Cleaner Energy Systems 7 (2024) 100109

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Cleaner Energy Systems

journal homepage: www.elsevier.com/locate/cles

New markets for local, renewable, or affordable energy? A segmentation

analysis to identify consumer preferences for decentralized energy markets
Maria Lagomarsino a, 1, *, Melanie Herrmann a, 1, *, Ulf.J.J. Hahnel b, Tobias Brosch a
a
Consumer Decision and Sustainable Behavior Lab, Department of Psychology and Swiss Center for Affective Sciences, University of Geneva, Switzerland, Chemin des
Mines 9, CH-1202 Geneva
b
Psychology of Sustainability and Behavior Change, Faculty of Psychology, University of Basel, Switzerland, Missionsstasse 62a, CH-4055 Basel

A R T I C L E I N F O A B S T R A C T

Keywords: Local Energy Markets (LEMs) allow direct citizen involvement in energy production and trading. A study sur­
Local Energy Markets (LEMs) veyed 636 Swiss electricity consumers using choice-based conjoint analysis to explore preferences for various
Prosumer LEM characteristics. Three consumer segments emerged: ’Renewable energy enthusiasts’ (42 %), interested in
Choice-based experiment
energy mix and community PV investment; ’Price sensitives’ (30 %), driven mainly by costs; and ’Uninvolved’
segmentation
(28 %), focused on energy mix but hesitant about PV investment. Demographic and psychological variables
helped characterize these segments, suggesting tailored communication strategies to boost participation in future
energy markets. Communication strategies should focus on ‘Renewable energy enthusiasts’ segment and should
emphasize environmental benefits and community engagement to leverage their high motivation for
involvement.

Introduction
The pressing need to address climate change and build a sustainable
future has brought the importance of transforming our energy system to
the forefront of global discussions (World Economic Forum, 2022).
Fossil fuel-based energy production has driven economic growth and
development for decades, but has also led to severe environmental
degradation and contributed significantly to greenhouse gas emissions
(IPCC, 2022). To mitigate these challenges, a transition towards
renewable energy sources has become imperative. Increasing the pro­
duction of clean, renewable energy and implementing localized elec­
tricity management are not only crucial steps towards curbing climate
change, but also offer numerous other benefits. These benefits include
enhanced energy security, economic opportunities, and technological
advancements, which are of paramount importance in light of actual and
future geopolitical tensions (World Economic Forum, 2022).
Among the envisaged solutions to foster local generation and dis­
tribution, Local Energy Markets (LEMs) are receiving increased atten­
tion (Adams et al., 2021). These markets are decentralized and allow for
increasing consumer involvement, which can significantly vary
depending on market characteristics and consumer motivation. At the
most active level, consumers can install a solar system and generate
solar energy at home for self-consumption. They benefit from storing
excess in Battery Energy Storage Systems (BESS) or feeding excess to the
local market or into the local grid – in the latter cases they act as
so-called “prosumers”. At the intermediate level, consumers can
participate in local energy generation by investing in community solar
systems. Finally, at the most passive level, consumers can buy renewable
energy from utilities or private prosumers in their local energy
community.
Given the early stage of these markets, LEMs need to be regulated
and energy pricing schemes need to be established. In this regard,
technological advances in information and communication technologies
(ICT) provide new opportunities for energy market schemes. Such
schemes can foster the local production and integration of renewable
energy (Hahnel and Fell, 2022), but are also likely to make choices for
consumers more complex (Hahnel, 2022). This encompasses more dy­
namic energy pricing schemes, the geographical origin of the energy,
upfront investments in individual or shared PV systems, or more
detailed information on the actors involved in the market (Adams et al.,
2021).
For these highly user-centered solutions to succeed, it is therefore

* Corresponding author.
E-mail addresses: maria.lagomarsino@unige.ch (M. Lagomarsino), melanie_herrmann@epam.com (M. Herrmann), ulf.hahnel@unibas.ch (Ulf.J.J. Hahnel), tobias.
brosch@unige.ch (T. Brosch).
1
First-author.

https://doi.org/10.1016/j.cles.2024.100109
Received 25 October 2023; Received in revised form 22 December 2023; Accepted 20 February 2024
Available online 21 February 2024
2772-7831/© 2024 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

