The impact of (co-) ownership of renewable energy production facilities on demand flexibility

Lucas Roth, Jens Lowitzsch, Özgür Yildiz and Alban Hashani

MPRA Paper from University Library of Munich, Germany

Abstract: The transition from fossil fuels to renewable energy sources requires financial, technical and social innovation. This is particularly true for wind and solar energy which have structural differences to fossils: they depend on weather and thus are volatile in their power production scheme. Not only must a new energy infrastructure be built, but consumers motivated to change consumption habits so as to balance demand with a volatile energy supply and to accept new technologies like smart meters. Consumer (co-)ownership has proved successful in engaging consumers in financing renewable energy infrastructures, thus becoming “prosumers”. In addition, studies also indicate that co-ownership can induce behavioral changes in energy consumption. Based on a sample of 2,143 completed questionnaires collected through an online survey, the study presented in this paper seeks to empirically analyze empirically whether (co-)ownership also has an influence on demand side flexibility. Our results indicate a statistical correlation between (co-)ownership of renewable energy production facilities and the willingness of private households to adjust their consumption behavior. However, the relation is complex: Only when prosumers have the choice between self-consumption and sale of the surplus electricity production to the grid we observe a statistically significant effect on consumption behavior. As every kilowatt-hour not consumed is one potentially sold to the grid an economic incentive kicks in which is equally important for energy efficient behavior. To exclude a self-selection bias we have applied propensity score matching.

Keywords: consumer ownership; renewable energy; energy consumption behavior; flexibility, demand response; demand side management; propensity score matching (search for similar items in EconPapers)
JEL-codes: C01 Q2 Q21 Q4 Q41 Q48 (search for similar items in EconPapers)
Date: 2016-09-07
New Economics Papers: this item is included in nep-ene
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