From trust to transition: Residential customer acceptance of circular solar business models

Abstract

While the contribution of circular business models to achieving sustainable development goals is increasingly acknowledged, most studies tend to focus on conceptual, technological, or supply-side considerations. Customer acceptance, however, is also a necessary condition for a transition to a circular economy. In this study, we employ household survey data to investigate the impact of trust on customer acceptance of circular business models in solar photovoltaics (PV). Results highlight the importance of high trust-levels in governments, suppliers, and technology to gain customer acceptance, as well as the importance of time-consistent policies to support interest in circular solar solutions. Furthermore, results suggest that vulnerable groups may miss beneficial opportunities of circular business models because of lower levels of institutional trust. This is also reflected in an analysis of barriers and value propositions, where low institutional trust levels appear to limit rational cost-benefit considerations. The paper formulates policy and management recommendations and identifies research gaps related to the redistributive impact of the circular economy. Moreover, it coins the concept of a circular risk premium that may vary along socio-economic groups and calls for further study of the impact of vocal opinions on social interactions that may spur or impede the transition to a circular economy.