Renewable Energy Sources in Crete: Economic Valuation Results from a Stated Choice Experiment

The paper investigates the preferences and economic valuations of individuals about renewable energy sources for electricity production in the island of Crete. To estimate the monetary value of the social costs and benefits associated with renewable energy programs, we use stated preference data collected via a choice experiment. Focus is placed on the following key likely impacts of renewable energy production methods as alternatives to traditional ones based on fossil fuels: (a) environmental impact on landscape, wildlife, noise levels and quality of air, and (b) economic impact on employment and electricity prices. We apply choice models to analyze the preference structure of residents for alternative impact scenarios that correspond to a mixture of wind, solar, hydro and biomass power installations. The main target of the modeling approach is inference about welfare valuations and their relationship with the characteristics of the participants to the choice experiment. We derive welfare estimates and detect a number of significant effects that may inform energy and regional development policies.