Consumer Acceptance of Renewable Energy in Peninsular Malaysia

Abstract

Renewable energy (RE) is a type of advanced technology that changes natural energy into a form that can be used as an alternative to traditional energy solutions to help reduce problems caused by global warming. Nevertheless, consumers still have limited knowledge of renewable energy, which leads to an unwillingness to pay more. Renewable energy marketing as a sustainable willingness to pay more for renewable energy billpayers in Peninsular Malaysia. This research applied the theory of reasoned action as the theoretical underpinning theory. A questionnaire survey was distributed to taxpayers, and 3209 usable responses out of 5000 persons were obtained. This paper suggested that consumers’ concerns and knowledge of renewable energy were positively related to paying a premium for renewable energy. This research showed that the energy consumption patterns influenced consumers’ willingness to pay more for renewable energy. This will benefit policymakers, in line with the Twelfth Malaysian Plan, in pursuing green technology growth and recommending the policy measure to achieve the country’s 31% and 40% renewable energy targets in 2025 and 2035, respectively.

1. Introduction

The development of the world, with increasing populations, growing economies, and rapid infrastructure developments, has led to a significant increase in energy consumption in recent periods and with respect to expected future forecasts. In this scenario, fossil fuels such as coal, petroleum and gas play a major role in meeting energy demands, providing more than 80% of the energy consumption. Most of the world’s energy demand is met through fossil fuel resources, which are the main contributors to environmental pollution and global warming. Mining and the use of coal cause soil erosion, habitat loss, water pollution, and acidic soil. The process of oil and gas production causes the burning of fossil fuels and releases a large amount of carbon dioxide into the air. This situation is aggravated by using petroleum in the combustion processes of car engines, which also contributes to the release of carbon dioxide [1]. Greenhouse gases, the majority of which are carbon dioxide gas, have resulted in heat in our atmosphere, contributing to global warming.

Alternatively, renewable energy (RE) uses advanced technology to change natural energy into a form that can help diminish the problems caused by global warming [2]. As technology improves, RE resources need improve. Using the sun, wind, and water as energy sources can be more helpful. Wind and solar energy are two types of renewable energy that are always advancing. One good thing is that there will never be enough resources for energy that cannot be reused and that are not renewable [3]. RE comprise energy that lasts long and does not run out. Moreover, the environment in RE is cleaner and friendlier. Humanity’s concerns about pollution and climate change have made them more aware of the environment; this has pushed governments, especially in developed countries, to make rules to protect and preserve the environment [4]. We know that RE sources can be reused and pollute less than fossil fuels. People and the environment can both be harmed by using fossil fuels. An excessive amount of carbon dioxide gas in the atmosphere will raise the temperature of the Earth and make it harder to breathe. The Earth’s environment will be saved if we use fewer fossil fuels, and more RE. Climate change and local air pollution are two main driving forces for the global energy transition.

Gielen and co-workers [5] say that in countries like China and India are heading in the cause of air pollution. However, in Europe, people are also paying more attention to the harmful effects of air pollution on health, which are related to how energy is produced and used. The analysis showed that global economic activity has to cut CO₂ emissions by 85% from 2015 to 2050 [5]. The energy transition must reduce emissions to ensure enough energy for economic growth. Malaysia covers 329,847 km² and is expected to have 32.6 million persons in 2019 [6]. Consumers are becoming more worried about whether the Earth’s resources will keep up with the standard of living. The amount of energy used by humans is their biggest concern. Consumers are concerned about the environment and energy use and do not want to pay more for RE [7]. However, the study by Bang and co-workers [8] looked at how consumers felt about paying more for RE based on how concerned they are about the environment, how much they know about RE, and what they believe. Bigerna et al. [9] argued that if consumers have a favourable opinion of RE technologies, this will influence their willingness to pay (WTP), increasing the premiums they are likely to pay for this new technology and reducing the need for public support. Considering RE is a new technology introduced to the public, there is a chance that it will not be well received. This is because RE technology requires time to mature due to an initially high installation cost and requires government assistance through incentives. When the time comes, new technology of RE can be accepted as “energy justice”, and Goal 7 of Sustainable Development Goals (SDGs) can be achieved (affordable and clean energy), where low to high-income individuals can have access to power. Furthermore, increasing awareness among consumers will create more demand for RE. Therefore, it will lead to more supply of RE in society.

This paper examines the relationship between consumer concerns, knowledge, beliefs, and attitudes toward RE among billpayers in Peninsular Malaysia. The theory of reasoned action was used as a framework for this study, which is adapted from the research by Bang et al. [8]. On the other hand, it was a great chance to learn about how consumers in Malaysia are becoming more aware of and interested in RE technology. The expected results of this research will help government groups such as policymakers, investors, and marketers, which is good for the growth of RE in Malaysia now and in the future. Furthermore, the contribution of this study would help Malaysian policymakers develop more effective policies and strategies to encourage and promote the usage of renewable energy among billpayers in Malaysia. In addition, this study can educate Malaysian consumers about green renewable energy, enhancing the quality of life and creating awareness among Malaysian residents.

2. Literature Review

2.1. Current Status of Mix Energy in Malaysia

Malaysia’s power generation has relied heavily on fossil fuels since 2013. The capacity data showed that 88.4% of power came from fossil fuels, 11.4% came from hydropower, and 0.2% came from renewable resources [10]. Malaysia had a good mix of gas, coal, and renewable energy sources. The 12th Malaysian Plan (2021–2025) has a section on environmental sustainability that mentions topics such as blue technology, green technology, RE, and adapting to and reducing the effects of climate change [11].

Malaysia’s economic growth depends on how much fossil fuels are available and how much is being used. The detailed breakdown consists of 55.3% of the fossil fuels from natural gas, 30.5% from coal, 2.8% from fuel oil, and 1.8% from diesel [12]. Most of these fossil fuels are used by the power industry, and most power plants are connected by pipeline gas. Most of the time, subsidised gas prices of MYR 27.20 per million British thermal units (mmBtu) are charged to power sectors for the first mmBtu, and the market price of liquefied natural gas (LNG) is charged for the rest. Using an Imbalance Cost Pass Through (ICPT) implementation, which shows the fuel cost in the consumer’s tariff, the cost of fuel for power generation is passed on to consumers.

