Toward Ethical and Sustainable Peer-to-Peer Energy Trading: Insights from Islamic Finance Principles

Abstract

The transition to decentralized renewable energy systems has gained significant attention, particularly through peer-to-peer (P2P) energy trading models that enable direct energy transactions between participants. While these systems offer technological and economic benefits, challenges persist in terms of social equity, technological accessibility, and ethical considerations. This chapter adopts a qualitative methodology based on a comprehensive literature review and meta-analysis and uniquely integrates Islamic finance principles, such as fairness, transparency, and risk-sharing, into the evaluation of P2P energy trading models. Through a review of pricing determination techniques and Islamic financial frameworks, a conceptual model is proposed to align decentralized energy markets with ethical financial practices. The findings offer policy insights for regulators and stakeholders, particularly in Muslim-majority regions, to develop inclusive and socially responsible energy trading systems that balance economic growth, environmental sustainability, and ethical values.