What makes people seal the green power deal? — Customer segmentation based on choice experiment in Germany

Consumers have the power to contribute to creating a more sustainable future by subscribing to green electricity tariffs. In order to reach consumers ‘beyond the eco-niche’, identifying the drivers that positively influence the adoption of green electricity is of fundamental importance. This paper examines various factors that help to explain the extent to which green electricity subscribers differ from those that display strong preferences towards green electricity but have not yet ‘walked the talk’. By making use of a latent class segmentation analysis based on choice-based conjoint data, this paper identifies three groups of potential green electricity adopters with varying degrees of preference for renewable energy. Findings indicate that socio-demographic factors play a marginal role in explaining the differences between green electricity subscribers and potential adopters, with the exception that actual adopters tend to be better educated. Analysis of psychographic and behavioral features reveals that adopters tend to perceive consumer effectiveness to be higher, place more trust in science, tend to estimate lower prices for green electricity tariffs, are willing to pay significantly more for other eco-friendly products and are more likely to have recently changed their electricity contract than non-adopters. Policy recommendations associated with these findings are provided.