Now showing 1 - 10 of 18
  • Publication
    Shotgun or snowball approach? Accelerating the diffusion of rooftop solar photovoltaics through peer effects and social norms
    (Electronic preprint / Working Paper submitted for publication, ) ; ; ;
    Hahnel, Ulf
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    In the last decade, feed-in tariffs have been the method of choice for policymakers trying to accelerate the diffusion of solar photovoltaics (PV). Despite the overall effectiveness of feed-in tariffs, actual adoption rates have shown surprising regional differences, pointing to the presence of peer influence and regional spillover effects. For future diffusion of photovoltaics, understanding these social influences on the decision to adopt is key. Several studies have used revealed preference approaches to discern peer effects in PV adoption, proving their existence but leaving open questions about underlying psychological mechanisms. We close this gap by conducting a survey among potential PV adopters in one of the top three fastest-growing European solar markets and find that two types of social norms, descriptive and injunctive norms and their underlying interplay, play an important role in explaining PV adoption decision and diffusion patterns. Our findings have significant policy implications – as an alternative to following the shotgun approach of uniform nationwide incentives, policymakers should consider inducing snowball effects by facilitating the creation of regional hot spots. Such programs, which may be supported through co-investments between federal and local authorities, would effectively complement existing policy approaches.
  • Publication
    Red is the new blue – The role of color, building integration and country-of-origin in homeowners​' preferences for residential photovoltaics
    (Electronic preprint / Working Paper submitted for publication, ) ; ;
    The wider diffusion of solar photovoltaics (PV) is crucial to lower the environmental impact of the residential sector, which is responsible for a large share of energy consumption in many industrialized countries, including Switzerland. We investigate the extent to which financial and non-financial factors drive homeowners’ preferences for PV in Switzerland. In addition, we estimate the price premium that homeowners are willing to pay for building-integrated PV (BIPV) versus rack-mounted PV. By conducting an adaptive choice-based conjoint (ACBC) with a representative sample of Swiss homeowners planning to undertake a roof renovation project, we find a premium in willingness to pay of 21.79% for a roof with a BIPV installation in comparison with a rack-mounted PV installation. The results also reveal that the color and country of origin of the PV modules are the main drivers for increasing share of preference for PV. We further show that certain forms of governmental support to increase energy savings over a longer period (e.g. feed-in tariffs), provided that they are transparently disclosed over an aggregated time frame, would be almost equally effective in spurring demand for PV as one-off grants to lower investment costs. Implications for energy policy and marketing are discussed.
  • Publication
    Beauty and the budget: A segmentation of residential solar adopters
    The transition to renewable energy supply of buildings, especially distributed solar power, is a key element of climate change mitigation. As the policy landscape is shifting and financial incentives for renewables are increasingly phased out, a nuanced understanding of homeowners' intention to install solar panels is key for reaching a broad market appeal. By analysing a dataset of 408 Swiss homeowners' stated preferences in the context of building retrofits, this paper identifies two key segments of likely solar adopters, including a premium segment preferring coloured and building integrated solar modules, and a value segment with more price-sensitive customers. Differences between likely adopters and likely non-adopters, as well as between two distinct segments of likely adopters, are investigated along sociodemographic, psychographic, and social aspects. Our analysis shows that aesthetic aspects of solar panels are key for expanding the customer base, and that likely adopters are more likely than likely non-adopters to be surrounded by neighbours, friends, and relatives who have already installed solar panels. Our results also reveal that the premium segment cares more about aesthetic aspects in general purchasing decisions and shows higher ecological concern than the value segment.