essential to better understand consumers’ interest in joining LEMs
(Schot et al., 2016). The literature offers first insights into consumers’
willingness to participate in LEMs (e.g., Reuter and Loock, 2017),
preferences for solar investments (e.g., Chaikumbung, 2021), and en­
ergy price sensitivity (e.g., Hahnel and Fell, 2022). However, many
additional factors remain to be studied due to the novelty and inherent
complexity of emerging energy markets. Specifically, more research is
needed to understand how different consumer groups evaluate key as­
pects of new energy markets in order to optimally design and tailor the
schemes for different population groups.
In this study, we expand on previous research to better understand
consumer choices regarding pricing, social aspects, and technical as­
pects of future LEMs. We moreover subject consumer choices to a seg­
mentation analysis to better understand heterogeneous consumer
preferences. We characterize the segments using socio-demographic and
psychological variables. This consumer characterization informs
communication strategies to optimally design energy markets for
various consumer groups and to increase the adoption of renewable
energy and PV investment. In the following, we review LEM structural
characteristics that influence participation as well as drivers and barriers
to the acceptance and adoption of LEM, and we specify our research
objectives.
Consumer acceptance and adoption of LEMs
A growing body of literature is investigating which factors predict
the acceptance and adoption of LEMs (as reviewed by Capper et al.,
2022). Some studies highlight that cost remains the most important
characteristic of consumer decision-making with economic benefits and
financial incentives increasing acceptance and participation in LEMs (e.
g., Mengelkamp et al., 2019). However, the evidence on the importance
of cost is mixed, with other research suggesting that financial incentives
are not the single-most important driver of acceptance, but that social
factors, such as concern for the local and global environment, are also
major drivers of LEM acceptance (Georgarakis et al., 2021). For
example, in a survey with over 800 respondents from Germany,
Switzerland, Norway and Spain, energy consciousness, energy knowl­
edge, and the number of technological devices in the household were
found to positively influence respondents’ intention to participate in
LEMs (Reuter and Loock, 2017).
Previous literature also looked at how demographic and psycho­
graphic variables are associated with different aspects of LEM partici­
pation. A core characteristic of LEMs is that consumers can invest in
solar systems, thus becoming prosumers (Hahnel et al., 2020).
Regarding this aspect, high solar radiation in an area, home ownership,
and income have been found to predict demand (Schaffer and Brun,
2015). The effect of demographics such as age and income is inconsis­
tent between studies, and evidence increasingly points towards the
relevance of considering psychological determinants (Schulte et al.,
2022) such as consumers’ values, motivations, and lifestyle choices. In
the context of solar energy, these characteristics include environmental
concern, status motives, or the desire to be energy independent (Alipour
et al., 2020). Specifically, environmental identity, climate change
concern, and personal norms predict consumer acceptance of sustain­
able technologies and demand side response (DSM) (Poortinga et al.,
2012), and a desire to be energy independent, environmental attitude,
and subjective norms predict intentions to purchase solar panels (Korcaj
et al., 2015). More generally, biospheric values are considered a driver
for pro-environmental choices (Conte et al., 2021), energy-specific
research found that environmental values make consumers more likely
to adopt behaviors such as reducing energy consumption (Poortinga
et al., 2004).
Another characteristic of LEMs is their potential to serve as socially
cohesive communities by fostering participation and exchange of locally
self-produced energy among members (Koirala et al., 2018; Kalkbrenner
and Roosen, 2016). Regarding this aspect, a recent study found that
2
Cleaner Energy Systems 7 (2024) 100109
households in Germany were largely open towards P2P electricity
trading. This openness in turn was a predictor of intention to participate
in peer-to-peer electricity trading (Hackbarth and Löbbe, 2020). A
recent field study in Australia qualitatively explored the characteristics
and motivations of customers who volunteered to participate in a
real-world P2P electricity trading platform (Wilkinson et al., 2020). The
involved prosumer and consumer households reported being enthusi­
astic about renewable energy and sustainability, excited to be part of the
case study, and proud of their city for leading in sustainability. Partic­
ipants wanted to be ahead of the curve and try out P2P trading as a novel
technology. They felt motivated by being part of positive innovation and
the sharing and social equity aspect of the project. Some prosumers
value environmental and social reasons higher than economic reasons,
they are for instance willing to offer surplus electricity at a discounted
price to friends and energy-poor households (e.g., Kacperski et al.,
2023).
Despite these promising results, acceptance is hampered by practical,
structural, and psychological barriers. On the one hand, research sug­
gests that consumers are willing to pay for novel energy products to
improve efficiency and sustainability. On the other hand, however,
consumers do not adopt and utilize efficient technology to the extent
that could be expected, even in spite of economic benefits over the life
cycle (Wilson and Dowlatabadi, 2007). Consumers rarely switch to
green energy supplies in real life, which has been attributed to inertia or
high perceived barriers to change (Tabi et al., 2014). One major prac­
tical barrier is lack of access to capital or subsidies to invest. Lack of
infrastructure and excessive bureaucracy slow down adoption, including
a lack of regulations for energy security and data privacy (Capper et al.,
2022). Regarding structural barriers, research on dynamic pricing, for
example, suggests that consumers prefer simpler, static energy tariffs
over tariffs in which the cost per kilowatt hour fluctuates in function of
demand and supply in dynamic LEMs (Nicolson et al., 2018). Psycho­
logical barriers include, for example, a strong dislike for the aesthetics of
PV (Braito et al., 2017), low place attachment and low social trust
(Hahnel and Fell, 2022).
While psychological barriers can be overcome to some extent
through education (Bomberg and McEwen, 2012), they may slow down
the diffusion of renewables and LEM, as in the case of the well docu­
mented “Not in my backyard” opposition of residents to local wind en­
ergy projects (Devine-Wright, 2005). Another social consideration is
that users often prefer highly personalized systems. Yet, experimental
data suggests that consumers may prefer to trade anonymously (rather
than trade with family, friends, or acquaintances) (Hahnel and Fell,
2022). Moreover, residential energy communities can include
non-residential members such as local small-to-medium enterprises
(Hahnel and Fell, 2022). This extension can be beneficial because resi­
dential and industrial properties have complementary energy profiles
which make the energy market more robust and self-sufficient (Reis
et al., 2020). However, more research is needed to unveil consumers’
heterogenous preferences about trading partners and the trade-off be­
tween community engagement (which may decrease when including
industry) and increased LEM self-sufficiency (which is valuable to resi­
dential consumers).
To sum up, the existing literature leaves many questions open
regarding consumer preferences and acceptance of LEMs and effective
ways to promote LEMs. Considering that many previous studies either
work with a small group of highly motivated early adopters or provide
preference data across population groups, we contribute to the literature
with a categorization of heterogeneous consumer preferences through a
consumer segmentation of a representative sample in Switzerland.
Based on our review of the literature, we examined traditional energy-
related attributes, such as price and energy mix, as well as social attri­
butes of future energy markets that have not yet been studied system­
atically, such as trading partners (but see Hahnel and Fell, 2022). By
segmenting the market, we aim to disentangle conflicting results
regarding, for example, the importance of cost signals and the role of
 Cleaner Energy Systems 7 (2024) 100109

