Consumers’ Green Energy Buying Behaviour and Intention: A Literature Review

Demographic Variables

Over the last decade, several research studies have highlighted that socio-demographic variables such as members in a household, their age, gender, level of education and income influence their green energy buying behaviour or willingness to pay (e.g., Bigerna & Polinori, 2014; Chan et al., 2011; Elmustapha et al., 2018; Kowalska-Pyzalska, 2019; Liu et al., 2013; Mosly & Makki, 2018; Yang & Zhao, 2015; Yuan et al., 2011; Zander et al., 2019). Zander et al. (2019) mentioned that young people with higher education and income are more inclined to install solar photovoltaic (PV). Mozumder, et al. (2011), Oliver et al. (2011), Lee and Heo (2016) and Zorić and Hrovatin (2012) demonstrated that a high income level positively influences residents’ willingness to pay for green electricity. Vasseur and Kemp (2015) noted that adopters of such technology are higher in income, younger and more educated than the general population. Liu et al. (2013) and Zorić and Hrovatin (2012) also obtained similar results. However, it is surprising that education has not been found significant in a study conducted by Elmustapha et al. (2018), Lee and Heo (2016) and Xie and Zhao (2018). Yang and Zhao (2015) found that women and older people show more positive behavioural intentions towards renewable energy systems, contrary to Xie and Zhao’s (2018) results. One possible explanation of the aforementioned discussion is that a higher income level tends to positively affect the consumer’s purchase intention towards GET because it is costly to install such products. People in a higher income group can afford the installation of such technology. Otherwise, the literature shows controversial and inconclusive results on socio-demographic factors. A recent Meta review on renewable energy suggests that socio-economic profiles or differences have only a minor influence on willingness to pay (Ma et al., 2015).

Psychological Variables

Environmental psychology related factors: Several scholars have analysed consumers’ behaviour from the perspective of environmental psychology because people guide their green energy purchase decisions on account of concern for the environment, environmental knowledge and environmental benefits. Consumers who are concerned about environmental issues tend to form positive attitudes and behavioural intentions towards green energy systems (Aggarwal et al., 2019a; Hartmann & Apaolaza-Ibáñez, 2012; Lin & Syrgabayera, 2016; Oliver et al., 2011; Paladino & Pandit, 2019; Shakeel & Rahman, 2018; Thøgersen & Noblet, 2012). In contrast, Irfan et al. (2020b), Jabeen et al. (2019) and Sun et al. (2018) demonstrated that consumers’ concern for the environment do not significantly affect their purchase decision for green energy. The reason can be linked to the lack of government efforts towards informing people about environmental issues and their accountability in developing a clean environment.

Van Dael et al. (2017) stated that easy access to decisive information improves knowledge and creates a positive perception that leads to a higher intention to use green energy. Thus, a consumer’s environmental knowledge and awareness level is another crucial determinant that plays a determining role in their decision-making processes for the acceptance of green energy (Engelken et al., 2018; Kesari, et al., 2018; Korcaj et al., 2015). The knowledge about green energy systems positively influences the consumer’s behavioural intention as they understand the overall benefits of using such technologies (Alam et al., 2014; Chen et al., 2016; Lin & Syrgabayera, 2016; Liu et al., 2013; Xie & Zhao, 2018). Parkins et al. (2018) suggested that an individual with a higher knowledge level has a higher chance to understand the environmental issues or concerns associated with conventional energy sources and is more likely to value the environmental benefits of using GETs. Environmental benefits (e.g., reduction in air pollution) of using such technologies significantly influence the consumers’ buying behaviour (Claudy et al., 2013; Hartmann & Apaolaza-Ibáñez, 2012; Zander et al., 2019). Consumers’ warm glow feelings, as a moral satisfaction, arise from their contribution to the environmental collective good and increases their attitude towards the installation of rooftop PV and their intention to purchase a green energy brand (Hartmann & Apaolaza-Ibáñez, 2012; Sun et al., 2018). Venugopal and Shukla (2019) suggested that consumers who do not understand their moral obligation to reduce ecological problems and run from their environmental responsibility show less willingness to pay for renewable energy. Consumers who reflect concern for the environment or better understand environment-related problems show a higher degree of environmental involvement (Paladino & Pandit, 2019). Additionally, the responsibility toward environmental protection also motivates them to perform green energy buying behaviour (Kesari et al., 2018).