The hydropower plants in Malaysia are more than just places for obtaining energy. They also play an essential role in social and economic development, such as watering crops, keeping the landscape in good shape, and replanting disturbed soils when there is less rain than usual. Malaysia has substantial potential and water resources availability because it has high temperatures and humidity all year long and experiences rainfall. Large hydropower plants provide electricity to many people, while small-sized plants and individuals even run “micro” hydropower plants for their own energy needs or to sell power to utility companies [13]. Micro-hydropower plants are smaller in capacity, from 5 kW to 500 kW.

On the other hand, small hydropower stations are better because they can use streams and rivers to make electricity that can be sent to rural and remote areas. Small hydropower stations usually take less than 30 MW and operate in a market that has been opened. This means that they can be built by any private developer and are encouraged mainly by the Sustainable Energy Development Authority (SEDA) of Malaysia’s Feed-in Tariff Program (FiT) system [14]. The grid-connected small hydropower plants that produce less than 30 MW are only considered under the FiT program.

2.2. Status of Renewable Energy Sector in Malaysia

Recognising the benefits and significance of RE, the Malaysian Government has enacted several policies and initiatives to assure economic, energy, and environmental sustainability [15]. Since renewable energy was added as the fifth fuel in 2001, the Malaysian government has implemented policies, programs, and incentives to encourage more people to use it. Since 1999, Malaysia has worked on a few critical projects, such as the Malaysia Industrial Energy Efficiency Improvement Project (MIEEP), Small Renewable Energy Power Program (SREP), Biomass-based Power Generation Demonstration Project (BioGen), Building Energy Efficiency Program (BEEP), Malaysia Building Integrated Photovoltaic (MBIPV) Technology Application Project, and Green Building Index (GBI) [16,17]. Moreover, Dana Kumpulan Wang Tenaga Baharu worked with Tenaga Nasional Berhad (TNB) and the Ministry of Energy, Green Technology, and Water in Malaysia to set up funds for renewable energy (KETSA).

Malaysia’s solar programs over the past ten years have been part of the FiT scheme, which was put in place when the Renewable Energy Act was first written on 15 December 2010 [18], Net-Metering in 2016, and Large-Scale Solar in 2016. With the help of many different RE schemes, the share of RE in Malaysia’s total electricity production went from less than 1% in 2009 to 5.5% in 2015. In budget 2017, the 6th Prime Minister of Malaysia launched “MySuria” to encourage B40 (lower) income families to earn more income through this program [19]. Each family of lower income who participated in this program produced an extra revenue of MYR 250 per month by selling electricity to TNB for ten years [20].

Malaysia’s Energy Transition Plan, 2021–2040, says that the country will increase the amount of renewable energy (RE) in its installed capacity to 31% in 2025 and 40% in 2035. Datuk Seri Dr Shamsul Anuar Nasarah, the Minister of Energy and Natural Resources, stated on 22 June 2021, that the RE capacity in Peninsular Malaysia is projected to grow from the current 4430 MW to 10,944 MW in the next 15 years. He also said that solar energy had the most potential. Starting in 2030, Malaysia plans to put in place battery energy storage systems with a total capacity of 500 MW [21]. Chachuli et al. [22] pointed out that when Malaysia needed to diversify its energy sources in 2000, its energy transition had become more environmentally friendly. The energy policy was also discussed, and it was said that, over time, plans had changed to help solve climate change problems by developing renewable energy.

Table 1. Policy evolvement toward RE installed capacity in Malaysia from 2001-2017 and current (see Figure 1), reprinted/adapted with permission from Ref. [22]. Copyright 2022, Elsevier.

2001–2010	2011–2016	2017 and Current
Policy Development
2001–2010—Five-fuel diversification policy [23]	2011–2015—10th Malaysia Plan [24]	2016—Net Energy Metering (NEM) [25]
2001–2005—8th Malaysia Plan [23]	2011—Renewable Energy Act (Act 725) [26]	2017—Self-consumption (SELCO) programme [27]
2006–2010—9th Malaysia Plan [28]	2011—SEDA Act (Act 726) [29]	2017–2018—LSSPV cycle 1 [30]
2008—NREPAP [31]	2011—Feed-In Tariff programme [18]	2018—Midterm review of 11 Malaysia Plan [32]
2001—SREP Programme [33]	2011—National Biomass Strategy 2020 [34]	2018—NEM 2.0 [35]
2002—UNDP-GEF Biogen project [36]	2016—MYSURIA programme (B40) [19]	2019–2020—LSSPV cycle 2 [37]
2005—MBIPV project [38]	2016–2020—11th Malaysia Plan [39]	2020—NEM 3.0 [40]
2007–2011—Suria 1000 Programme [41]		2021–2025—12th Malaysia Plan [42]
2009—National Green Technology Policy [43]		2021—RETR 2035 [44]
2010—Economic Transformation Programme (ETP) [45]		2021—LSSPV cycle 3 [46]
2010—New Energy Policy [47]		2022–2023—LSSPV cycle 4 [48]

shows how Malaysia’s policy on developing RE has changed over time. Meanwhile, Figure 1 shows the correlation of the policy evolvement toward RE installed capacity over time.

2.2.1. Feed-in Tariff Program (FiT)

Implementing the FiT in 2011 made it possible for renewable energy sources to provide alternative energy sources, which are sufficient for supporting the country’s economic goals by 2020. Under the FiT scheme, biogas, biomass, small hydropower, and solar PV are all eligible renewable energy sources. Implementing FiT was an improved method for obtaining energy from renewable sources and for getting the country ready for a period of growth that would lead to a high-income economy. Under the RE Act, the FiT scheme gives each qualified individual or company the right to sell electricity made from renewable energy sources to the utility company, Tenaga Nasional Bhd. (TNB), at a specific price and within a certain amount of time.