psychological variables, and to describe segment preferences for specific understood the attributes and levels. After each attribute was presented,
LEMs features such as investment in solar panels or pricing mechanisms. we asked a true/false question regarding the explanation content, for
example after explaining the different options for trading electricity in
Methods the LEM, we asked “You can prioritize trading with favorite community
members who you have a personal relationship with”. As described in
Participants the pre-registration we did not exclude anyone based on comprehension
check. One respondent failed one comprehension check.
The dataset in this study consists of 636 respondents who were We chose the following five attributes: monthly energy cost in the
recruited through a market research institute; only respondents that LEM compared to current costs, percentage of renewable energy yielded
completed the survey were considered. The survey was administered in by the LEM, PV investment options, pricing mechanism in the LEM, and
Switzerland and was representative with regard to household owner­ trading partners in the LEM (see Table 2). Previous research suggests
ship, number of occupants per dwelling, language distribution, educa­ consumers would be willing to pay up to 10–16 % more for their
tion, age and gender (see Table 1). The survey was administered both, in preferred energy tariff (Dagher and Harajli, 2015). We tested the effect
French and German, the two major official languages in Switzerland of a 20 % increase in cost to see whether this would still be acceptable to
(French and German are the first languages of over 85 % of the popu­ participants (seeing that the absolute cost of monthly energy bills is
lation (FSO, 2023)). relatively low in Switzerland). We varied the percentage of renewable
energy between 60 %, 80 %, and 100 % (although renewable energy’s
share of Switzerland was 28 % in 2021, many cantons produce up to 60
Procedures
% of their energy from renewable sources (Swiss Federal Office of En­
ergy, 2022) thus lower percentages would have been unrealistic). As for
The survey was programmed in Sawtooth Lighthouse Studio; data
PV investment, the options were either not to invest in PV but to buy
was collected online. We first provided participants with detailed in­
electricity from local PV production, to invest in PV by buying
formation on energy communities. Comprehension checks ensured that
fully-owned solar panels for one`s household, or to invest in PV by
respondents understood the details that were relevant to the choice task.
buying into a community scheme with shared ownership of the solar
Participants then completed 10 choice tasks (see Section “Choice task
panels. The attribute pricing mechanism included a static option with a
design” for more information). In every choice task, three different types
fixed price per kWh, a dynamic option that adapted pricing as a function
of LEMs varying in five attributes were presented, and respondents
of demand and supply, and a third personalized option in which con­
chose the option that was most appealing to them. Sawtooth automati­
sumers would be able to set personal preferences (such as selling more
cally generated the combinations of attribute levels for the 10 choice
cheaply to favorites within the LEM). Finally, for trading partner, we
tasks by means of the Random Task Generation Method (Balanced
varied whether consumers would primarily trade with other residents,
Overlap). After assessing their preference for one of the options, re­
whether they could prioritize favorites to trade with, or whether they
spondents moreover indicated with “yes” or “no” whether they would
would accept trading with local small and medium businesses.
consider the chosen option in real life. The survey concluded with socio-
demographic questions and psychological measurements (see Tables 4
Data analysis and software
and 5). The average time the sample spent on the survey was 31 min.
The data obtained from the choice task were analyzed in three steps,
(1) choice-based conjoint (CBC) analysis, (2) clustering of potential
Choice task design and data analysis consumer segments, and (3) segment description and socio-
demographic comparison. The analysis plan for the collected data was
Choice task design pre-registered on AsPredicted ("Study on preferences for energy com­
The attributes of the LEM and the respective attribute levels were munity schemes." #86621; https://aspredicted.org/XH6_F8R).
selected according to identified research questions for future energy CBC analysis. The choice-based conjoint analysis considers re­
markets. Specifically, they were derived from our review of the litera­ spondents’ decisions in the choice task and extracts the importance of
ture and discussions with energy economists and experts in the devel­ the attributes (monthly cost, percentage of renewable energy, pricing
opment of ICT and software for energy markets. The survey included mechanism, trade partners, PV investment) and the part-worth utilities
explanations and comprehension checks to make sure that respondents of the attribute levels. The model is based on a multinomial logistic
regression which predicts the probability of choosing an option based on
Table 1 the relative preference of respondents for the different attributes. Model
Comparison of the study sample and the Swiss general population. parameters are estimated using a hierarchical Bayes (HB) approach,
Empty Cell Study sample Swiss which provides information on preferences not only at the group level
population but also at the level of individual respondents (Orme, 2014). The
Age1 48 (SD = 13) 42 advantage of this approach is that the respondent-level utilities can
Gender [woman]2 50 % 50 % subsequently be used to segment the sample into different consumer
2 non-binary, 1 preferred
not to answer
Education3
Table 2
Compulsory basic education 5% 19 %
Highschool/apprenticeship 48 % 45 % Attributes and attribute levels used in the conjoint task in the present study.
University/higher education 47 % 36 % Attributes Levels
Average number of occupants 2.44 (SD= 1.22) 2.2
per dwelling4 Monthly cost 20 % cheaper than same as current 20 % more expensive
Rented dwelling5 65 % 68 % current cost cost than current cost
Language [German]6 56 % 62 % Renewable 60 % 80 % 100 %
energy
1
(FSO, 2022a). PV investment buy electricity from buy community buy private PV
2
(FSO, 2022b). local PV PV
3
(FSO, 2022c). Price fixed price/kWh dynamic price/ personalized price/kWh
4
(FSO, 2022d). mechanism kWh
5 Trade partner residents favorites local small & medium
(FSO, 2022e; World Economic Forum, 2021).
6 businesses
(FSO, 2023).