Personal norms: It is worth mentioning that moral or personal norms (e.g., feeling of personal responsibility for environment protection, concern for the environment and awareness about negative consequences of using excess fossil fuels for energy production) motivate consumers to purchase green energy systems to meet their energy needs (Rezaei & Ghofranfarid, 2018; Yazdanpanah et al., 2015). However, Jabeen et al. (2019) came up with contradictory results. Consumers with strong internalized feelings are more obliged and can differentiate between what is right and what is wrong. Thus, they are more intended towards the use of green energy (Bozorgparvar et al., 2018).

Perceived benefits: Many scholars have evaluated green energy behaviour on account of the perceived benefits of adopting GETs. Such benefits can be any type such as economic benefits, social benefits, environmental benefits, performance benefits, and improved quality of life for self and future generation (Engelken et al., 2018; Irfan et al., 2020a; Korcaj et al., 2015; Liu et al., 2013). Kim et al. (2014) demonstrated that consumers who perceive the benefits of using green energy are more likely to have a positive attitude toward its adoption. More explicitly, consumers’ perceived benefits enhance their perceived value, leading to a higher intention to use or consume green electricity (Park, 2019). Sangroya and Nayak (2017a) have elaborated such benefits in the form of consumer value, that is, functional value, emotional value, social value and conditional value associated with green energy use that plays a vital role in predicting the green energy behaviour of industrial buyers. Hartmann and Apaolaza-Ibáñez (2012) found that self-expressive benefits, such as social-visible consumption or conspicuous consumption, have less effect on consumers’ adoption intention towards green energy brands.

Recent studies in the present context suggest that variables such as perceived financial benefits and energy self-reliance benefits are essential drivers in shaping consumers’ attitudes and purchase intentions towards GET (e.g., Solar PV) (Eagle et al., 2017; Engelken et al., 2018; Korcaj et al., 2015). Claudy et al. (2013) explored these benefits in terms of cost-saving and independence from conventional energy sources. In contrast, perceived risks, that is, operational risks and financial risks, have been viewed as significant barriers. Furthermore, these barriers negatively influence the consumer’s behavioural intention because they lower the perceived value attached to green energy consumption (Arroyo & Carrete, 2019; Claudy et al., 2013; Park, 2019).

The diffusion of innovation model and energy behaviour: Drawing on the diffusion of innovation model developed by Elmustapha et al. (2018), Kapoor and Dwivedi (2020) and Rogers (2003) highlighted that the relative advantage of using green energy and its compatibility or observability attributes significantly predict consumer’s behavioural intention to adopt solar power systems. Furthermore, Elmustapha et al. (2018) show that adopters perceive the green energy systems as being relatively advantageous, less complex and more compatible with their values than non-adopters. Various studies concluded that consumers recognize the comparative advantages of renewable energy use, which positively influence their usage intention (Alam et al., 2014; Jabeen et al., 2019; Rezaei & Ghofranfarid, 2018). Authors such as Chen (2014), Sun et al. (2018) and Wolske et al. (2017) noted that non-adopters with innovativeness characteristics are more inclined towards the use of solar products. In comparison with non-adopters, Elmustapha et al. (2018) suggested that adopters show high novelty-seeking behaviour towards such technology. Furthermore, early adopters show a high level of technology affection that positively affects their purchasing attitudes towards green energy systems (Engelken et al., 2018). This suggests that marketers should target those consumers who are more attracted to innovations. Figure 2 summarizes some notable factors influencing consumer behaviour toward GETs.

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Figure 2.

Notable Factors Influencing Consumer Behaviour Toward Green Energy Technologies/Systems.

The theory of planned behaviour and energy behaviour: According to the theory of planned behaviour (TPB), behavioural intentions determine actual human behaviour and assume three antecedents of intentions: attitudes as behavioural beliefs, perceived behaviour control indicates control beliefs, and subjective or social norms represents normative beliefs and also their interactions (Ajzen, 1991).