  • Publication
    Red is the new blue – The role of color, building integration and country-of-origin in homeowners ’ preferences for residential photovoltaics
    The wider diffusion of solar photovoltaics (PV) is crucial to lower the environmental impact of the residential sector, which is responsible for a large share of energy consumption in many industrialized countries, including Switzerland. By conducting an adaptive choice-based conjoint (ACBC) with a representative sample of Swiss homeowners planning to undertake a roof renovation project, we investigate the extent to which financial and non-financial factors drive homeowners’ preferences for PV in Switzerland. We reveal that the color and country of origin of the PV modules are the main drivers for increasing share of preference for PV. In addition, we estimate the price premium that homeowners are willing to payfor building-integrated PV (BIPV) versus rack-mounted PV. We find a premium in willingness to pay of 21.79% for a roof with a BIPV installation in comparison with a rack-mounted PV installation. We further show that an increase in revenues from electricity sales (e.g. via feed-in tariffs), when transparently disclosed over an aggregated time frame, would be almost equally effective in spurring demand for PV as a decrease of initial investment costs (e.g. via one-off investment grants). Implications for energy policy and marketing are discussed.
    Scopus© Citations 34
  • Publication
    The Influence of Political Orientation on the Strength and Temporal Persistence of Policy Framing Effects
    (Elsevier Science, 2017-12)
    Darshing, Samdruk
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    The objective of this research is to analyze how political orientation moderates the influence of framing effects on policy evaluation. Drawing on the theory of motivated reasoning, three interrelated experiments assess the strength and temporal persistence of framing effects in the context of an energy conservation program. In the first experiment (N = 183), the delivery mechanism of the policy is described as either a tax rebate or a subsidy. Party identification of potential beneficiaries moderates the existence and magnitude of framing effects. The sec- ond experiment (N = 603) presents alternative frames of communication, which focus on either the economic or environmental benefits associated with the policy. Effects of the communication frames on policy support in comparison to a neutral text are significant, but only when the policy is consistent with respondents’ pre-existing views on economic individualism and government spending. The third experiment (N = 603) investigates the temporal stability of framing effects after cognitive deliberation and finds that no change in policy support occurs over time. A key implication is that tailoring frames to the target audience increases effectiveness in policy design and communication. Considering the persistence of framing effects, early frames may have a disproportionate impact in public discourse.
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    Scopus© Citations 14
  • Publication
    What are retail investors' risk-return preferences towards renewable energy projects? A choice experiment in Germany
    Citizens own nearly half the renewable energy generation capacity in Germany and have been important drivers of the country's energy transition. In contrast to citizens' important role in financing renewable energies, the energy policy and economics literature has traditionally focused on other investors, such as incumbent energy firms. To close this gap, this paper reports on a large-scale survey of 1,990 German retail investors. Conducting a choice experiment with the subset of 1,041 respondents who expressed an interest in investing in community renewable energy projects, we present a unique dataset allowing for new insights in risk-return expectations of retail investors. We find that apart from return on investment, respondents are particularly sensitive to the minimum holding period and the issuer of community renewable energy investment offerings. A minimum holding period of 10 years implies a risk premium of 2.76% points. A subsequent segmentation analysis shows that two groups of potential community renewable energy investors with different risk-return expectations can be identified: “local patriots” and “yield investors”. In contrast to professional investors, a majority of retail investors use simple decision rules such as calculating payback time or relying on their gut feeling when making investments.
    Scopus© Citations 92
  • Publication
    What makes people seal the green power deal? - Customer segmentation based on choice experiment in Germany
    Consumers have the power to contribute to creating a more sustainable future by subscribing to green electricity tariffs. In order to reach consumers 'beyond the eco-niche', identifying the drivers that positively influence the adoption of green electricity is of fundamental importance. This paper examines various factors that help to explain the extent to which green electricity subscribers differ from those that display strong preferences towards green electricity but have not yet 'walked the talk'. By making use of a latent class segmentation analysis based on choice-based conjoint data, this paper identifies three groups of potential green electricity adopters with varying degrees of preference for renewable energy. Findings indicate that socio-demographic factors play a marginal role in explaining the differences between green electricity subscribers and potential adopters, with the exception that actual adopters tend to be better educated. Analysis of psychographic and behavioral features reveals that adopters tend to perceive consumer effectiveness to be higher, place more trust in science, tend to estimate lower prices for green electricity tariffs, are willing to pay significantly more for other eco-friendly products and are more likely to have recently changed their electricity contract than non- adopters. Policy recommendations associated with these findings are provided.