The FiT deals with employment and gross national income, two of the most important economic problems in many countries such as the US, EU, Canada, Germany, and Japan. It does this by encouraging the growth of the RE industry [49]. Energy security and stopping climate change are the two other issues that FiT looks at. The FiT also helps solve tertiary problems such as social health, giving citizens and the community more power, and distributing wealth fairly. It also helps protect the environment. All of this is implemented without putting a strain on the budget and expenditure of the government. FiTs are suitable for the economy, politics, society, and the environment in many ways [50].

From an economic point of view, FiTs help create green jobs, bring in Foreign Direct Investments (FDIs) and Domestic Direct Investments (DDIs) for manufacturing and export, protect against price fluctuations in traditional fuels, and drive economic growth by giving RE investors a peace of mind and making the market more stable. FiTs also have political and social benefits, such as showing commitment to deploying renewable energy, increasing energy security and independence, promoting a more decentralised and democratic form of the electricity system, increasing public support for renewables through direct stake and more exposure to renewables, and encouraging citizens and communities to get involved in activities that protect climate and environment. FiTs are also good for the environment because they help reduce carbon emissions and pollution and encourage people to use energy more efficiently.

On the other hand, there are many disadvantages with respect to implementing FiTs. The biggest problem with FiTs is that prices are affected by many different things, making it hard to keep up with changes in the cost of RE systems and other incentives [51]. Without deviation, FiT schemes have shown to be slow to respond to changes in the price of renewable energy (e.g., the cost reductions of photovoltaic systems during the past few years). Even if there is a way to deviate from the rule, the deviation might be set at a level that does not match how RE costs have changed in real life. Moreover, FiTs do not give operators of RE any reason to react to price signals from the electricity market. Thus, FiT schemes do not make it possible for RE to work well in the market.

As part of FiTs promotion, SEDA offered the Rooftop Solar Home program for 2000 residential homes since September 2012 [51]. This was offered to get more people interested in installing solar PV. However, only about 52% of the 985 MW of RE could be reached by 2015 (1st RE target), and only 205.81 MW (40%) could be provided with solar PV. Even though only 52% of the goal was met, the rest is expected to be completed by 2020 and 2030, with 2080 MW and 4000 MW, respectively, as part of the RE Policy and Action Plan (2010). The target for the total RE capacity is tough to reach. It should be measured against the public’s ongoing awareness, willingness, and ability to use RE technology. Along with that, there is a great chance for finding out how consumers and the public in Malaysia are becoming more aware of and interested in RE technology.

Knowledge of RE among consumers in Malaysia is neither too low to be attractive for investments nor too high to avoid overcompensation (“windfall profits”) and a market development that leads to higher costs for the RE support scheme or technical problems with the electricity system. Thus, it is essential to know and keep track of how much RE projects cost. SEDA’s Figure 2 shows the total amount of renewable energy (in MW) that has been approved for Feed-in Tariffs (FiT) and has reached the FiT Commencement Date [13]. FiT has not been set at the proper levels because the public and private sectors do not have the same information, and politicians have a say in how FiT is set. The Renewable Energy Policy and Action Plan and the Renewable Energy Act, 2011 [26], provide Malaysia with the power to set up the FiT System. With this system, electricity from renewable resources found in the area can be sold to utility power companies at a fixed premium. This process can be performed by homes, community groups, or other organisations.

2.2.2. Net Energy Metering Program

Net-metering is a joint program for people who own distributed generation units; it makes up for the electricity they use from the grid by generating electricity on their property. When solar PV generation and net metering are added, the number of consumers producing and using electricity increases, negatively affecting the income of many network utilities worldwide [52].

The idea behind net energy metering (NEM) is that the energy generated by a sun-oriented solar PV system will be used first. Excess power will be exported and sold to a distribution licensee, such as TNB/Sabah Electric Sdn. Bhd. (SESB), at the prevailing displaced cost set by the Energy Commission [53]. This plan might suit all residential, commercial, and industrial sectors that use TNB in Peninsular Malaysia and SESB in Sabah and Labuan. Those PV systems can only be installed on roofs or car porches that are part of their property. Based on what FiT has implemented in the past, solar PV may be a new idea that requires little development. This technology needs little construction and has a high take-up rate compared to other renewable energy technologies. The NEM plan is a great way to add to the existing FiT and large-scale solar programs. If this NEM plan is widely used worldwide, it could help countries reach their renewable energy goals and become less dependent on fossil fuel imports.

The most significant benefit of the NEM program is that the energy made by NEM consumers is used first [25]. This means that the utility must bring in less energy. The more a solar PV system is used to power itself, the more money NEM customers can save on their electricity bills (by reducing the electricity imported from the utility). This is particularly important for people who live in areas with high electricity rates. In many countries, NEM protects against any future changes or increases in the price of electricity. NEM allows people to add value to their electricity by offering any extra electricity they generate into the grid and obtaining it later. Moreover, the solar energy system is linked to SEDA’s distribution system, which helps consumers use less electricity and supports clean energy for the future [54].

Since NEM was released on November 1, 2016, there have been three stages of development so far [22]. NEM 1.0 set aside 500 MW capacity for residential, commercial, and industrial users. However, only 27.81 MW of power has been approved, and only 9.01 MW of the total capacity project has been put into operation. SEDA introduced NEM 2.0 in October 2018, so the extra capacity could be used before 2020. NEM 2.0 helps consumers by involving national utility companies registered in Peninsular Malaysia [35], including residential, commercial, industrial, agricultural, and government buildings. Later, on February 20, 2021, NEM 3.0 came out with a new quota of 500 MW [40]. The reason is mainly because NEM 2.0 is in high demand from consumers and the solar PV industry.

