Accounting for preference heterogeneity among residential energy consumers

We examine the consumers´ trade-off decisions between a variety of hypothetical electricity products in Denmark. Using the stated preference data from 1012 respondents representing the Danish population, we identify four consumer segments based on consumers´ choice of electricity products incorporating consumers´ attitudes towards adoption of green electricity together with consumers´ socio-demographic variables: the value seeking consumers (38%), the green electricity preferring consumers (32%), the price sensitive consumers (21%) and the mixed renewable sourced preferring consumers (9%). The findings have implications for electricity retailers regarding how to change their marketing mix (e.g. adapt and differentiate their products) in order to address existing demand in a competitive market. For energy regulators, the findings suggest that there is a need to diversify renewable energy sources as the share of renewable energy is increasing and the expansion of renewable energy should not be dependent on importing renewables.