3

profiles (e.g., with clustering) (Chrzan, 2022). CBC analysis was con­
ducted with the inbuilt conjoint analysis of Lighthouse Studio version
9.14.2 by Sawtooth software. We tested for differences in attribute levels
within attributes with paired-sample tests.
Clustering. After computing attributes’ importance and attribute-
levels’ part-worth utilities based on the CBC, we conducted a cluster
analysis to examine if latent groups of respondents could be identified
within the sample who valued the attributes similarly. We used attri­
butes importance weights to run a hierarchical cluster analysis based on
the Ward method (Euclidean distance) (Ward, 1963). Of the agglomer­
ative clustering methods, Ward’s method stands out as it relies on a
traditional sum-of-squares criterion, generating clusters that minimize
dispersion within groups during each merging step (Murtagh and Leg­
endre, 2014). We used the cluster dendrogram to decide the optimal
number of latent groups and we verified interpretability and clusters size
to validate the choice.
Segment description and comparisons. We then examined how
the consumer segments identified in the cluster analysis could be
meaningfully described in terms of socio-demographic data and psy­
chological measurements. That is, we compared the segments to see if
their choice preferences could be linked to individual differences. We
ran ANOVAs (Girden, 1992) and non-parametric tests (Pearson, 1900) to
examine differences in the socio-demographic and psychological vari­
ables between clusters.
Measures
Psychological variables
As reported in the theoretical framework, a growing body of litera­
ture is looking at psychographic variables associated with various as­
pects of LEM participation. We measured the variables most often
discussed in the literature and used them to further characterize our
clusters.
Specifically, we measured the five personality traits extraversion,
agreeableness, openness, conscientiousness, and neuroticism with the
Big Five Inventory consisting of 10 items, i.e., two items measuring each
of the five traits (Rammstedt and John, 2007). The items start with the
sentence “I see myself as someone who…” and finish with statements such
as “…is generally trusting”. Respondents rate the statements on a scale
from 1 (“strongly disagree”) to 5 (“strongly agree”).
To assess interindividual differences in core values, we included a
validated and widely used questionnaire that includes 16 items in total,
with 4 items each measuring biospheric (α = 0.90), altruistic (α = 0.67),
hedonic (α = 0.76), and egoistic (α = 0.76) values (Steg et al., 2014).
Respondents rated the listed values (such as “preserving nature”, “equal
opportunity for all”) on a scale from − 1 (“opposed to my values”) to 7
(“of supreme importance”). Means were centered for the analysis.
Political orientation was measured on a 10-point scale from 1
(“extreme left”) to 10 (“extreme right”). Willingness to take risks, too,
was measured on a 10-point scale from 1 (“not willing to take risks at all”
to 10 (“very willing to take risks”). Both one-item measures were used in
previously published research (e.g., Hahnel et al., 2020).
Climate change concern (8 items; α = 0.86) and energy security
concern (4 items; α = 0.82) measures were adapted from previous
research (Spence et al., 2015): respondents rated how concerned they
are about climate change and energy security on a scale from 1 (“not at
all”) to 7 (“very much”). The items include, for example, the question
“How concerned are you about climate change?” and “How concerned, if at
all, are you, that in the next 10–20 years there will be frequent power cuts?”.
Energy literacy can be measured as self-reported assessments of how
much respondents think they know about energy topics (α = 0.93). Our
survey included 6 items like “How much do you feel you know about the
energy supply in general?” and “How much do you feel you know about
future energy communities like the one in this survey?” adapted from pre­
vious research (Blasch et al., 2019; Sovacool and Blyth, 2015). Re­
spondents rated the questions from 1 (“very little”) to 7 (“a lot”).
4
Cleaner Energy Systems 7 (2024) 100109
We asked respondents how much they trusted information provided
by different stakeholders (their utility, their municipality, and the Fed­
eral Office of Energy; α = 0.87), on a scale from 1 (“not at all”) to 7
(“very much”). This measure was based on the Swiss Household Energy
Demand Survey (Hoerler et al., 2020). The measure of social trust (α =
0.65) was based on a previous publication on the topic, 3 items scale (e.
g., Mannemar Sønderskov, 2011). An example item is “Generally
speaking, would you say that most people can be trusted?” which our re­
spondents rated on a 7-point scale (from 1 “totally disagree” to 7 “totally
agree”).
To measure place attachment (Raymond et al., 2010), respondents
indicated to what extent they agreed with statements such as “My local
area means a lot to me” and “I am very attached to the friends and family
living in my local area” (α = 0.87). The scale ranged from 1 (“strongly
disagree”) to 7 (“strongly agree”). Finally, one question asked re­
spondents how many family members, friends, and acquaintances they
had who lived in the same city (response options were all values from
0 to 10, and “more than 10″).
Socio-demographic variables
We moreover collected information on age, gender, income, educa­
tion, household size, bill responsibility, and city size. Further questions
assessed whether respondents owned or rented their home and whether
they owned an electric vehicle, solar panels, a heat pump, and a battery
storage system and if they were interested in buying these technologies
in the next three years. We included interest measures for low-carbon
technologies for two main reasons. Firstly, they may be considered
proxies for environmental interests, as solar panels and electric vehicles
are promoted as sustainable technologies. Secondly, consumers adopt­
ing low-carbon technologies may be more inclined to accommodate
their increased electricity demand resulting from renewable sources.
The statistics on these measures are listed in Table 4.
Results
Choice-based conjoint analysis
Table 3 (right column) lists the average importance of the attributes
and the average part-worth utilities of all attribute levels for the entire
sample. The importance weights show that monthly cost was the
strongest driver of respondents’ choices, followed by the amount of
renewable energy. Third was PV investment, reflecting how far re­
spondents were willing to invest in PV. Pricing mechanism came fourth,
and trade partners had the least influence on respondents’ choices (see
Figure S2: Supplementary material).
Part-worth utilities describe the weight of the different attribute
levels on respondents’ decisions. For the monthly cost, respondents had
a clear preference for the cheapest of the three options, 20 % less than
what they were currently paying for their bill (M 20 % cheaper = 92.88).
The second most preferred option was no difference to the current bill
(M same cost = 24.00; Pair-wise test: t(635) = 22.43, p < .001), the 20 %
more expensive option was the least preferred (M 20 % more expensive =
− 116.88; t(635) = 47.29, p < .001). A similar pattern emerged for
renewable energy with 100 % renewable energy as the most preferred
option (M 100 % RE = 39.16), followed by 80 % renewable energy (M 80 %
RE = 6.50; t(635) = 13.64, p < .001), with a significant drop in prefer­
ences for 60 % of renewable energy (M 60 % RE = − 45.66; t(635) = 22.08,
p < .001).
In terms of investing in PV, respondents overall preferred to only
indirectly support local PV installations by buying electricity from local
PV systems without investing in the technology themselves (M Buy from
local PV = 7.41). If respondents were to invest directly in PV, they would,
on average, prefer to invest in community-owned PV (M Community PV =
− 1.13; t(635) = 3.20, p = .001). The least preferred option was to invest
in privately owned PV (M Private PV = − 6.28; t(635) = 3.62, p < .001). As
for the pricing mechanism, respondents slightly but not significantly
 Cleaner Energy Systems 7 (2024) 100109

Table 3
HB estimation of average attribute importance scores (bold%) and mean part-worth utilities (zero-centered) for the selected 3-cluster solution (N = 636).
Cluster 1 “Uninvolved” 27.83% Cluster 2 “Price sensitives”29.87% n = 190 Cluster 3 “Renewable energy enthusiasts” Whole sample (N = 636)
n = 177 42.30% n = 269
M (SD) M (SD) M (SD) M (SD)

Renewable energy: 16.30% (7.84) 14.09% (6.42) 33.46% (12.28) 22.90% (13.25)
100 % renewable 15.02 (37.91) 26.86 (24.53) 63.73 (59.40) 39.16 (50.30)
80 % renewable 11.33 (26.15) 5.71 (12.51) 3.89 (24.50) 6.50 (22.34)
60 % renewable − 26.36 (35.65) − 32.57 (23.78) − 67.62 (60.26) − 45.66 (49.12)
PV investment: 32.63% (11.74) 9.71% (6.01) 11.35% (5.73) 16.71% (12.66)
Community PV − 13.02 (43.68) 1.83 (18.65) 4.62 (22.16) − 1.13 (29.93)
Private PV − 12.98 (81.79) − 5.64 (26.38) − 2.33 (28.43) − 6.28 (49.21)
Buy from local PV 26.00 (82.07) 3.81 (26.73) − 2.28 (29.30) 7.41 (50.81)
Trade partners: 9.52% (6.52) 5.52% (3.22) 6.85% (4.52) 7.20% (5.09)
Favorites 1.12 (24.11) − 1.40 (13.89) − 1.59 (17.26) − 0.78 (18.59)
Residents − 1.46 (24.19) 6.51 (11.73) 5.63 (15.79) 3.92 (17.88)
Businesses .34 (25.84) − 5.11 (12.62) − 4.04 (17.76) − 3.14 (19.25)
Pricing 10.07% (7.31) 5.82% (3.56) 7.99% (5.16) 7.92% (5.69)
mechanism:
Fixed 2.83 (30.93) 3.98 (14.46) 4.99 (21.61) 4.09 (22.92)
Dynamic − 7.44 (24.70) − 9.46 (12.05) − 8.45 (19.68) − 8.47 (19.40)
Personalized 4.61 (23.48) 5.48 (12.18) 3.45 (17.21) 4.38 (17.96)
Monthly cost: 31.49% (12.71) 64.86% (7.01) 40.35% (11.46) 45.20% (17.11)
20 % cheaper 54.48 (49.71) 153.57 (31.79) 75.28 (47.29) 92.88 (59.78)
Same cost 20.59 (33.69) 14.76 (27.34) 32.76 (31.71) 24.00 (31.98)
20 % more − 75.08 (56.12) − 168.33 (16.76) − 108.04 (46.83) − 116.88 (56.52)
expensive