2.2.3. Large-Scale Solar Program

Large Scale Solar (LSS) is a scheme that allows consumers to generate their power and sell it to the grid via a solar PV farm, with installed capacities ranging from 1 MW to 30 MW. The Energy Commission administers this program, and potential developers are selected through competitive bidding.

The Malaysian government initiated the LSS tender scheme in 2017 to replace FiT. The government assigned 200 MW of generation capacity in Peninsular Malaysia and 50 MW in Sabah in the first round of the LSS [30]. The second procurement, held in 2019, granted 360 MW to the peninsula and 100 MW to Sabah and Labuan’s islands [37]. The first round’s project size limit of 50 MW was reduced to 30 MW in the second round, which drew proposals for 1.6 GW of solar capacity at prices ranging from MYR 0.30/kWh to MYR 0.50/kWh. In January 2020, the third round of bidding was held, with five bidders vying for a 490 MW tender; all solar farms are located on the peninsula [55]. LSS can produce up to 500 MW, which is anticipated to increase the usage and sharing of renewable energy soon [22].

Unfortunately, the LSS program has several obstacles identified throughout development and operation, including changes in requirements during bidding and construction, delays in obtaining approval from authorities that result in higher expenses, and delays in work progression. A tight project timetable and a lack of building knowledge led to long working hours and quality difficulties. Moreover, the unpredictability of the Malaysian currency can increase project expenses [13].

2.3. Energy Consumption Pattern in Malaysia

Climate change is currently evidenced by the fast-growing global temperature, the vast geographical and temporal melting of ice caps, and its contribution to the world’s rising sea level, which is anticipated to inundate many coastal towns [56]. In addition, the increased carbon dioxide gas in the atmosphere contributes to global warming. Consumers are increasingly concerned about whether the Earth’s resources will continue to support the current quality of living. The usage of energy is one of the leading causes of consumer concern. Energy consumption represents the generation of electricity from fossil fuels, which contributes to increased pollution and the daily use of energy. Simultaneously, the demand for fossil fuels continues to expand, resulting in a sharp price increase. As fossil fuel energy supplies dwindle and pollution increases, governments in all nations strive to design new energy programs that are more environmentally responsible and sustainable.

Since the Malaysian government intends to remove fuel subsidies soon, sociodemographic and economic shifts have affected the nation’s energy consumption. In Malaysia, buildings consume 14.3% of total energy, and commercial and residential sectors consume 53.0% of electrical power [57]. A worst-case scenario is one in which the price of fuel (based on petroleum) and the demand for energy both rise in tandem with the price of oil on the global market. As an alternative, RE has arisen as a potential energy resource, providing consumers and businesses with options and substitute resources.

Table 2. Summary of literature on energy consumer study in Malaysia.

No.	Past Literature	Findings	Ref.
1.	An understanding of renewable technology is attained when prospective consumers can gather or have entry to essential data about the crucial usage, financial prospects, and environmental control of RE [53].	Higher technological awareness positively correlates with users’ intention to use RE.	[2]
2.	Recognising the prominence of energy as a crucial aspect of economic and social development, the government of Malaysia has been continuously reviewing its energy policy and practices to ensure long-term sustainability, reliability, and guarantee of energy resources [54].	The private sector and communities should also take a more corporate approach concerning social responsibilities and make compromises by participating in green programs and accepting more extended payback periods in RE projects. Nevertheless, endless hard work and robust community aid are crucial for certifying that RE development can achieve its highest possibility.	[58]
3.	RE development emphasises the value of society’s understanding of specific technology and the purpose of using that technology [59]	Knowledge of RE technologies has effects on the purpose of the use of RE technologies.	[56]
4.	Catoiu et al. [57] mentioned that price fairness in business practices significantly impacts consumers’ apparent product value and purchasing purposes.	Functional value price positively affects consumers’ environmental concerns, as expressed by the purchase of green products.	[60]
5.	There is a wealth of empirical evidence from studies conducted in developed and developing countries worldwide that suggest that aspects such as culture influence green purchase behaviour, value orientation, environmental concern, knowledge, attitude, and demographic factors (e.g., age, gender, income level, and so on). In addition, an incorporated theoretical framework that covers a total of eight elements or aspects of green issues that are likely to have an impact on buyer green buying behaviour has also been proposed by Kauffman et al. [61].	Kwek et al. [62]; Ooi et al. [63] found that environmental knowledge, environmental attitude, peer pressure, and government initiative significantly influenced the green buying purpose of Malaysian consumers. However, surprisingly, eco-labels did not indicate any meaningful relationship to the green buying purpose of Malaysian consumers.	[64]
6.	Malik et al. [19] study basic science knowledge, awareness, and acceptance of the B40 (lower) families’ ground on solar technology to create more monthly income. A study related to government initiatives to increase the revenue of lower-income families.	High acceptance of government initiatives using solar technology to raise their monthly income. The community’s acceptance of the new technology relies on their education level.	[20]

provides a summary of Malaysian consumer research on RE.

2.4. Consumer Framework on Energy Consumption

Although there is broad consumer concern and awareness about the environment, marketing efforts for RE have been unsuccessful thus far [65]. Despite numerous green programs, the concept of “green” is still relatively novel in Malaysia. Peninsular Malaysian households’ RE utilisation, adaptability to change, and energy consumption patterns are poorly understood. Hence, more research is needed. The current study applies a theoretical framework on how environmental uncertainties, RE knowledge, and views about consumer attitude influence the latter’s propensity to pay a premium for RE among Peninsular Malaysian adolescents.

2.4.1. Consumer Concern

A consumer’s concern influences their views toward paying for further RE. By the findings of Marcketti et al. [66], consumers are more likely to modify their consumer behaviour to alleviate or resolve a perceived problem if they are concerned about it and believe it exists. A producer is also obligated to reduce the environmental impact of their products. According to Mutua et al. [67], consumer happiness has become an essential concern for businesses and organisations seeking to improve product and service quality and those hoping to sustain client loyalty in a highly competitive environment. Another researcher, Bang et al. [8], stated that consumers who are worried about the environment choose environmentally friendly items and reward ecologically conscious marketers whom they believe to be socially responsible. A concerned consumer typically has excellent knowledge about what they intend to purchase. It ensures that the product does not hurt the environment. About 57% of persons in a poll conducted by Muhammad-Sukki et al. [17] were unconcerned with the source of their electricity, whether it was derived from fossil fuels or RE if it was supplied to their homes.