In the context of green energy, attitudes, subjective norms (SBNs) and perception of behaviour control constructs (Aggarwal et al., 2019b; Bozorgparvar et al., 2018; Engelken et al., 2018; Irfan et al., 2020a; Jabeen et al., 2019; Murray, 2012; Reyes-Mercado, 2017; Rezaei & Ghofranfarid, 2018; Shakeel and Rahman, 2018; Yazdanpanah et al., 2015; Yun & Lee, 2015) collectively form consumers’ adoption intention of GETs, which, in turn, influence their actual purchase behaviour (Litvine & Wüstenhagen, 2011; Paladino & Pandit, 2019). Specifically, attitude forms when a person associates positive or negative outcomes with specific resulting behaviour. The positive results of performing green energy behaviour can be defined in terms of its benefits, such as energy self-reliance, high environmental quality and improvement of the overall welfare of the human being. On the other hand, negative attitudes formed when a person perceives that the initial investment cost is higher in GET, unreliability about service providers the and many risks of altering one’s house to install such technology (Shakeel & Rahman, 2018; Wolske et al., 2017). Jabeen et al. (2019) recommended that the adoption of GETs offers long-term economic benefits because it produces energy for the distant future without involving extra cost. Prior studies indicate the positive causal association between consumers’ attitudes and behavioural intentions to purchase GETs such as solar PV, bioenergy and solar water heaters (Abreu et al., 2019; Claudy et al., 2013; Engelken et al., 2018; Halder et al., 2016; Jabeen et al., 2019; Kim et al., 2014; Korcaj et al., 2015; Paladino & Pandit, 2019; Yazdanpanah et al., 2015). It is worth saying that the more positive attitude towards the consequences of using GET, the more the chances of it positively influencing the consumer’s purchase intention. Since the investment in GETs at the early stage is much greater than conventional energy sources, this might change an individual’s positive intention into non-performance of actual behaviour.

Another important component of the TPB is perceived behavioural control (PBC). It consists of both internal and external PBC (Notani, 1998). Basically, external PBC is a contextual or situational factor on which consumers have little control while performing a buying behaviour. On the other side, internal PBC shows an individual’s perceived power representing his intrinsic motivation or resources, that is, knowledge, skills, ability, confidence and planning need to act a particular behaviour (Notani, 1998). Several studies supported the claim that PBC is an influential factor of a consumer’s intention to purchase green or renewable energy technology (e.g., Alam et al., 2014; Bandara et al., 2018; Chen et al., 2016; Engelken et al., 2018; Paladino & Pandit, 2019; Razaei & Ghofranfarid, 2018; Yun & Lee, 2015; Yazdanpanah et al., 2015). Halder et al. (2016) observed that perceived behaviour control negatively influences students’ purchase intention toward bioenergy in the Indian sample, while it has a weak association in the Finland sample. This suggests that Indian consumers face numerous internal and external barriers during the purchasing of green energy systems. Abreu et al. (2019) have shown that subconscious control beliefs have no significant impact on solar PV adoption intention. Korcaj et al. (2015) reported a weak association between PBC and the adoption intention of solar PV because consumers face some obstacles such as a lack of required money and a suitable roof to install such technology. External PBC and SBNs factors are discussed in the next section.

Technology Acceptance Model and energy behaviour: This model suggests that people’s perception of a technology’s usefulness (PU) and its ease of use (PEOU) determine their attitude and behavioural intention toward adopting such new technology. Alam et al. (2014) describe PEOU as the extent to which users easily understand how technology operates and is maintained. Also, GETs have great potential to improve the consumer’s performance by providing a continuous supply of energy at an overall reduced cost in the long run. In this regard, Kapoor and Dwivedi (2020) stated that using solar equipment can contribute to a healthier environment and reduce electricity costs. Although, it depends on the context whether consumers perceive GET use as easy and complicated. When GET, for example, solar water heaters, are perceived as being less complicated, it is more likely that they will be adopted (Aggarwal et al., 2019a; Elmustapha et al., 2018; Kardooni et al., 2016). Alam et al. (2014) and Tsaur and Lin (2018) also stated that when a small-scale GET is perceived as being easy to use, understand and maintain, it is more likely that the users will form positive intentions to purchase such technology. Although producing and using green energy is expensive, it is cost-effective in the long run (Kapoor & Dwivedi, 2020). Previous studies have demonstrated that a GET’s perceived usefulness is an essential determinant of consumers’ purchase intention (Aggarwal et al., 2019a; Bandara et al., 2018; Kardooni et al., 2016; Tsaur & Lin, 2018).