preferred personalized (M Personalized = 4.38) over fixed pricing (M Fixed
= 4.09; t(635) = 0.20, p = .840). Personalized pricing mechanism was
defined as the possibility to set preferences in selling and buying price
for different member of the LEM (e.g. discounts to family and friends).
The least preferred pricing mechanism was dynamic prices that were not
subject to personalized choices but simply to fluctuations in demand and
supply (M Dynamic = − 8.47; t(635) = 10.97, p < .001). Respondents
slightly preferred to trade with other residents (M Residents = 3.92), fol­
lowed by trading with favorites (such as family and friends) (M Favorites =
− 0.78; t(635) = 3.83, p < .001). Trading with local small and medium
enterprises was the least preferred option (M Businesses = − 3.14; t(635) =
5.54, p < .001).
Finally, results showed that a considerable proportion of the par­
ticipants would be interested in joining a LEM in real life (see Fig. 1).
Only 5 % would not consider any of the choices selected in the 10 tasks
in real life, while 49 % would consider 10 out 10 of the selected options.
Cluster analysis
“Uninvolved” (M Uninvolved = − 13.02, p < .001; M Price sensitives = 1.83, p
= .312; Welch’s F (2, 633) = 12.32, p < .001). Moreover, they are
significantly more interested in trading with residents (M Renewable energy
enthusiasts = 5.63) than the “Uninvolved” (M Uninvolved = − 1.46, p = .002;
M Price sensitives = 6.51, p = .772; Welch’s F (2, 633) = 7.98, p < .001).
The “Price sensitives” (29.9 % of the sample) are - almost exclusively
- driven by economic considerations. They are significantly more
interested in reducing their monthly costs by 20 % (M Price sensitives =
153.57) than the other two clusters (M Uninvolved = 54.48, p < .001; M
Renewable energy enthusiasts = 75.28, p < .001; Welch’s F (2, 633) = 360.77, p
< .001). The “Uninvolved” (27.8 % of the sample) are more interested in
buying electricity from local PV (M Uninvolved = 26.00), and thus not
investing in PV, than the other two clusters (M Renewable energy enthusiasts =
− 2.28, p < .001; M Price sensitives = 3.81, p = .002; Welch’s F (2, 633) =
10.81, p < .001).
Cluster description based on socio-demographic and psychological
variables

Hierarchical cluster analysis allows to reveal clusters based on un­
derlying latent traits that respondents have in common. Identifying
clusters allows to grasp heterogeneous consumer preferences and enable
the optimal customization of LEMs. We compared cluster solutions on a
cluster dendrogram (see Table S1: Supplementary material) and, after
verifying for interpretability and cluster size, selected the 3-clusters
solution. Table 3 illustrates the differences in attribute importance and
preferences between clusters. All clusters place high importance on the
monthly costs, especially cluster 2, labeled “Price sensitives”. PV in­
vestment has the highest important weight for cluster 1, labeled “Un­
involved” and energy mix has the high important weight for cluster 3,
labeled “Renewable energy enthusiasts”. Trade partners and price
mechanisms play a smaller role in the choice of the preferred LEM.
Part-worth utilities for each attribute level revealed differences in
specific preferences for the three clusters (Table S1: Supplementary
material). Although the “Renewable energy enthusiasts” (42.3 % of the
sample) are highly interested in cheaper monthly costs, they are also
interested in 100 % renewable energy (M Renewable energy enthusiasts =
63.73), significantly more so than the other two clusters (M Price sensitives
= 26.86, p < .001; M Uninvolved = 15.02, p < .001; Welch’s F (2, 633) =
58.57, p < .001). They are also significantly more interested in investing
in community PV (M Renewable energy enthusiasts = 4.62) than the
The analysis of individual differences (socio-demographic and psy­
chographic data) adds to the description of the clusters and the char­
acterization of the cluster members. Characterizing consumer groups
based on socio-demographic and psychographic variables can help
reconcile conflicting findings and provide essential insights to customize
communication and promote LEMs effectively.
Regarding demographics, no significant differences were observed
across the three clusters with the exception of the age and number of
people living in the household. On average, the “Renewable energy
enthusiasts” are younger (M Renewable energy enthusiasts = 46.46) than the
other two clusters (M Price sensitives = 49.72, p = .014; M Uninvolved =
49.08, p = .097; Welch’s F (2, 633) = 4.36, p = .013), and have larger
households (M Renewable energy enthusiasts = 2.58) than the “Uninvolved” (M
Uninvolved = 2.25, p = .015; M Price sensitives = 2.42, p = .356; Welch’s F (2,
633) = 3.90, p = .021).
Moreover, the “Uninvolved” have the lowest LEM acceptance rate. In
the choice experiment, the “Uninvolved” considered joining the scheme
significantly less often (M Uninvolved = 7.57) than the two other clusters
(M Price Sensitives = 8.35, p = .019; M Renewable energy enthusiasts = 8.57, p <
.001; Welch’s F (2, 633) = 8.39, p < .001).
Moreover, the “Renewable energy enthusiasts” are significantly
more politically left (M Renewable energy enthusiasts = 5.11) than the “Price

5
 Cleaner Energy Systems 7 (2024) 100109

Table 4
Descriptive and inferential statistics of demographics for the three consumer segments.
Cluster 1 Cluster 2 Cluster 3 Whole sample
“Uninvolved” “Price sensitives” 29.87% “Renewable energy enthusiasts” (N = 636)
27.83% n = 190 42.30%
n = 177 n = 269
M (SD) or% M (SD) or% M (SD) or% M (SD) or%

Agea ** 49.08 (12.99) 49.72 (11.48) 46.46 (13.25) 48.17 (12.74)