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    Scopus© Citations 104
  • Publication
    Whatever the customer wants, the customer gets? : Exploring the gap between consumer preferences and default electricity products in Germany
    (Elsevier, 2013-02)
    Kaenzig, Josef
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    In liberalized electricity markets, residential customers can choose their preferred provider and select among a variety of different electricity products, including green power options. Successful product design and marketing strategies for green electricity may provide electricity providers with a competitive advantage, while at the same time contributing to energy policy objectives. This requires, however, a thorough understanding of customer preferences. We investigate the relative importance of different product attributes in creating customer value, and find that price and electricity mix are the two most important attributes. The German electricity customers we surveyed expressed an implicit willingness to pay a premium of about 16 % for green electricity. We conclude that consumers are willing to pay a significant price premium for an upgrade from the current average German default electricity mix to a more environmentally friendly default electricity mix, and discuss implications for marketing strategy and energy policy. Our findings are based on a dataset of 4968 experimental choices made by 414 German residential consumers, collected in a stated preference survey.
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    Scopus© Citations 185
  • Publication
    Dynamic Adjustment of Eco-labeling Schemes and Consumer Choice - the Revision of the EU Energy Label as a Missed Opportunity?
    Products with a superior environmental performance, such as a high level of energy efficiency, are typically subject to information asymmetries. Therefore these product attributes are often undervalued in purchase decisions. Signaling, e.g. energy labeling, can overcome these asymmetries, with positive implications for effective consumer decisions, competitive advantage for suppliers of energy?efficient goods, and for societal goals such as mitigating climate change. However, there is a scarcity of research investigating how energy labels actually influence consumer choice. The recent revision of the European Union energy label provided a unique opportunity to investigate the effectiveness of energy labeling in a quasi field?experimental setting. We show that the proposed extension of the seven?point A-G rating scale by adding new classes A+, A++, etc. will result in a lower perceived importance of energy efficiency in consumer decision?making. Based on a stated preference survey investigating 2244 choices by German consumers, we conclude that the revision actually undermines the label's ability to overcome information asymmetries, hence potentially contributing to market failure.
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    Scopus© Citations 105
  • Publication
    Petrovich, B., Hille, S., Wüstenhagen, R. Beauty and the Budget: homeowners’ motives for adopting solar panels in a post-grid parity world. Manuscript accepted and presented at 6th World Congress of Environmental and Resource Economists (June 2018). http://fleximeets.com/wcere2018/?p=programme.
    Buildings account for 32% of global final energy use and are a major contributor to greenhouse gas emissions. Therefore, the transition to renewable energy supply of buildings, especially distributed solar power, is a key element of climate change mitigation. As the policy landscape is shifting and financial incentives for renewables are increasingly phased out, a nuanced understanding of homeowners’ intention to install solar panels is key for reaching a broad market appeal. By analyzing a dataset of 408 Swiss homeowners’ stated preferences in the context of building retrofits, this paper identifies two key segments of likely solar adopters, including a premium segment featuring higher willingness to pay for coloured and building integrated solar modules, and a value segment with more price-sensitive customers. Differences between likely adopters and likely non-adopters, as well as between two distinct segments of likely adopters, are investigated along sociodemographic, psychographic and social aspects. Our analysis shows that aesthetic aspects of solar panels are key for expanding the customer base, and that likely adopters are more likely to be surrounded by neighbors, friends and relatives who have already installed solar panels than likely non adopters. The results also reveal that the premium segment cares more about aesthetic aspects in general purchasing decisions and shows higher ecological concern than the value segment.