2.4.2. Consumer Knowledge

Consumers who are concerned with RE are typically knowledgeable about RE in terms of brands, product characteristics, and applications. Recent research by Marcketti et al. [66] and Maheswaran [68] demonstrated that the term refers to the cognitive representation of product-related experience in a consumer’s memory, which takes the form of a product schema and is likely to contain knowledge in the form of coded representations of brands, product attributes, usage situations, and general product-class information, as well as evaluation and choice rules. Some consumers are aware of RE but lack knowledge. Those who are aware of energy efficiency and its potential may lack the following information: what to do next, what to look for at the store and how to compare products, whom to contact for advice, where in their buildings to look for signs of cost-effective efficiency improvements, and what ancillary benefits to water consumption, productivity, etc., may be possible [69]. Thus, radio, internet television, and magazines can spread information about RE to readily reach the target audience. Consumer satisfaction has become essential for businesses and organisations to improve product and service quality and preserve client loyalty in highly competitive organisations [70,71].

2.4.3. Consumer Belief

Bang et al. [8] point out that the current research also anticipated that customers with greater awareness of RE would have a more optimistic view of the favourable effects of adopting RE than consumers with less understanding of RE. In a second large study, Michalos et al. [72] demonstrated that attitudes are more powerful than the knowledge of sustainable development-friendly behaviour. Due to the increase in RE production, some customers do not believe that increases in global warming may damage humanity or the environment. RE produces fewer pollutants and has a more minor impact on global warming than conventional energy. This is due to a lack of RE-related knowledge. Sirgy et al. [73] proposed subjective and objective evaluations of product consumption by considering whether a product is safe for customers, the public, or the environment. RE is an excellent energy source for the future of conventional energy. Therefore, according to Evers [74], people must be willing to make financial sacrifices for a cleaner environment and pay more for RE.

2.4.4. Consumer Willingness to Pay

According to research by Bigerna et al. [9], a WTP determines an item’s price when there is no market and the price is unknown. Clare et al. [75] claimed that the two studies investigated whether WTP for RE is sensitive to whether it would be offered collectively, in which case every consumer would be compelled to purchase it, or individually, in which case each consumer would have the option to buy it. Bigerna et al. [9] argued that if consumers have a favourable opinion of RE technologies, this will influence their WTP, increasing the premiums they are likely to pay for this new technology and reducing the need for public support. This would help attain an improved understanding of the changes occurring in the production of electricity (deregulation) [75,76]. In addition, some persons who perceive good consequences may experience pleasant feelings that influence their decisions [77,78].

3. Hypothesis and Methods

3.1. Hypothesis Development and Conceptual Framework

3.1.1. Consumer Concern and Willing to Pay More

Many consumers are highly concerned about the environment because they are concerned about their health and children’s future. The more concerned individuals are about the environment, the more likely they are to be knowledgeable about RE, which will affect the future use of RE. Lim et al. [79] found that it concurrently produces multiple environmental challenges that can undermine the ecosystem’s survival. Consumers worried about the environment report that they would choose ecologically friendly items and reward socially responsible and environmentally sensitive marketers [8]. The independent and dependent variables derive the hypothesis: “Consumers concerned about the environment tend to be more prepared to pay a premium for RE”. As such, hypothesis one states the following.

H1: 

Consumers who are concerned for the environment tend to be willing to pay more for using renewable energy.

3.1.2. Consumer Knowledge and Willing to Pay More

Consumers who know or comprehend the challenges associated with the deteriorating environment and the benefits of utilising RE are more likely to have a favourable attitude about RE. In other words, consumers’ knowledge of RE’s benefits can improve their will to pay more for RE. According to research by Lim et al. [79], most people in Malaysia are either uneducated or have limited knowledge about RE concerns. The hypothesis is derived using consumer knowledge as the independent variable and WTP as the dependent variable. Consumers who are knowledgeable about RE are more likely to be willing to pay more for RE. Knowledge will encourage customers to purchase and utilise future energy sources. As such, hypothesis two states the following.

H2: 

Consumers who have knowledge about renewable energy are positively willing to pay more for renewable energy.

3.1.3. Consumer Belief and Willing to Pay More

One significant benefit of RE is that it can be regenerated. Consequently, it is sustainable and will never deplete. Moreover, RE is environmentally friendly and generates little to no waste that may contaminate or otherwise harm the environment [80]. Research by Zhong et al. [81] investigated the influence of environmental beliefs on consumer WTP and the greenness premium. Such a study will help in designing the implementation of relevant policies. The studies established a behavioural game model to explore how environmental beliefs affect the willingness of consumers to pay for the greenness premium. Then, analytical analyses were performed on factors impacting customer desire to pay for the greenness premium by using Chinese consumers’ micro-survey data when faced with low-carbon agricultural consumer choices in central China cities. The previously established hypothesis is that consumers with bright ideas are willing to pay more for RE. Consumers will utilise an RE if they believe in it. Consequently, they are willing to pay a premium. As such, hypothesis three states the following.

H3: 

Consumers who believe in positive consequences are willing to pay more for renewable energy.

Based on the discussion of the literature review in the first part of the paper, we concluded that there are links between independent variables, such as consumer concern, consumer knowledge, and consumer belief, and the dependent variable, such as consumers’ willingness to pay. The hypotheses in the present study showed that direct linkages between selected aspects of consumer behaviour affect a person’s WTP more than RE. In this study, the authors thought there would be three independent factors: consumer concern, consumer knowledge, and consumer belief. The factor that mattered was how much consumers were willing to pay.

