# A Heuristic Approach to the Decision-Making Process of Energy Prosumers in a Circular Economy
## 2 Background
[PERSON] and [PERSON] (2013) demonstrated that the institutional context does not always affect the technology adoption as long as there are many psychological factors that may have an influence on the prosumers [23]. Following the study of [PERSON] and [PERSON] (2006), the \"value of the installation\" is a characteristic of the individual adopter and includes not only monetary but also nonmonetary costs, such as information search costs and uncertainty about future performance, operation and maintenance requirements, and perceptions of quality, sacrifice, and opportunity cost [24]. In addition, environmental beliefs are also a part of this group of atttitudinal factors on which the \"personal\" or \"subjective\" decision of the investing prosumer relies. All of these atttitudinal factors can be modified through dissemination and information campaigns, and it is for this reason that social and communication networks are considered strong determinants in the decision-making of individuals [25]. The complexity of such a predictive model limits its use at the installer level, which was shown as one driver in the promotion of these kinds of installations. In spite of a lower certainty, simpler and more transparent analytical models are desirable for evaluating the sensitivity of strategies to different factors. Furthermore, in the model of a CE, a society is proposed that takes into account environmental criteria, in addition to economic and social ones, which allows predicting a sustainable energy supply in the second half of the 21 st century [26]. In this context, some authors used agent-based simulation models (ABMs) to obtain the relationships among factors, showing that it is very complex [27; 28; 29; 30]. Table 1 shows a classification of the main factors that could influence on the decision-making process of prosumers using a heuristic approach. \begin{table}
\begin{tabular}{c c c} \hline \hline  & **Contextual** & **Attitudinal** \\ \hline \multirow{4}{*}{Internal} & Income level & Risk acceptance \\  & Consumption level & Uncertainty tolerance \\  & Demand profile & Environmental beliefs \\  & Demographic characteristics & Appreciation of technological innovations \\  & Energy access & \\ \hline \multirow{4}{*}{External} & Price of the technology & \multirow{2}{*}{The soundness of related policies} \\  & Electricity rates & \\ \cline{1-1}  & Tax incentives & The soundness of related policies \\ \cline{1-1}  & Environmental taxes & \\ \cline{1-1}  & Compensation for electricity surplus & \\ \hline \hline \end{tabular}
\end{table} 
Table 1: Classification of factors that influence the decision-making of prosumers in self-consumption installations. The factors classified in Table 1 are usually combined into several decision criteria in order to establish the main motivations for self-consumption PV installations. A brief review of recent European studies focused on this line of research is summarized in Table 2.  
The review was focused in Europe and over a short time period because it was assumed that prosumers will operate in similar socioeconomic and normative scenarios. According to the literature review, the recurring thought in the prosumers' judgement was saving or making money with a small investment and short recovery period. Thus, the decision to adopt self-consumption photovoltaic systems is based on a cost-benefit analysis, where the internal and external economic factors listed in Table 1 are considered, with an additional interest in minimizing the effect of possible increases in electricity prices. This decision criterion can be based on objective information, as there are easy ways of estimating the return on investment. Minor motivations include reducing the energy dependence of the electricity network and contributing to a reduction in environmental impact. In the case of isolated installations, autonomy is a clear and real motivation.