Impure public good provision in community-based energy initiatives: money and social norms matter

Little is known yet about the determinants of financial investments in community-based energy organizations. Hence, the objective of this paper is to shed more light on this issue, drawing upon the analysis of one renewable... [ view full abstract ]

Little is known yet about the determinants of financial investments in community-based energy organizations. Hence, the objective of this paper is to shed more light on this issue, drawing upon the analysis of one renewable energy cooperative located in Flanders and using quantitative data from an original survey conducted among the members of this organization. The results show that social identification to the cooperative and the presence of other members in social networks have a significant positive effect on financial contributions in the cooperative, whereas the influence of existing members reduces contributions significantly. Additionally, monetary incentives appear to play a major role: the return on investments is a strong incentive to trigger contributions to the cooperative, while members whose decision to join the cooperative was primarily motivated by a cheap electricity price tend to contribute smaller amounts of money. Furthermore, the democratic nature of cooperative governance is positively associated with financial contributions.