The motivational drivers behind consumer preferences for regional electricity – Results of a choice experiment in Southern Germany

Abstract

In response to climate change, Germany, like many other countries, has steadily expanded its electricity generation from renewables. Meanwhile, the ongoing trend towards regional products in other sectors raises questions regarding household consumers' preferences for regional electricity tariffs. While a few studies have concluded that regionality is a product attribute consumers prefer, little is known about the factors underlying these preferences. We fill this gap using insights from a choice experiment and additional motivational data from 777 (potential) customers of a municipal energy supplier in Southwest Germany. We determine both respondents' preferences and examine the role of environmental and regional motivations in explaining these preferences using a sophisticated statistical model. Our results show that, on average, the share of regional generation is the second most important attribute after a tariff's price. Notably, consumer preferences for regional electricity are driven by regional rather than environmental motivations. Results on consumer preferences become more nuanced when respondents are assigned to distinct clusters, with three of the five clusters attributing moderate to strong importance to regional electricity generation. Again, above-average regional motivations underpin these preferences. We discuss policy implications arising from these findings.