3.2. Quantitative Research and Measurement of Variables

This study used a quantitative research method because its primary goal was to test the hypothesis about the relationship between a consumer’s concerns, knowledge, beliefs, and WTP for RE. A self-administered or self-filled survey was given to taxpayers in Peninsular Malaysia to obtain information. The person who paid the bill was chosen randomly as a research sample. The method for determining the sample size was used to select samples. The information about the sample was more reliable and in-depth because of the use of purposeful sampling. The intentional system of using a researcher with much well-grounded experience helped explain how strata were formed. The characteristics of the estimated population were used to define the strata. The pilot study helped determine a more appropriate and efficient method for planning for stratification.

Elements within each stratum were the same, but aspects between each stratum were different [81]. It was important for all three to occur (including the northern, southern, central, western, and eastern regions of Peninsular Malaysia). Krejcie et al. [82] reported that they had made a table that could be used to determine the sample’s size. A five-point Likert scale was used to measure everything in this study. The five scales used to figure out how data should be interpreted (1) “Strongly disagree”, (2) “Disagree”, (3) “Neutral”, (4) “Agree”, and (5) “Strongly agree”. The level of customer concern was assessed by using eight questions adapted from the studies of Bang et al. [8], Zografakis et al. [83], and Alam et al. [13]. In addition, consumer knowledge was assessed using eight questions adapted from Bang et al. [8] and Alam et al. [13]. The eight-item questions were adopted and modified from the work of Bang et al. [8], Clare et al. [75], Liarakou et al. [84], and Alam et al. [13]. Consumers’ WTP was assessed using eight-item questions adapted and modified from the research of Bang et al. [8], Zografakis et al. [83], and Rogers et al. [85].

4. Results

4.1. Demographic Profile of the Persons Analysis

4.1.1. Descriptive Analysis

Based on the information collected, a profile of the respondent’ demographics was made (see

Table 3. Total respondent profile (N= 3209).

Person’s Demographic	Categories	Frequency	Percentages
Gender	Male	1311	40.9
	Female	1898	59.1
Ages	Less than 25	1026	32.0
	25–34	911	28.4
	35–44	629	19.6
	45–54	441	13.7
	55 and above	202	6.3
Race	Malay	2520	78.5
	Chinese	349	10.9
	Indian	297	9.4
	Others	43	1.3
Highest educational qualification	Secondary education (SPM)	608	18.9
	Certificate/diploma	662	20.6
	Bachelor’s degree/equivalent	1543	48.1
	Master’s degree/equivalent	218	6.8
	Doctoral degree/equivalent	64	2.0
	Others	114	3.6
Marital status	Married	1393	43.4
	Single	1804	56.2
	Divorced	12	0.4
Household income	Below MYR 2000	273	8.5
	MYR 2000–3999	1534	47.8
	MYR 4000–5999	841	26.2
	MYR 6000–7999	401	12.5
	MYR 8000–9999	128	4.0
	MYR 10,000 and above	32	1.0
Job sector	Government	866	27.0
	Private	2003	62.4
	Self-employed	340	10.6
Types of dwelling	Bungalows	18	0.6
	Semi-Detached	412	12.8
	Terrace house	849	26.5
	Apartment/flat	1634	51.0
	Condominium	296	9.1
Monthly Electricity Bills	Below MYR 100	2819	87.8
	MYR 100–199	288	9.0
	MYR 200–299	42	1.3
	MYR 300–399	9	0.3
	MYR 400–499	25	0.8
	MYR 500–599	3	0.1
	MYR 600–699	8	0.2
	MYR 700–799	7	0.2
	MYR 800–899	6	0.2
	MYR 900–999	0	0
	MYR 1000 and above	2	0.1

). Regarding gender, there were more male persons (40.9%) than female persons (59.1%). Respondents were chosen by convenience sampling, and the questions were directed to billpayers in Malaysia. Most respondents who answered were under 25 years old (32%), followed by those ranging from 25 to 34 years old (28.4%), from 35 to 44 years old (19.6%), from 45 to 55 years old (13.7%), and finally those over 55 years old (6.3%). Most respondents who answered were Malays (78.5%), followed by Chinese (10.9%), Indians (9.4%), and the rest (1.3%). The ethnicity quota was not met because the researcher did not wholly control the enumerators in the field. In line with the ethnicity analysis, Islam is the most common religion in Malaysia. Other religions follow.

There were six different types of respondents’ highest level of education. Most respondents who answered had a high level of education. About 48.1% of the respondents had a bachelor’s degree or something similar; 18.9% of the population had a certificate or diploma, and 20.6% had an SPM (“Sijil Pelajaran Malaysia”). Moreover, 6.8% of the other persons had a master’s degree, 2% had a doctorate, and 3.6% had other degrees. Most respondents (54%) were married, 41.3% were single, and 4.7% were divorced. Most respondents who answered were from households with incomes between MYR 2000 and MYR 3999 (47.8%), MYR 4000, and MYR 5999 (26.2%); MYR 6000 and MYR 7999 (12.5%); less than MYR 2000 (8.5%); MYR 8000 to MYR 9999 (4%); and MYR 10,000 and above (1%). Most respondents who answered worked in the private sector (59.3%), followed by the government (26.7%) and then self-employed respondents (14%). Most respondents who answered lived in apartments (51%) and then terrace houses (26.5%), semi-detached houses (12.8%), condominiums (9.1%), and bungalows (0.6%). Lastly, most respondents who answered the survey (87.8%) had monthly electricity bills of less than MYR 100, and 3.2% of respondents reported that their monthly electricity bills fell into other categories.

4.1.2. Confirmatory Composite Analysis (Reliability and Internal Consistency)

A refinement process was used to check the measurements’ construct reliability, discriminant validity, and convergent validity. Cronbach’s alpha values for the six items that were above 0.7 ranged from 0.802 to 0.912 [86]. The values show that the measure was reliable and aligned with the reports from Nunally et al.’s [87]. Similarly, all composite reliabilities were high, ranging from 0.82 to 0.93.

