Does solar power add value to electric vehicles? An investigation of car-buyers’ willingness to buy product-bundles in Germany

Abstract

This paper investigates customers’ willingness to buy potential bundle offers made up of an electric vehicle (EV) and community solar power. According to literature, the bundling of products with high complementarity in a single offering, such as EVs and solar power, can create added value for customers, resulting in a higher willingness to buy compared to a situation in which customers have to buy both products separately. Further, literature also suggests that the adoption of EVs and solar power can be increased by financial policy incentives. To test whether community solar adds value to EVs for customers, an experimental online survey that applied a within-subject design was conducted. Additionally, the experimental online survey was extended with a between-subject design to test for the effect of emphasizing financial policy incentives on willingness to buy the bundle. A representative sample of German customers (n = 488) provided empirical evidence for added value creation through bundling community solar with an EV in the form of a significantly higher willingness to buy the bundle compared to that for an EV alone. The between-subject analysis of the effect of emphasizing financial policy incentives revealed no further effects on customers’ willingness to buy the bundle. To increase the adoption of electric cars, practitioners should increasingly rely on combined offers of solar power and electric cars, while politicians should create a framework fostering the creation of such bundle offers on the supply side, instead of only providing financial incentives to consumers.