Recent research from University of Delaware’s Martin Heintzelman, chair of the Department of Applied Economics and Statistics, examines consumers willingness to pay for community microgrids. Heintzelman worked with colleagues Chelsea Hotaling, a consultant with Energy Futures Group and former student at Clarkson University, and Stephen Bird, associate professor at Clarkson University, to examine this phenomenon.

The researchers asked consumers in New York to assess their willingness to pay for a microgrid that would maintain important community services during an extended power outage. Overall, consumers indicated that they were willing to pay up to $14 per year to maintain critical services for their community. Of five potential services offered, respondents indicated that they were most willing to pay for a microgrid that could maintain power for emergency services and potable water. They were less likely to pay for a microgrid to maintain retail and banking.

“I was surprised by the magnitude of the willingness to pay for these services, given that the microgrid would not provide electricity services directly to households themselves,” said Heintzelman. “I was not surprised that retail services have relatively little value relative to other, arguably more critical, services.”

Families with children, women, and respondents under the age of 50 were all more willing to pay for services maintained by microgrids. While the researchers suggest that there is some correlation between energy consumption and interest in microgrids — high energy users are more willing to pay, suggesting that they may see microgrid use as a way to help get the full grid back online sooner — they note that more research is needed to fully understand the demographic differences. 

“I expect that these results are reasonably representative of what we would expect in small to mid-sized communities, especially those in the Northeast and Mid-Atlantic,” said Heintzelman. “We do see that people who have experienced longer power outages are, in fact, willing to pay less than those who have not had that experience. This suggests that those with these experiences may be less afraid of the impacts than those who have not, who may have some fear of the unknown.” 

Heintzelman hopes that utility providers and policymakers will realize the value that communities place on emergency preparedness and use this study as a guide to evaluate the use of microgrids. After decades of storms of increasing frequency and intensity, these networks have emerged as an important opportunity for community resilience.

“This study has the potential to help policymakers understand how consumers value the benefits of microgrids when evaluating proposed projects,” said Heintzelman.