Skewness and kurtosis results were supposed to show normality, and all new variable effects were expected. Multiple regression was used to indirectly test the relationship between four independent variables and one dependent variable by investigating whether the results were accepted. As a result, only one of the variables was important. Finally, regarding reliability, all variables showed that Cronbach’s alpha value was higher than 0.50, which is an acceptable level of reliability. Henseler et al. [88] said that 0.7 was usually used as a reference value for all loading, meaning that the loading should be higher than 0.7. Past scholars [89,90] said that reflective items with a loading value of 0.4 or more should be kept in this figure. Since it was thought that all items were meaningful, the lowest value for loading was set at 0.4. Twenty-six items of construct loaded had values higher than 0.4. However, four items were taken off because they did not receive many views. All the items in the measurement had loadings that were greater than 0.4. These loadings ranged from 0.471 to 0.929. Cronbach’s alpha and composite reliability (CR) were used to check the reliability of the constructs. The values found were in the range that Hair et al. [91] suggested.

When performing Confirmatory Composite Analysis (CCA) with reflective measurements, Cronbach’s alpha (α) and CR can be used to measure the reliability of the construct. Generally, both reliability criteria needed to be above 0.70. Cronbach’s alpha is more accurate than composite reliability, which is weighted because not all indicators are as reliable as one another (unweighted). Thus, CR needs to be evaluated and reported [92].

4.1.3. Convergent Validity

To test convergent validity, the SmartPLS application was used to look at the average variance extracted (AVE) for the entire measurement set, as shown in

Table 4. Average Variance Extracted (AVE).

Construct	AVE
Consumer Concern	0.632
Consumer Knowledge	0.831
Consumer Belief	0.589
Willingness to Pay	0.605

. Concurrent validity is a method for testing whether something is true or not. The word “construct”ledd a way to explain something from a theoretical point of view. Van Dalen [93] said that “construct” usually means a complicated idea with many parts that work together. By looking at factor loading, CR, and AVE, we tested for convergent validity.

4.1.4. Discriminant Validity and Correlation

Total item correlations for these constructs were analyzed (see

Table 5. Discriminant Validity.

	Concern	Belief	Willingness to Pay	Knowledge
Concern	0.632
Belief	0.610	0.589
Willingness to Pay	0.680	0.533	0.831
Knowledge	0.375	0.473	0.330	0.605

). The correlation pattern showed that each item was more related to its construction than any other. Moreover, the Heterotrait-monotrait ratio of correlations (HTMT) values ranged from 0.589 to 0.831 and was higher than the recommended threshold of 0.5. The results showed that all the size constructs, including relative consumer concern, consumer belief, consumer acceptance, consumer knowledge, and increased WTP to use renewable energy, were valid measures of their respective constructs. Furthermore, the square root of each HTMT (shown on the diagonal in 4) was higher than the related inter-construct correlations in the construct correlation matrix, showing that all reflective constructs had enough discriminant validity [94]. Therefore, the discriminant validity was confirmed.

5. Discussion

H1: 

Consumers who are concerned for the environment tend to be willing to pay more for using renewable energy.

The result of the SmartPLS algorithm was used to evaluate relationships between independent and dependent variables. To test the significance level in SmartPLS, t-statistics were computed for all pathways using the SmartPLS bootstrapping tool. Based on the t-statistics result, the level of significance for each association was established. Table 4 demonstrates the relationship between customer concern about the environment and extra WTP for renewable energy, as determined by testing the null hypothesis. The literature strongly suggests that consumers’ environmental consciousness is reflected in their shopping habits. Therefore, there is a correlation between ecological consciousness and extra WTP for renewable energy.

As anticipated, environmentally conscious persons will likely pay extra for renewable energy. In addition to enjoyment, consumers weighed external concerns such as social responsibility when making purchases [7]. Individually, consumers cannot affect change, but when they buy a product from a firm with the power to affect change, they believe they can. Consequently, customers’ environmental awareness and concern influence their readiness to pay for renewable energy.

Stenner et al. [95] underlined consumer issues over uncertainty and WTP for leasing solar energy equipment. The conjoint analysis approach identifies part-worth utilities and estimates willingness-to-pay gaps between attribute levels and leasing durations. The results revealed the value of utilities and the relative significance of four essential characteristics, including leasing duration. Government subsidy, electricity price, dependability, and the emergence of a new generation of renewable energy systems were significantly connected to the increased readiness to pay for renewable energy applications.

H2: 

Consumers who have knowledge about renewable energy are positively willing to pay more for renewable energy.

RE might be more appealing to consumers if they knew more about the worsening problems caused by the environment and the benefits of using renewable energy. Ultimately, these consumers may be more likely to act in ways that align with their beliefs or knowledge. However, an individual who knew how important it was to use renewable energy tended to pay more for it.

A similar study conducted in Japan by Murakami and co-authors [96] showed that the motivation is the growing awareness of global environmental problems and the need to cut greenhouse gas (GHG) emissions. Moreover, people thought they knew about the environment 6.74 out of 10 times, with 10 being the highest self-perceived knowledge about the environment. The results showed that residents felt they knew the most about the environment and were willing to pay more for power from renewable sources.

This study added to the micromarketing literature by using the theory of reasoned action to examine attitudes and behaviours in human activity that had made it hard to understand how the marketing system for providing RE was greatly affected by what consumers did and how they behaved [97]. It was also used to predict how a person would act based on their thoughts and plans. This study used the theory of reasoned action because of independent variables (knowledge, concern, and belief) and the dependent variable (more WTP) related to RE consumption. It is up to the consumer to decide whether to carry out specific actions, such as paying more for RE consumption.

H3: 

Consumers who believe in positive consequences are willing to pay more for renewable energy.

