Industrial Consumers Switching to Green Energy? An Application of the Theory of Market Choice Behaviour and Business Strategy

Abstract

Strategic green energy adoption by industrial customers could effectively address the worsening situation of the environment, which has largely impacted the well‐being of humans. To promote an understanding of the behaviour of the industrial green energy consumer and the impact of green energy strategy, this paper examines how multidimensional green perceived value (GPV) constructs relate to loyalty through customer satisfaction and perceived switching cost. The proposed conceptual model was empirically validated through data gathered from cross‐sectional responses of industrial energy consumers using green energy strategies for their business operations. Results indicated that GPV is a multidimensional formative higher‐order construct formed by social value, emotional value, functional value, and conditional value dimensions. Further, GPV impacts customer loyalty positively via the mediating effect of customer satisfaction and perceived switching costs. The current study found that an industrial consumer voluntarily uses green energy due to financial incentives alone, while social and emotional dimensions also play a major part in tactical decision‐making related to the implementation of green energy strategy.