Contextual Variables

Many contextual factors (e.g., infrastructure and financing mechanisms) might promote or hinder the performance of green energy buying behaviour because these factors substantially affect consumers’ actual behaviour performance. For instance, Kim et al. (2014) stated that solar energy technology’ quality is a significant variable in shaping positive consumer attitudes. The resulting positive attitude further leads to a higher intention to use such technology. Existing facilitating conditions such as organizational and technical support provided by green energy marketers significantly influence people’s usage behaviour (Vasseur & Kemp, 2015). More specifically, Lau et al. (2020) have indicated that facilitating conditions such as resource availability, that is, money, time, effort, expertise and after-sales service to install and maintain GET, positively influence consumers’ behavioural intentions. The variable ‘facilitating conditions’ is conceptually similar to the perceived behaviour control component of Ajzen’s theory. The subsequent section will discuss PBC-related literature. Yun and Lee (2015) suggested that perceived system quality and technical support provided by vendors are the fundamental determinants of consumers’ attitudes and control beliefs. They further mentioned that providing technical guidance is more critical than just promoting system reliability. Sangroya and Nayak (2017b) asserted that the functional value, such as the operational or physical performance of energy technologies, is a significant predictor of consumer buying behaviour.

Studies conducted in rural areas of developing nations suggest that a lack of access to electricity (Jabeen et al., 2019) or energy poverty (Bhide & Monroy, 2011; Urpelainen, 2016) motivates people to use GETs to meet their daily needs. Several case studies consider external barriers and government-policy-related aspects that strongly influence the rapid development of the green energy market (Dutta & Dass, 2020; Kabir et al., 2018; Qureshi et al., 2017; Yadav et al., 2019; Zhang et al., 2012).

Rai et al. (2016) suggested that marketers and neighbours who are already users of green energy should provide valuable information to potential consumers to overcome barriers and uncertainties associated with adopting such technology. Similarly, Dutt (2020) also found that a lack of government efforts in disseminating general and also technical and useable information among the community is a significant hindrance in the diffusion of solar PV. Financial and institutional impediments, such as lack of access to credits and inadequate technical, geographical and commercial information, strongly influence buyers’ green energy purchase decisions (Bhide & Monroy, 2011; Harish et al., 2013). Furthermore, they found that the continuous supply of power is the fundamental driver of the adoption in low-income families despite the high relative cost of such technology. Other external variables such as external PBC, social norms/social influence, perceived overall cost and government support associated with the purchase of GET also significantly influence consumers’ green energy buying behaviour.

External perceived behavioural control: External PBC represents an individual’s beliefs towards his/her ability to deal with external barriers that is, time, opportunities and financial resources required to perform a specific action (Notani, 1998). As discussed earlier, previous studies have presented contradictory findings on the association between PBC and intention to purchase GETs. Therefore, the external and internal PBC should be treated as distinct determinants of purchase intention and actual behaviour. Because, for instance, when a person has enough purchasing power, he may intend to purchase a particular technology, but if he/she does not have the required knowledge or skills and opportunities to operate that technology, he/she will be reluctant to buy it for fear of facing problems.

