Assessing public perception and willingness to pay for renewable energy in Pakistan through the theory of planned behavior

Abstract

With growing urbanization and increasing world population, energy demand also increases. A significant portion of the world’s energy comes from fossil fuels, and these sources of energy are declining rapidly at the current consumption rate. There are also growing environmental concerns on the use of fossil fuels increasing greenhouse gas emissions. In this regard, renewable energy (RE) shows promising solutions which are both sustainable and environmentally friendly. Developed countries and leading organizations are investing heavily in the RE sector. However, the developing world has anxieties over social acceptability and people’s willingness to pay for renewable energy. This study is conducted in Pakistan to understand the public perception and willingness to pay. The Theory of Planned Behavior (TPB) was utilized with background factors such as awareness, perceived advantages, perceived challenges, and moral obligations to examine its influence on people’s willingness to pay. In addition to this, the study also assessed the indirect effects of background factors (awareness, perceived advantages, and perceived challenges) on willingness to pay through public attitude. Furthermore, the indirect relationship between background factors (awareness and moral obligation) and willingness to pay through subjective norms was also examined. A total of 512 samples were gathered from participants and were analyzed through partial least square–structural equation modeling (PLS-SEM) and SPSS. The study findings are very interesting and back up our hypotheses that the background factors (awareness, perceived advantages, and perceived challenges) are positively associated with public attitude and have an indirect effect on willingness to pay through public attitude. Similarly, variables such as awareness and moral obligation are negatively and positively associated with subjective norms, respectively. However, the variables, awareness and moral obligation, have no indirect relationship with willingness to pay through subjective norms. Additionally, the study reveals that the components (attitude and perceived behavior control) of TPB have a significantly positive effect on willingness to pay. The study also concludes that the participants having formal education and knowledge about climate change and renewable energy are inclined toward green energy and are willing to pay, and they are hardly influenced by others’ opinions. Furthermore, the study also provides insights for policymakers, suggestions, and recommendations for the future.