Consumers who want access to renewable energy have two main options: install renewable energy generation equipment “behind” the electrical meter (e.g., solar panels on the roof) or buy energy from a utility company, which would then source energy from generation companies. The first approach has obvious diseconomies of scale. It is only available to homeowners, while the second approach requires over-reliance on utility companies, which may not contract with renewable suppliers or may offer an expensive mix of renewable and nonrenewable energy. We study an alternative innovative business model, “community solar,” whereby consumers subscribe to own a portion of the energy generated by a large solar plant. We partner with Origo Energy, a Brazilian company that pioneered this model in South America, and we analyze the behavior of consumers who switch from the traditional business model to Origo’s subscription to understand boundary conditions for community solar.…Read More
