moral extension of the theory of planned behavior to predict consumers’ purchase intention for energy-efficient household appliances in Malaysia. Energy Policy 107:459–471

    Google Scholar 

  • Thøgersen J, Grønhøj A (2010) Electricity saving in households—a social cognitive approach. Energy Policy 38(12):7732–7743

    Google Scholar 

  • Thompson B (2004) Exploratory and confirmatory factor analysis: understanding concepts and applications. American Psychological Association, Washington DC

    Google Scholar 

  • Traber T, Kemfert C (2009) Impacts of the German support for renewable energy on electricity prices, emissions, and firms. Energy J 155–78

  • Wang Z, Zhang B, Li G (2014) Determinants of energy-saving behavioral intention among residents in Beijing: extending the theory of planned behavior. J Renew Sustain Energy 6(5):053127

    Google Scholar 

  • Wang Z, Zhao C, Yin J, Zhang B (2017) Purchasing intentions of Chinese citizens on new energy vehicles: how should one respond to current preferential policy? J Clean Prod 161:1000–1010

    Google Scholar 

  • Yaqoot M, Diwan P, Kandpal TC (2016) Review of barriers to the dissemination of decentralized renewable energy systems. Renew Sust Energ Rev 58:477–490

    Google Scholar 

  • Yazdanpanah M, Forouzani M (2015) Application of the theory of planned behaviour to predict Iranian students’ intention to purchase organic food. J Clean Prod 107:342–352

    Google Scholar 

  • Yousuf I, Ghumman AR, Hashmi HN, Kamal MA (2014) Carbon emissions from power sector in Pakistan and opportunities to mitigate those. Renew Sust Energ Rev 34:71–77

    CAS  Google Scholar 

  • Zarnikau J (2003) Consumer demand for ‘green power’and energy efficiency. Energy Policy 31(15):1661–1672

    Google Scholar 

  • Zhang B, Wang Z, Lai KH (2015) Mediating effect of managers’ environmental concern: bridge between external pressures and firms’ practices of energy conservation in China. J Environ Psychol 43:203–215

    CAS  Google Scholar 

  • Zografakis N, Sifaki E, Pagalou M, Nikitaki G, Psarakis V, Tsagarakis KP (2010) Assessment of public acceptance and willingness to pay for renewable energy sources in Crete. Renew Sust Energ Rev 14(3):1088–1095

    Google Scholar 

Download references

Funding

This work is supported by the Beijing Natural Science Foundation (8192043).

Author information

Authors and Affiliations

  1. Beijing Key Laboratory of New Energy and Low Carbon Development, School of Economics and Management, North China Electric Power University, Beijing, 102206, China

    Muhammad Irfan & Zhen-Yu Zhao

  2. Department of Building and Real Estate, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, China

    Heng Li

  3. College of Economics and Management, Henan Agricultural University, Zhengzhou, China

    Abdul Rehman

Authors
  1. Muhammad Irfan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Zhen-Yu Zhao
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Heng Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Abdul Rehman
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Muhammad Irfan or Zhen-Yu Zhao.

Additional information

Responsible editor: Baojing Gu

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Irfan, M., Zhao, ZY., Li, H. et al. The influence of consumers’ intention factors on willingness to pay for renewable energy: a structural equation modeling approach. Environ Sci Pollut Res 27, 21747–21761 (2020). https://doi.org/10.1007/s11356-020-08592-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-020-08592-9

Keywords

Search

Navigation