Wind Energy and the US Consumer

on September 27, 2012 at 2:00 PM

When it comes to sources of power for products and services, consumers expressed a very strong preference for clean energy over fossil fuels in the Global Consumer Wind Study.

The overwhelming majority (67%) of respondents said that they would prefer to have their electricity sources supplied by renewables, versus 9% for fossil fuels and 8% for nuclear.

Leadership on the development of renewable energy should start with the government, but the private sector should play a crucial supporting role, according to the results of the Global Consumer Wind Study. Only 9% expressed strong agreement when asked whether companies should lead the adoption of renewables, as opposed to the 29% who ranked government leadership as the most important factor.

But the overwhelming majority, 60%, agreed at least moderately that companies should play a lead role in the adoption of renewables and one out of every five consumers believe citizens should play the leading role in the adoption of renewable energy.

To take advantage of this trend, many corporations have already turned to renewable energy for a significant percentage of their total electricity use, including McDonalds (30%), Starbucks (47%), Whole Foods Market (100%) and Kohl’s (100%).

Vicki Shamion, senior vice president of public and community relations at Kohl’s, said: “Wind power is one more way Kohl’s can support our mission to be a leading environmentally responsible retailer and demonstrate our commitment to the use and support of renewable energy.”

About 63% of US consumers report having a more positive perception of brands that use renewable energy.

But when it comes to paying a premium for renewable products and services, the picture gets more complex.

Just over 26% of respondents said they would definitely not be willing to pay a price premium for a car produced with renewable energy, and only 11% would definitely be willing to do so.

A similar pattern emerged in GCWS responses across many consumer goods. For wine, coffee, soft drinks, those opposed to the idea of a price premium for renewables hovered around the 35% mark, dropping to around 30% of respondents who said they would object to paying more for software, cell phones, clothes and chocolate.

Tapping the Moderate Majority

However, respondents who expressed a strong or moderate willingness to spend a premium for products made with renewable energy ranges between approximately one in five and one in three.

The key to tapping into this moderate majority could be education on brand values where the results become surprising.

The WindMade brand, of which wind energy company Vestas was a founding member in 2011, achieved a low rate of recognition: only 2% said they had heard of it previously. But when asked to rate the relevance of WindMade, only 10% said the brand was not relevant, but 32% answered that it was very relevant or relevant.

When asked: assuming that how likely would you buy products with this “consumer label”?
Just over 72% of respondents said they would be very likely or moderately likely to buy WindMade products regularly for an extra cost that was satisfactory.

About 44% of US consumers rank climate change as one of the top five challenges facing the world today, and 74% believe increased use of renewable energy is a good solution.

Just over 20% said it was a bad idea to burn fossil fuels because CO2 causes climate change, 11% said it was a good idea and 19% said they did not know. Regardless of perceptions of climate change, 79% of US consumers are concerned about US dependence on foreign imports of fossil fuels and 78% of respondents said that they would prefer to see renewables such as wind, solar, hydro, biomass and geothermal developed over the next five years.

But when it comes to paying for the adoption of renewables, GCWS data may suggest that consumers would prefer the burden of responsibility be spread across taxpayers, rather than directed at consumers.

Respondents expressed strong support for subsidies for the wind industry: 56% said it was definitely a good idea to support the industry.

However, 40% of respondents said that they would not be willing to pay more for electricity produced by renewable sources, 18% said they would be willing to pay an extra 1%-5% and 13% said they would pay an extra 6%-10%.

But the 31% of respondents who would be willing to pay more represents a significant opportunity for companies within the clean energy sector.

Morten Albæk, CMO at Vestas, said: “The fact that consumers say they want renewable energy, and are willing to pay more for it, strengthens the business case for companies considering investments in renewable energy.”

This piece appears on Breaking Energy as part of the Energy Transparency series in partnership with Vestas.