Genderb
Female 52.5% 46.3% 50.9% 50%
Male 47.5% 52.6% 48.7% 49.5%
I prefer not to say - .5% -% .2%
non-binary/third gender - .05 % .4% .3%
Educationc
Compulsory school 7.3 % 3.7 % 34.1 % 4.9%
Vocational school or apprenticeship 51.4 % 47.9 % 46.1 % 48.1%
Matura 10.7 % 15.8 % 12.6 % 13.1%
Bachelor 12.4 % 14.7 % 6.4 % 14.8%
Master 15.8 % 14.2 % 16.4 % 15.6%
Doctorate 2.3 % 3.7 % 4.5 % 3.6%
Incomed
3000 or less 14.7 % 11.6 % 8.6 % 11.2%
3001–4499 7.3 % 7.4 % 14.1 % 10.2%
4500–5999 16.4 % 16.8 % 14.9 % 15.9%
6000–8999 27.1 % 29.5 % 25.3 % 27.0%
9000–12,000 11.3 % 17.4 % 14.5 % 14.5%
12,000 or more 8.5 % 5.3 % 10.4 % 8.3%
I prefer not to say 10.7 % 11.6 % 7.4 % 9.6%
I don`t know 4.0 % 0.5 % 4.8 % 3.3%
Homeownership e [yes] 31.1% 36.8% 37.2% 35.1%
N◦ of people live in the household a ** 2.25 (1.11) 2.42 (1.18) 2.58 (1.30) 2.44 (1.22)
Responsible for paying the energy bills f [yes] 71.2 % 71.1 % 68.0 % 69.8 %
PV system g
Owning 19.2 % 11.6 % 11.9 % 13.8 %
Intention to purchase (3 years) 9.6% 9.5% 12.3% 10.7%
EV h
Owning 10.7% 9.5% 7.4% 9.0%
Intention to purchase (3 years) 17.5% 14.7% 15.2% 15.7%
Storage battery i
Owning 9.6 % 8.4% 5.6% 7.5%
Intention to purchase (3 years) 8.5% 7.4% 7.1% 7.5%
Heat Pump l
Owning 20.9% 17.9% 18.6% 19.0%
Intention to purchase (3 years) 8.5% 5.8% 3.7% 5.7%
City size m
0–1.000 8.5 % 11.1 % 8.9 % 9.4%
1.000–10.000 45.8 % 46.3 % 40.5 % 43.7%
10.000–100.000 29.4 % 29.5 % 35.7 % 32.1%
100.000–500.000 16.4 % 13.2 % 14.9 % 14.8%
N◦ of Local Acquaintances n
High (more than 10) 65.5 % 66.8 % 58.0 % 62.7%
Low (≤ 10) 34.5 % 33.2 % 42.0 % 37.3%
Scope preference for an energy community o
Local neighbourhood 28.8 % 37.4 % 32.7 % 33.0%
Town/city 33.3 % 31.1 % 39.0 % 35.1%
Canton 26.0 % 16.8 % 17.5 % 19.7%
National 8.5 % 11.1 % 8.2 % 9.1%
International 3.4 % 3.7 % 2.6 % 3.1%
N◦ of offers they will consider in real life *** 7.57 (2.60) 8.35 (2.86) 8.57 (2.46) 8.22 (2.65)
a
Welch F (Delacre, Leys, Mora, & Lakens, 2019): * p-level < 0.10. ** p-level < 0.05. ***p-level < 0.001. See S2: Supplementary material for Welch and F-test
detailed results.
b
Gender X2 (6) = 4.55, p = .602; excluding “I prefer not to say” and “non-binary/third gender”: X2 (2) = 1.34, p = .511.
c
Education: X2 (10) = 8.48, p = .582.
d
Income: X2 (14) = 26.42, p = .023; excluding “I prefer not to say” and “I don`t know”: X2 (10) = 17.42, p = .065.
e
Homeownership: X2 (2) = 1.81, p = .405.
f
Responsible for paying the energy bills: X2 (2) =0.70, p = .704.
g
PV system: owing: X2 (2) = 5.95, p = .051; intention: X2 (2) = 0.21, p = .545.
h
EV: owing: X2 (2) = 1.51, p = .470; intention: X2 (2) = 0.62, p = .735.
i
Storage battery: owing: X2 (2) = 2.78, p = .249; intention: X2 (2) = 0.32, p = .853.
l
Heat Pump: owing: X2 (2) = 0.60, p = .742; intention: X2 (2) = 4.53, p = .104.
m
City size: X2 (6) = 4.41, p = .621.
n
N◦ of Local Acquaintances: X2 (2) = 4.55, p = .103.
o
Scope preference for an energy community: X2 (8) = 10.89, p = .208.

6
 Cleaner Energy Systems 7 (2024) 100109

Table 5
Descriptive and inferential statistics for the psychological variables for the three consumer segments.
Cluster 1 “Uninvolved” 27.83% n Cluster 2 “Price sensitives” 29.87% Cluster 3 “Renewable energy enthusiasts” Whole sample (N =
= 177 n = 190 42.30% n = 269 636)

M (SD) M (SD) M (SD) M (SD)

Political Orientation (1–10) 5.35 (1.65) 5.69 (1.66) 5.11 (1.54) 5.35 (1.62)
Left-right scale ***
Risk Seeking 5.21 (2.08) 5.08 (2.00) 5.47 (1.99) 5.28 (2.02)
Energy Security 4.47 (1.34) 4.61 (1.38) 4.40 (1.36) 4.48 (1.36)
Place Attachment * 4.50 (1.26) 4.38 (1.16) 4.62 (1.06) 4.51 (1.15)
Climate Change Concern *** 4.20 (1.23) 4.06 (1.26) 4.51 (1.12) 4.29 (1.21)
Values .44 (1.16) .56 (1.06) .27 (1.06) .40 (1.09)
Hedonic values**
Egoistic values − 1.74 (1.28) − 1.59 (1.15) − 1.79 (1.18) − 1.72 (1.20)
Altruistic values *** .84 (0.93) .58 (0.90) .86 (0.88) .77 (0.91)
Biospheric values * 1.00 (1.08) .98 (1.05) 1.18 (1.02) 7.17 (1.05)
Energy Literacy 3.45 (1.37) 3.58 (1.27) 3.57 (1.25) 3.54 (1.29)
Big Five Inventory 2.87 (0.83) 2.83 (0.85) 2.74 (0.77) 2.80 (0.81)
Extraversion
Agreeableness *** 3.40 (0.68) 3.20 (0.73) 3.40 (0.69) 3.34 (0.71)
Conscientiousness 3.81 (0.76) 3.79 (0.70) 3.90 (0.72) 3.84 (0.73)
Neuroticism 2.72 (0.92) 2.68 (0.95) 2.68 (0.88) 2.69 (0.91)
Openness * 3.52 (0.91) 3.41 (0.94) 3.61 (0.87) 3.53 (0.90)
Social trust 4.25 (0.73) 4.23 (0.65) 4.32 (0.60) 4.27 (0.65)
Trust in energy-related 4.61 (1.57) 4.52 (1.42) 4.92 (1.41) 4.72 (1.47)
sources**
*
p-level < 0.10.
**
p-level < 0.05.
***
p-level < 0.001.

sensitives” (M Price sensitives = 5.69, p < .001; M Uninvolved = 5.35, p = .377;
F (2, 633) = 7.32, p = .001), are more concerned about climate change
(M Renewable energy enthusiasts = 4.51) than the other two clusters (M Price
sensitives = 4.06, p < .001; M Uninvolved = 4.20, p = .022; F (2, 633) = 5.59,
p < .001), and have higher biospheric (M Renewable energy enthusiasts = 1.18)
and altruistic values (M Renewable energy enthusiasts = 0.86) than the “Price
sensitives” (altruistic values: M Price sensitives = 0.58, p = .004; M Uninvolved
= 0.84, p = 1.00; F (2, 633) = 5.90, p = .003). They moreover have lower
hedonic values (M Renewable energy enthusiasts = 0.27) than the other two
clusters (M Price sensitives = 0.56, p = .043; M Uninvolved = 0.44, p = .001; F
(2, 633) = 4.17, p = .016), and higher trust in energy-related sources (M
Renewable energy enthusiasts = 4.92) than the other two clusters (M Price sen­
sitives = 4.52, p = .011; M Uninvolved = 4.61, p = .083; F (2, 633) = 2.79, p
=.008).
The “Price sensitives” have lower altruistic values (M Price sensitives =
0.58) and lower agreeableness (M Price sensitives = 3.20) compared to the
other two clusters (altruistic values: M Uninvolved = 0.84, p = .021; M
Renewable energy enthusiasts = 3.40, p = .004; F (2, 633) = 5.90, p = .003;
agreeableness: M Uninvolved = 3.40, p =.023; M Renewable energy enthusiasts =
3.40, p = .008; F (2, 633) = 5.36, p = .005).
Discussion
Local and community energy markets (LEMs and CEMs) are
emerging as new business models in the energy sector to support the
energy transition and empower end-users (Adams et al., 2021).

