Business model challenge: Lessons from a local solar company. (January 2016)

• Record Type: Journal Article
• Authors: Karakaya, Emrah; Nuur, Cali; Hidalgo, Antonio
• Is Part Of: Renewable energy. Volume 85(2016)
• Page Start: 1026
• Page End: 1035
• Publication Date: 2016-01
• Subjects: Diffusion -- Innovation -- Solar photovoltaics -- Business model -- Renewable energy -- Product life cycle; Renewable energy sources -- Periodicals; Power resources -- Periodicals; Énergies renouvelables -- Périodiques; Ressources énergétiques -- Périodiques; 333.794
• DOI: 10.1016/j.renene.2015.07.069
• Languages: English
• ISSNs: 0960-1481

Abstract

Abstract: Solar photovoltaic systems are considered vital renewable energy sources for mitigating climate change and reducing dependency on fossil fuels. However, in some countries, the diffusion rate of photovoltaic systems is decreasing. A case in point is Germany, the country with the highest installed capacity of photovoltaic systems. Given the new conditions in the German market, the diffusion rate continuously declined in both 2012 and 2013. Whether the diffusion rate will again take off is not known. While the recent literature has pointed out that local solar companies have a vital driving role in diffusion, not many studies have yet discussed the business models and challenges such local companies may have. Through an extensive case study, this paper explores the business model of a local solar company in a town of 43, 000 habitants in Southern Germany. The case of this company tells about an important business model challenge. Overcoming such challenges may not only let the company survive but also drive the diffusion of solar photovoltaic systems in the region. The results include implications for both industrial actors and policymakers. Highlights: Local solar companies have been vital to enhance the diffusion of PV systems. However, diffusion of PV systems in Germany declined in 2012 and 2013. Based on a case study, we explore the business model of a local solar company. Company's business model and new market conditions constitute a challenge. Policy makers might consider new measures to support local solar companies.