Non-market valuation of consumer benefits towards the assessment of energy efficiency gap

Abstract

One difficulty of carrying out a full cost-benefit analysis in the assessment of energy efficiency investment is the monetization of non-market benefits. This research demonstrates a stated preference approach to non-market valuation of benefits from the consumer perception, by identifying the energy efficiency gap. Through the Contingent Valuation Method (CVM), the Willingness-to-Pay for non-market benefits was evaluated through a face-to-face survey on residents interested in participating in a pilot project of Energy Efficiency Management (EEM) system using Information Communication Technology (ICT) in Hong Kong. In addition, the influences of potential users’ demographic and consumption characteristics affecting the WTP of the EEM system are investigated by probit analysis and it was found that Age, Number of occupants, Intention and Perceived usefulness are the dominant factors. This study enables policy makers to enhance the gradual diffusion of energy efficiency technologies through energy management with the real time availability of consumption information.