Ecological, financial, social and societal motives for cooperative energy prosumerism: measuring preference heterogeneity in a Belgian energy cooperative

Background

Energy cooperatives in Europe have become more prominent due to the growing interest in and development of renewable energy sources. Cooperatives are often seen as an instrument in the transition to a low-carbon future. The cooperative prosumer is gaining importance, taking on the role of both consumer and producer by setting up and joining electricity cooperatives as investors, shareholders and clients. As is the case with other cooperatives and social enterprises, there are tensions and trade-offs to be made between social, ecological and financial goals. To navigate these tensions and to work towards becoming a resilient institution, it is important that cooperatives preserve their support base made up of their members, who are both clients and shareholders. This study investigates the preference heterogeneity and motivations of members of a large energy cooperative in Belgium, by using stated-choice data from a Discrete Choice Experiment in combination with self-reported membership motives.

Results

Despite the significant presence of member preferences for participation and democratic voting rights, the financial and above all the ecological motives seem to be most important for being a member of the energy cooperative. Based on the stated-choice data, we classify three member types: the financial, the ecological and the social–societal member type. We find a small discrepancy in motives between members who joined early and members who joined later. Where early members care most about ecological aspects, members who joined later have more societal and financial considerations. In terms of effect size and willingness to pay per kilowatt hour, ecological motives prove to be by far the most important factor for cooperative energy prosumers in our sample. In addition, the latent-class analysis shows that over half of the member sample belongs to the ecological motives class.

Conclusions

Preference heterogeneity is present to an extent, but there is an overarching preference for sustainability. Though, cooperatives should be aware that their legal form may not be the only factor that drives membership. Rather, keeping high levels of renewable energy, competitive pricing and being an interesting investment opportunity may be key to cooperatives’ resilience and further development on the energy market.