Fig. 1. Frequency distribution of the number of the secondary response in the choice task assessing whether participants would consider joining the LEM schemes.
The maximum value is 10 choices.

7

Compared to centralized energy markets, LEMs are highly user-centric
as energy is not only consumed but also produced and can be traded
among consumers locally (Dukovska et al., 2023). A growing body of
literature studies different aspects of LEMs, with most research focusing
on designing and modeling these markets from a techno-economic and
theoretical perspective (Capper et al., 2022). Much less is known about
consumer preferences for the products and services that these markets
can offer (e.g., Huang et al., 2022). We contribute to the literature by
investigating consumer preferences for different aspects of LEMs. Map­
ping and segmenting consumer preferences can inform the development
of tailored products to increase participation in LEMs. Service differ­
entiation in this context can potentially be very high, as our findings
show that consumers have vastly diverging interests concerning the type
of energy they consume, its origin, and with whom they want to trade.
We identified three consumer segments that differ in their prefer­
ences for LEM attributes, and can be described by socio-demographic
and psychological variables. All three segments exhibit a strong
responsiveness toward cost signals and are generally favorable towards
renewable energy. Additionally, they all exhibit a certain reluctance
towards investing in private solar systems and towards dynamic pricing
mechanisms. The “Renewable energy enthusiasts” segment, who would
strongly consider joining a LEM in real life, is relatively large (42 % of
the sample), indicating that LEM schemes are already attractive for the
general population. The “Price sensitives” (28 % of the sample) would
likely be willing to join a LEM when the system is established and the
economic advantages are considerable. The “Uninvolved” (30 % of the
sample) are hesitant about joining a LEM in real life and do not seem to
appreciate the benefits offered by participating in a LEM. In particular,
members of this cluster are not interested in directly investing in a solar
system (neither private nor community PV). The results are overall in
line with previous results reporting that the acceptance and willingness
to participate in LEMs is overall high in Switzerland (Reuter and Loock,
2017).
Demographic variables such as home ownership and income, that
have been found to be significant predictors of interest in LEMs and PV
adoption in previous studies (Schulte et al., 2022), were not very
informative in describing and differentiating the segments, meaning that
energy-related preferences are mostly independent of the demographic
variables measured in this study. This may be the case for several rea­
sons. First, accumulating literature increasingly highlights that lifestyle,
values (Mahmoodi et al., 2018), and other psychological variables
(Kácha et al., 2022) better reflect differences in consumer behaviors and
preferences than socio-demographics. Moreover, in contrast to research
exclusively focusing on PV adoption, joining a LEMs does not necessarily
entail an upfront economic investment, as citizens can just enter these
markets without producing energy. Moreover, Switzerland is among the
wealthiest country in the world, which may further dilute the effect of
income differences.
One relatively concerning finding is the disconnect between a high
observed preference for renewable energy and a much less pronounced
willingness for PV investment. The elevated demand for local solar en­
ergy requires that more consumers become prosumers. Numerous
studies, including the work of Schulte et al. (2022), have investigated
the determinants and barriers individuals encounter when contem­
plating PV investments. These barriers include diverse factors such as
economic concerns or distrust in this technology. Regarding the specific
study context, for example, it is worthwhile to point out that there is a
relatively low percentage of homeowners (32 % of the population; see
Table 1) in Switzerland. Even if there are emerging options available for
tenants (this information was highlighted in our survey), this novel
business model may be too premature to resonate on a broader level,
thus hindering tenants’ interest in PV systems. Research, policy, and
industry need to understand how to accelerate LEMs diffusion and the
adoption of PV systems by accounting for country-level and contextual
specificities, for example, by incentivizing solar panels for tenants in
countries with small percentages of homeowners.
8
Cleaner Energy Systems 7 (2024) 100109
Switzerland stands as a potential model for other nations given its
readiness for the energy transition, propelled by clear objectives and
supportive policies, including subsidies and construction mandates
(SFOE, 2021). Furthermore, Switzerland’s emphasis on independence,
illustrated through its decentralized governance and direct democracy,
may influence to what extent respondents prioritize the self-sufficiency
achievable through LEMs, similar to how it has been found to influence
willingness to adopt PV solar panels in Swiss samples (Korcaj et al.,
2015).
At the local level, ownership of solar energy has various advantages
in comparison to wind energy in terms of energy justice, where nim­
byism was often discussed with a ‘compensation’ framing (Devine-­
Wright, 2005; O’Neil, 2021). PV ownership takes a much more
empowering approach, and LEMs have already been co-designed with
communities (Cowell et al., 2011). Wind farm programs, in contrast,
were often aimed at increasing the community’s acceptance of incoming
developers, rather than designing programs for the community by the
community, with significant community influence over the wind farm
project. LEMs, therefore, have a greater potential to increase social
justice in different ways, ranging from support for PV investments to
differential pricing that advantages energy-poor households, and
generally making green energy accessible even to consumers without
the capital to own renewable energy technologies (Pena-Bello et al.,
2022). In itself, social innovation can thus increase energy justice
(Hiteva and Sovacool, 2017). For example in Italy, LEMs with social
scope (Comunità Energetiche Rinnovabili e Solidali) are spreading and
the 2022 report highlight both a reduction in overall electricity bills and
an increase in employment (Legambiente, 2022).
Limitations and further research
Our paper is subject to some limitations that offer opportunities for
future research. A feature of the study that limits the conclusions is how
we communicated the change in the monthly cost in the choice task. We
tested a relatively high price increase to assess whether consumers
would still be willing to pay that premium or whether it would deter
them from participating in LEMs. We chose 20 % price increase
compared to the status quo because previous work found that consumers
are willing to pay up to 10–16 % more for their preferred energy tariff
(Dagher and Harajli, 2015). Further, the Swiss population is highly
interested in future energy products and willing to invest (Reuter and
Loock, 2017). The decision to present the price change in percentage
was based on practical considerations related to the survey. In
Switzerland, various utilities operate at the cantonal level. Conse­
quently, it was not feasible to provide an exact price applicable to the
entire sample without the risk of significant divergence from the actual
prices in specific regions.
However, the attribute level “20 % more expensive than your current
bill” likely inflated the importance of the monthly cost attribute. While a
20 % increase to a moderate bill can still be affordable, the translation in
terms of percentage is likely to have had a large influence on re­
spondents’ judgment, especially because the survey was conducted
before the period when many countries experienced utility bill increases
and inflation due to the war in Ukraine. For future research, translating
costs into specific amounts in the local currency would be preferable.
Another approach could be to offer an average price for the basic tariff
and the actual price change, prompting respondents to imagine these as
the prices they are currently paying and would potentially pay,
respectively. Many consumers do not recall the price they currently pay
for electricity and have a poor understanding of their electricity use and
bills (White and Sintov, 2018). Future research could explore the impact
of both the magnitude of price increases and their presentation, as well
as the potential interaction between these two factors.
More generally, the geographical focus on Switzerland may limit the
generalizability of our findings to a broader global context. Future
research can expand the study scope beyond Switzerland, allowing for a