Subjective norms: Korcaj et al. (2015) define SBNs as the influence of others who are close to an individual, for instance, family members, close friends, social groups, neighbours and co-workers. The pressure from close ones plays a crucial role in shifting purchase decisions specifically in a collective culture. Paladino and Pandit (2019) demonstrated a positive influence of SBNs on people’s behaviour. In a cross-cultural study, Halder et al. (2016) concluded that SBNs strongly influence the adoption intention of bioenergy among Indian students than that of Finland students. Social influence should be considered a solid determinant of consumers’ intention to adopt green energy (Korcaj et al., 2015). Besides, several studies have validated that SBNs positively influence consumers’ intention to use/adopt/install GETs (Abreu et al., 2019; Engelken et al., 2018; Irfan et al., 2020b; Korcaj et al., 2015; Liu et al., 2013). However, based on a meta-analysis, Armitage and Conner (2000) identified the SBNs construct as a weak antecedent of intention among the TPB’s variables. Rezaei and Ghofranfarid (2018) also indicated that villagers’ perceived pressure from friends, family and others has no connection with their intentional behaviour toward such energy. Yazdanpanah et al. obtained a similar result in 2015. The TPB’s SBN component is conceptually an injunctive norm because both address perceived social pressure (Rivis & Sheeran, 2003). In contrast, the descriptive norm refers to the ‘perceived prevalence of others’ actual Behaviour’ (Chen et al., 2016). Fornara et al. (2011) and Rivis and Sheeran (2003) suggested that both norms are different and individually predict green behaviour. The reason behind the conflicting results in the present context is that existing studies have used mixed items of both norms while measuring SBNs (Korcaj et al., 2015).

Perceived overall costs and government subsidy, and energy behaviour: The development of renewable/green energy power market largely depends upon supportive government policies such as subsidies, rebates or credit, which help in bringing down the cost of renewable energy (Alam et al., 2014; Harish et al., 2013; Schelly, 2014; Tripathi et al., 2016; Yang & Zhao, 2015; Zhou et al., 2017). The high initial cost is a significant barrier for the diffusion of GETs in emerging as well as developed countries (Bhide & Monroy, 2011; Claudy et al., 2013; Dutta & Dass, 2020; Huijts, et al., 2012; Kabir et al., 2018; Schelly, 2014; Zhang et al., 2012). Since 2010, the world’s high-income countries have witnessed rapid growth in their green energy market (IRENA, 2020). The diffusion or social acceptance of green energy can be enhanced by making an appropriate balance among its three dimensions: ‘socio-political acceptance’ (i.e., government assistance), ‘community acceptance’ (i.e., local support) and ‘market acceptance’ (i.e., adoption intention) (Van Dael et al., 2017). The adoption of such technologies carries a high level of initial costs and functional risks, which negatively influence the consumer’s purchase attitude and intention (Claudy et al., 2013; Irfan et al., 2020b; Jabeen et al., 2019; Kardooni et al., 2016; Kim et al., 2014). Some indirect costs are also attached to the procurement of these technologies, such as an inconvenient and tiresome process of availing the benefit of government subsidy, lack of access to credit and insufficient general or technical information availability, and non-monetary efforts and risks (Dutt, 2020; Korcaj et al., 2015). These perceived overall barriers may prevent consumers from purchasing GETs, even if they have a positive attitude and buying intention. At the same time, Zander et al. (2019) noted that the reduction in subsidies dissuades respondents from installing a solar system. Sun et al. (2018) stated that the availability of government incentives has a significant positive influence on consumers’ intention to adopt solar PV. The subsidy is a financial incentive or monetary benefit that persuades the final consumer to purchase GETs (Elmustapha et al., 2018). Therefore, consumers’ perception of high initial cost and convenience-related issues of GETs can be addressed by providing subsidy incentives and smooth flow of required information and infrastructures.