Hypothesis testing showed that one of the essential parts of the Theory of Reasonable Action (TRA) was that a person’s attitude toward behaviour (in this case, whether they would be willing to pay more to use renewable energy) was affected by their belief that their behaviour leads to actual results (in this case, consumer beliefs about the importance of the environment, safety, and reliability when considering renewable energy). Therefore, it was thought that consumers’ beliefs about the benefits of using renewable energy would be related to their WTP more for renewable energy [8].

Liang et al. [98] investigated how consumers felt about the United States’ extra demand charges and volumetric energy price increases. The results showed that people who own their homes were more likely to demand charges than those who rent them. Demographic and behavioural factors affect how consumers view bill savings from energy efficiency programs or the installation of solar panels. They also affect how consumers think concerning whether it is fair for utilities to make up for lost revenue by increasing the price of volumetric energy. To support hypothesis H3, the study in Poland by Kowalska-Pyzalska [99] showed that the result of tests of pairwise associations between WTP for green electricity and the belief of environmental degradation is 0.173.

In contrast, the WTP for green electricity and belief in the importance of environmental policy is 0.082*. This result initiates a positive WTP; the consumer must seek an energy supplier offering green electricity. There are several influencing factors, such as intention and belief toward green energy. Their preferences for surcharges and attitudes about energy efficiency and solar power were affected by their actions, such as whether they tried to save money, believed they could save money, and planned to invest in renewable energy panels. Consumers are more likely to agree that installing solar panels saves money if their energy bills decrease when trying to save energy. Moreover, consumers who planned to invest were more likely to agree that energy efficiency programs or solar panels would save them money. Persons who cared more about the environment were willing to pay more for an extra fixed demand charge. This link between consumers’ attitudes and actions shows how important it is to make policy decisions based on how a person acts. For instance, new energy prices could start with customers who are more likely to accept them, such as those who have experience or plan to invest.

The study suggested a conceptual framework based on what consumers worry about, what they know and believe about RE, and what they are willing to pay more for. In this study, the results of the measurement scales were good enough to meet the standard of reliability analyses. The testing of the new hypothesis showed that there was only one relationship between an independent variable and a dependent variable. Because of this, consumers might be more willing to pay more for RE if they care about it, know more about it, and believe in its concept. The researcher concluded that each variable (consumer concern about pollution, consumer concern about the environment, consumer knowledge, and consumer belief) was essential and positively affected whether a consumer was willing to pay more.

Previous research by Bang et al. [8] found that consumers’ WTP more for RE was related to their concern, knowledge, and beliefs about the effects of using RE. The researcher concluded that there was no strong link between consumer worries and the belief that they would be willing to pay more for RE. On the other hand, the results showed that the only significant relationship was between consumer knowledge and WTP more. Bang et al. [8], O’Driscoll [100], and Hartmann et al. [101] all found the same thing in their studies.

6. Conclusions and Recommendations

Based on the analysis results, each independent variable (consumer concern, consumer knowledge, and consumer belief) influenced whether consumers were willing to pay more for renewable energy. There was also a strong link between the independent variable and the WTP more for RE. Moreover, based on the differences found using SPSS 26.0, there was a significant difference between gender, age, race, the highest level of education, marital status, household income, job sector, job position, type of dwelling, and monthly electricity bills paid by the respondents. All of this was shown by the reaction and tests.

Currently, Malaysia is a developing country that has introduced several energy policies. Malaysians have promised to work on climate change and encourage good environmental growth in the past few years. To put all policies into action, fundamental structures, policy drivers, and legal frameworks were also set up. Since these policies and initiatives provided substantial motivation and interest in developing and using renewable energy and energy-saving technologies, the policy frameworks and institutions that governed them were, at best, limited in their ability to reach the strategic goals that these policies and plans of action were meant to achieve. This was partly because of a lack of coordination and consistency in the policy framework and technical and financial problems that key players in Malaysia had to deal with when trying to promote the growth of green technologies and renewable energy.

The government and its agencies should look over these policies so that when they make new energy policies in the future, they can maximize positive synergies and avoid duplication and fragmented authoritarianism as much as possible. To move forward with the proposed energy strategies and initiatives and ensure that they work well, the key players in the energy sector need to talk and work together often so that policy conflicts and implementation costs are minimised and to make it easier for consumers to recognise and understand the relationship between public awareness, willingness, and adaptation to developments in renewable energy in Malaysia. The expected result was to show possible factors changing how people think about and feel about paying more for renewable energy. This includes hypotheses from the literature about how consumer concerns, knowledge, and beliefs about renewable energy affect their WTP more. Government agencies, politicians, RE investors, and staff billpayers have proposed a framework for implementing RE, and they hope it will be useful for emerging countries in Southeast Asia. A study on revisiting the education status on sustainable development, especially RE concepts and technologies at secondary schools, showed a positive impact on students at early ages [102]. It was a good initiative approach for providing awareness of RE education by improving secondary education curricula for the country so that students are aware of achieving the nation’s goal of obtaining RE SDGs in future.

As energy needs increase, several associated organisations find it challenging to quickly adapt their solutions and policies to meet their consumers’ increasing expectations. Existing personnel billpayers in Peninsular, which is said to become the most populous region in Malaysia, should be closely observed to gauge the overall trend of consumer knowledge, public interest, and product acceptability toward RE technology. The country’s complex energy legislation heavily regulates the electrical industry in Malaysia. Numerous implementation initiatives have backed these up. The penetration of RE has not yet been demonstrated, even though the country’s electrification rate, supply quality, and energy generating mix have all improved in recent years. The study’s findings can help gauge the level of interest, awareness, and belief in RE among Malaysian citizens and their WTP premium for it. Malaysia’s government has recently announced a few new initiatives, including adding a 1200 MW quota for solar resources to support Malaysia’s sustainable energy program [103]. These initiatives shall boost the sustainable energy economy segment, which is in line with the Twelfth Malaysian Plan in pursuing green technology growth. An ongoing initiative of the Malaysian government and praiseworthy efforts shall achieve the country’s 31% and 40% RE targets by 2025 and 2035, respectively.