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Abstract
The sale of “green power” (electricity generated using renewable energy sources such
as wind, solar or geothermal power) to non-residential customers at a premium is one of
several market-based approaches for supporting renewables. Why would profit-maximizing
firms or budget-conscious institutions be willing to increase their own costs so as to provide
environmental improvements which benefit everyone? The literature offers several possible
motivations, including increasing “green” market share, public image enhancement and preemption
of more stringent environmental regulation. This article tests the hypotheses that (1)
firms and institutions purchasing green power are primarily motivated by the private benefits
associated with making such a contribution; and (2) participating firms and institutions favor
voluntary programs over more direct policy approaches to supporting renewables, such as
taxation. Hypotheses are tested using data from a nationwide mail survey of non-residential
green power customers. The results of this empirical analysis do not support either of the
research hypotheses.