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The value of local electricity - A choice experiment among German residential customers

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  • Mengelkamp, Esther
  • Schönland, Thomas
  • Huber, Julian
  • Weinhardt, Christof

Abstract

Renewable resources are often owned by residential customers who do not actively participate in electricity markets yet. To better integrate these decentralized resources into the energy system, market signals must reach the customers. Local energy markets (LEMs) are a promising concept to provide these market signals, and balance generation and demand at distribution network level. We examined the importance of design parameters for LEMs with an adaptive choice-based conjoint study from a customer perspective. Two surveys (a Germany-wide panel of 417 respondents and a regional survey of 239 respondents) show that economic design parameters (monthly cost and investments) are most important for German households to participate in LEMs. However, the sum of non-economic design parameters (interaction frequency, supplier, electricity source, and data privacy) levels with the importance of monthly cost without investment. Results show, that compared to the German average the regional customers are willing to pay a slight price premium on their monthly costs if regional electricity is offered on the LEM. Our results show suitable early adopters for LEMs to be large (>2 persons) residential households with young (≤60 years) inhabitants. Overall, regulatory niches and subsidies allowing LEMs to offer discount prices should be exploited.

Suggested Citation

  • Mengelkamp, Esther & Schönland, Thomas & Huber, Julian & Weinhardt, Christof, 2019. "The value of local electricity - A choice experiment among German residential customers," Energy Policy, Elsevier, vol. 130(C), pages 294-303.
    • Handle: RePEc:eee:enepol:v:130:y:2019:i:c:p:294-303
    DOI: 10.1016/j.enpol.2019.04.008
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