more comprehensive understanding of consumer perspectives on a
global scale. Cross-cultural studies present an opportunity to highlight
differences and similarities between various cultures. Additionally,
conducting longitudinal studies can enable tracking the evolving pref­
erences of consumers over time and at different stages of diffusion,
especially as Local Energy Markets (LEMs) become increasingly preva­
lent in the energy market landscape.
Moreover, the decision to join a LEM is far more complex in reality
than in a scenario limited to a handful of attributes and levels. Conjoint
analysis as a method provides information about the relative importance
of the selected attributes, but not about their absolute importance. For
economic market design, more complex dynamics should be investi­
gated, considering external factors in the decision to join a LEM, such as
building type, house ownership, actual electricity consumption, and
consumers’ life stage (e.g., moving plans), all elements that can greatly
affect absolute importance and interest in joining LEMs. For example,
tenants may feel they are not allowed to decide to join an energy com­
munity. Some tenants may have plans to move, which could hinder their
willingness to join a LEM for their current house but potentially
accentuate their interest in joining one for their new home to join the
new community they will belong to.
In line with previous research in the environmental domain sup­
porting that interventions that target specific audiences —specifically
moral, economic, and national security-focused ones—appear most
promising (Rode et al., 2021), future research should investigate further
consumers’ responses to targeted communications and services that
appeal to what is most valued by each cluster.
Conclusion
The present study examined differences between consumer segments
regarding their preferences for LEMs. Overall, there is a high interest in
LEMs. Only less than 5 % of the participants would not consider joining
an energy community in real life regardless of the characteristics of the
scheme. Moreover, conjoint and segmentation analyses revealed that
consumer segments differ in their preferences and priorities. Despite the
high overall importance attributed to monthly costs, 42 % of the sample
was highly interested in consuming 100 % renewable energy and in
investing in community PV, i.e., the “Renewable energy enthusiasts”.
The other segments did not seem opposed to LEMs but were almost
exclusively concerned with financial aspects (the “Price sensitives”: 30
% of the sample) and were not interested in direct investments in private
or community PV (the “Uninvolved”: 28 % of the sample).
Local Energy Markets (LEMs) represent flexible and decentralized
energy systems potentially capable of accommodating the preferences of
each identified segment, even the “Uninvolved” one. These platforms
enable the trading of electricity among members, encompassing both
prosumers and consumers. Consequently, businesses and policymakers
have the potential to market LEMs to a broader population. Addition­
ally, LEMs provide a local trading platform for locally generated elec­
tricity within the community, allowing for a bottom-up design approach
that considers the energy end users’ preferences. Existing literature (e.
g., Mengelkamp et al., 2018) has explored this area, while current
projects (SFOE, 2020) have implemented initial automated bidding
strategies for residential prosumers and consumers in LEMs. These
bidding strategies can be tailored to accommodate consumer prefer­
ences, such as minimizing electricity costs or increasing the proportion
of renewable, locally generated power in their individual electricity mix,
through automated processes. Our segmentation of potential LEMs users
offers practitioners valuable insights to craft effective trading mecha­
nisms for LEMs.
We suggest practitioners to focus on attracting the ’Renewable en­
ergy enthusiasts’ segment as initial adopters of LEMs due to their strong
motivation. This group displays heightened climate concerns, trusts
local energy sources, leans politically left, and is slightly younger.
Emphasizing environmental benefits and community collaboration
9
Cleaner Energy Systems 7 (2024) 100109
would be key to engage them. For the ’Price sensitives’, highlighting
both short- and long-term economic advantages is crucial. As for the
’Uninvolved’, targeting them is less advisable in the early stages of LEMs
due to their resistance to change coupled with reduced willingness to
engage with LEMs compared to other segments. Segmentation and tar­
geted communication have been widely utilized by practitioners and
proven effective. For instance, Rescue Agency promotes nutritional be­
haviors by addressing specific barriers and health risks among identified
segments (Rescue Agency, 2020). Likewise, the Meatless Monday
campaign globally highlights different motives to appeal to various
values. Their advertising materials address separately health and envi­
ronmental benefits, and the “community effort” aspect to reach diverse
segments of the population (GRACE Communications Foundation,
2023).
Attributes related to pricing mechanisms and trade partners had a
lesser impact on respondents’ choices across the segments, potentially
due to respondents’ limited familiarity with these features compared to
attributes like monthly cost and energy mix. As a result, consumers
might base their choices on more familiar attributes, and favoring well-
known fixed pricing mechanisms (Nicolson et al., 2018). Practitioners
should pay particular attention to this finding, suggesting that the
introduction of LEM mechanisms needs to be accompanied by educa­
tional campaigns and by potentially providing the opportunity for
consumers to learn about services and products in LEMs gradually,
starting with less dynamic pricing schemes. To conclude, our results
suggest that market design, marketing, and governance policies that
take into account consumer preferences and tailor their strategies
accordingly, can speed up the urgently needed energy transition to a
fully local and renewable energy supply.
Data availability
Data and code have been deposited at the Open Science Framework
under https://osf.io/kn9ve/?view_only=f230333ea1664f89a9ae8fa
8deb5747c.
CRediT authorship contribution statement
Maria Lagomarsino: Data curation, Formal analysis, Writing –
original draft, Visualization. Melanie Herrmann: Conceptualization,
Methodology, Investigation, Data curation, Writing – review & editing.
Ulf.J.J. Hahnel: Conceptualization, Methodology, Supervision, Vali­
dation, Funding acquisition, Writing – review & editing. Tobias Brosch:
Conceptualization, Methodology, Supervision, Validation, Funding
acquisition, Writing – review & editing.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Funding
The eNet project leading to this research has received funding from
the Swiss Innovation Agency under grant No 53796.1 IP-EE.
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