Why Do Citizens Invest in Community Energy Companies? A Meta-Analysis

In the paper, a narrative meta-analysis of studies which investigate motives of citizens to invest in community energy companies is presented. Several studies on investment motives in a community energy context exist. Motives... [ view full abstract ]

In the paper, a narrative meta-analysis of studies which investigate motives of citizens to invest in community energy companies is presented. Several studies on investment motives in a community energy context exist. Motives of citizens to engage personally and/or financially in community energy initiatives are a recurrent issue in (qualitative) community energy case studies. In addition, some authors like Hatzl, Seebauer, Fleiß, and Posch (2016) compare different cases in a medium-n design. Quantitative studies include surveys on company (board members) or member level where data are evaluated either descriptively or using different econometric methods and statistical tests. Besides some methodological remarks, we will focus on the general findings of these works and present a framework for comparison along different dimensions.

While there is no meta-analysis of these case studies and other analyzes yet, certain patterns seem to emerge (Bauwens, 2016; Dóci & Vasileiadou, 2015; Holstenkamp & Kahla, 2016; Radtke, 2016; Volz, 2012):

• In most cases, ecological, social/political/normative, and financial motives are present at the same time, though to a different degree or with different emphasis.
• Ecological and, partly, social/political considerations dominate financial motives in many cases. However, there are also some financial investment+ cases, where private investors from the region where the power plant is located are motivated mainly financially (return or cheap energy supply) and ecological or other motives are added as additional “side conditions”.
• The return motive seems to be less important for board members/managers, who often work unsalaried for their community energy company, compared with ordinary members. If this relation holds true, these divergent goal frames may cause principal-agent conflicts.
• Women put less emphasis von return and “participation in the energy transition”, but more on ecological motives than men.
• The motivation to participate seems to be broader and more specific in the case of cooperatives compared with limited partnerships in Germany. Members of limited partnerships, community wind companies, and North German community energy value returns higher than members in cooperatives, community solar or district heating, and South German community energy companies, respectively. In addition, Holstenkamp and Kahla (2016) find higher scales for the return motive in those community energy companies which were incorporated during times of relatively high feed-in tariffs (2009-2011).
• Bauwens (2016) hypothesizes that normatively motivated members are crowded out during organizational growth.
• Return expectations tend to be significantly lower than for other types of actors, perhaps without the exemption of municipal utilities. Even in this regard, membership is heterogeneous.

The question of motivation has several theoretical and practical implications: First, the study results show the heterogeneity of the community energy sector, a characteristic which has to be born in mind whenever effects of energy policy changes are discussed. Second, community energy companies seem to be part of the social enterprise sector despite of some trends towards commercialization/profit-orientation under certain circumstances. These differentiations may be of value to general social enterprise research. Third, (potential) differences between managers and ordinary members or heterogeneity in investment motives in general may lead to conflicts within community energy companies which have to be managed and which pose specific problems. In this way, a more comprehensive empirically based picture of the phenomenon community energy can be drawn.

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