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Cash vs. solar power: An experimental investigation of the remuneration-related design of community solar offerings

Alexander Stauch and Karoline Gamma

Energy Policy, 2020, vol. 138, issue C

Abstract: This paper investigates the effect of two different community solar remuneration models on the overall willingness to buy of Swiss electricity customers (n = 496). Based on practical observation, the two main remuneration models that dominate today's implementation landscape for community solar were identified. The first of the former delivers solar power directly from community solar plants, while the second delivers financial compensation instead of solar power. A between-subject-design experiment applying pro-environmental behavior as approximation for intrinsic motivation demonstrated that remuneration schemes which avoid mentioning financial benefits and instead compensate customers with the solar power are particularly attractive to green electricity customers who have higher intrinsic motivation to consume pro-environmental electricity. Offering financial benefits may even discourage these customers from participating in community solar. On the other hand, offering financial benefits appeals to default electricity customers whose intrinsic motivation for pro-environmental behavior is too weak to trigger a reaction to the ecological and local benefits of community solar alone. When designing policies around community solar or implementing community solar projects, policy makers and practitioners should thus carefully analyze the customer base and its composition in order to match remuneration schemes to customer preferences.

Keywords: Community solar; Remuneration; Motivation theory; Crowding-out (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.enpol.2019.111216

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Handle: RePEc:eee:enepol:v:138:y:2020:i:c:s0301421519307980