Findings from a working paper by Rose et al. (2015) suggested that a lack of regular access to energy or energy poverty encourages people to move towards GETs as adopting such technologies makes them self-reliant. High initial cost, inadequate financing mechanism, lack of necessary infrastructural support and information asymmetry regarding GETs are still significant issues that make potential consumers/investors reluctant to purchase sustainable energy technologies (IPCC, 2011; IPCC, 2023; Mitchell et al., 2011; Sarangi, 2018; Sarangi & Taghizadeh-Hesary, 2021; World Bank, 2013). Likewise, insufficient local green financing, non-availability of complete information about technicality and feasibility, unskilled workforce and high upfront cost are the problems identified by Liu and Noor (2020), Shadrina (2019) and Malik et al. (2018) that discourage green energy providers from investing in the Central Asian countries, ultimately affecting the behaviour of final consumers. Peimani (2018) and Heffner et al. (2013) in their research work found that financial factors (e.g., the cumbersome process of getting finance) and lack of awareness about the unsustainability of conventional energy sources are the factors that decide whether the people of a country will adopt GETs, specifically in the Asian context. Market conditions can be accommodated by addressing consumers’ concerns about the financial constraints or the high cost of GETs (IPCC, 2011; United Nations, 2018). Altsitsiadis et al. (2024) demonstrated that perceived benefit and cost, trust in technology, trust in various stakeholders, perceived risks, attitudes and personal values about GETs are the fundamental individual-level psychological factors that influence social support of such products. The long payback period is another significant barrier that discourages consumers from purchasing green energy systems (Heffner et al., 2013; IPCC, 2011; Mitchell et al., 2011). High prices and people’s unawareness regarding the consequences of their unsustainable consumption behaviour (means that they are not aware if they do not recycle), have been identified as the major barriers that limit the adoption of GETs (Baddeley, 2011; Mitchell et al., 2011).

Policymakers and marketers need to understand the psychology of individuals behind making purchase decisions towards energy consumption so that it can be illuminated what kind of cognitive, affective and behavioural beliefs influence their purchase choices (IPCC, 2023). Raising consumer awareness and engagement and activating social norms about green energy use can be one way to motivate consumers about sustainable energy consumption (Baddeley, (2011; Core Writing Team, 2014). Yu et al. (2018) conducted a survey in the United Kingdom and found that higher perceived costs and lower objective knowledge make consumers not support the deployment of low-carbon technologies. In 2012 and 2015, Pollitt concluded that increasing society’s willingness to pay or bear the higher cost of green energy alternatives is the primary solution to move towards low carbon energy transition, no matter what the extent of government support or interventions (Pollitt, 2012, 2015). He and Reiner (2018) contended that policies focusing on simplifying energy tariffs, enhancing conveniences and improving consumers’ concerns about environmental problems can develop a positive attitude toward switching energy suppliers. Dissemination of widespread essential and up-to-date information about financing, technicality, and economic and ecological benefits of using GETs is necessary so that consumers can make informed purchase decisions (Core Writing Team, 2014; Mitchell et al., 2011; United Nations, 2015b). In line with the United Nations’ (2015b) report, Mehta (2019) stated that governments around the world are required to provide a smooth procedure to get incentives or to subsidy benefits and deliver useful information about the interconnection between green energy, the environment and human life to potential customers. While assessing the role of small-scale solar, Jacquot et al. (2021) concluded that the timely and smooth distribution of subsidies at the remote level helps people think about purchasing GETs. It also allows green energy providers to create new demand hubs.

A supportive policy environment, knowledge sharing or a new business model (i.e., public-private partner) can help to increase the diffusion of GETs or sustainable energy options (ESCAP, 2017; Core Writing Team, 2014; United Nations, 2017; United Nations, 2018). In addition, consumers’ preferences and behaviour can be diverted towards green energy consumption by raising their awareness regarding the benefits of using/adopting GETs (Core Writing Team, 2014; United Nations, 2016). This can be done through media campaigns, workshops, seminars and website information portals (United Nations, 2019), and by instilling a culture of green energy use (e.g., how GET adoption will fulfil a person’s self-defined green identity) (IPCC, 2023). Knoll-Csete (2023) demonstrated that religious leaders (e.g., the Pope) can preach on the interconnection between human life and plants, thus creating a culture of preserving natural resources. Barbier (2023), Liu and Noor (2020) and Sen et al. (2020) submitted that countries, specifically the G7, should focus on phasing out fuel subsidies and giving more attention to assisting emerging markets and developing countries to phase in carbon pricing and other policy solutions to accelerate their green energy transition. A report published by World Energy Council (2013) contended that there is no ‘one-size-fits-all’ solution to improve energy efficiency. Instead, region-wise, a clear and stable legislative framework is required to deploy renewable energy technologies effectively.