Aims to analyze economic and psychological factors and renewables' attributes to foster its diffusion and adoption in households.
This proposal aims to analyse the diffusion and adoption processes in reference to technological innovations in renewable energy by households in emerging economies and suggest alternative modelling to support corporate marketing strategy and energy policy formulation.
Current global economy relies on fossil fuels in more than 80 per cent of primary energy production and households use almost a quarte of total energy. Because of their detrimental features the main challenge to current energy policy makers and corporate strategists is to develop suitable energy options that allows the transition to a green economy. Because green energies take naturally present inputs they have been suggested to be a feasible way to accelerate such transition. As there are similarities in the households’ energy consumption mix in emerging economies, this proposal would significantly contribute to foster the renewables adoption. Only by adoption renewables the current economic paradigm based on fossil fuel will change.
However, diffusion and adoption processes for renewable energy technological innovations need immediate clarification since there is a gap between the positive attitudes towards green energy and the actual modest rates of renewable energy based-service’s up-take.
The main research questions to be investigated in this proposal include:
- What are the relevant socio-economic factors, behavioural factors, and product attributes that influence the households’ diffusion and adoption of renewable energy technological innovations?
- What are the barriers to adoption of renewable energy innovations?
- What facilitating processes can be identified to foster the diffusion and adoption of renewable energy technological innovations?
Results would be discussed in reference to both, marketing practitioners and energy policy makers in the form of facilitating processes that foster the diffusion and adoption of renewable energy innovations.
Category of the action
Decarbonizing energy supply
What actions do you propose?
Technological systems are not separated from social systems. Instead, they are highly related. Therefore, feasible actions involve a variety of analysis to understand the context, actors, and actions in one socio-technological system.
The first step in deploying renewables at a higher level is to analyze the socio-economical context of households in emerging countries. Energy may represent a critical production factor for some countries in spite of the use of labor and capital. Socio-economical context in emerging economies is associated to poverty, lack of education, health, food, and self-empowerment opportunities.
Second step is to understand the economic factors, as transaction costs, economic value of the renewables in comparison with traditional fuels, switching costs (in terms of time and effort of switching from fossil fuel to a renewable energy system. Importantly, the fit between family budget and cost of renewable is a critical variable that determine adoption of renewables.
Third, the cognitive factors of consumers may hinder or foster the adoption of technological innovations in renewable energy. The analysis of current consumer knowledge, the awareness on climatic challenges and the purchase intention have impact on the adoption of technological innovations. These variables should be analyzed to gain knowledge of the personal barriers and facilitating processes at individual levels. Additionally, it is possible to include in the analysis the revealed preferences that previous experiences on renewables’ adoption may provide. The social network of the consumer should also be analyzed as subjective norms, consumption habits, social ties, and risk preferences impact the consumer decision. It is interesting to note that consumption habits in energy are highly inertial because energy industries resemble near-monopoly markets in which only a few players participate. Thus, it would be expected that consumers rely on their social support system to make adoption decisions.
Fourth, the attributes of technological innovations in renewable energies are also to be analyzed. The previous is needed since householders perceive certain attributes as valuable while other may be unimportant to them. Attributes as quality of the energy supply, convenience, availability, serviceability value for money impact the consumer decision on adoption an alternate energy system. Energy is a service of very low consumer involvement, thus, this feature has to be taken into account in analysis to gain insight about the nature of the decisions consumers make about energy services.
A final step in analyzing the critical variables that impact the associated behavior of households in reference to energy is to gain knowledge on the existent relationships among all variables. Such relationships may shed light on the patterns that guide consumers’ decisions.
Once the relevant variables have been identified, it is needed to gather data focused on the particular context of the emerging economy. A structured questionnaire as a data gathering instrument may be deployed. A causal research would be used to provide evidence of cause-and-effect (causal) relationships among the variables, test the hypotheses, which implies validating the research framework. Specifically, an experimental design is proposed because it allows specifying the dependent variable, independent variables, and extraneous variables.
Data results should be interpreted in such terms in indexes about the willingness to adopt technological innovations in renewable energy in order to be presents to a variety of stakeholders as primary data to support corporate and energy policy decision making.
Who will take these actions?
In the energy field a number of disciples converge, thus, a variety of stakeholders need to participate if any effort in deploying renewables in emerging economies is to succeed. A triple helix project management would be a preferred path to develop this proposal.
First, universities may engage in the theoretical aspects and review of previous experiences of the study that shed light to policy makers and corporate strategists. As they possess strong methodological background, they could build a strong research case to be deployed.
Second, Non-government organizations that know relevant local contexts may engage in collecting data to feed the analysis upon which decisions will be made.
Third, energy policy makers can base their decisions on the basis of strong evidence relevant to their local contexts. The willingness to pay, the consumer support in the form of subsidies to production or consumption of renewable energy, pricing, relationship with other social and economic government program may give high local value to energy policies.
Fourth, corporate strategists may use the survey results in different energy conversion. From product/service design, to advertising, pricing strategies, customer relationship.
Finally, Non-government organizations may use results to build local capacities for local stakeholder in such a way that a sustainable growth of renewables is achieved.
Where will these actions be taken?
This proposal is intended to be deployed in Mexico as it is an emerging country which recently set the high the goal of achieving a 24% usage of renewable energy into the overall energy mix for the year 2024. Data available is unclear about the roadmap to reach such level. Therefore, it is intended that this proposal be deployed in Mexico as a first step. Later, other countries, mainly BRICS, may be included.
What are other key benefits?
In contrast to fossil fuels, renewables generate positive externalities as green jobs, better air conditions, improved health as reported by previous experiences.
What are the proposal’s costs?
This proposal is based on the cost and effort of about 6 FTEs with an overall cost of about $150,000.00 USD.
This proposal is expeted to be finished in the time line of 1 year.
This proposal is based in the dissertation proposal of the author to be defended in next July. Draft is available to reviewers upon request.