Business models for sustainable energy

Abstract

Research on business models is a response to the common dichotomy of the market-based view and the resource-based view of the firm. Particularly with the emergence of e-commerce, these traditional perspectives seemed to be insufficient to explain how firms create value and how they compete successfully on the market. This gave rise to a new unit of strategic analysis, the business model. The term business model has become increasingly popular in management research and practice in recent years. While the initial focus of the literature on business models was almost exclusively on internet firms, and it was discussed to a large extent in information technology-related academic journals, recent research has pointed out that business model innovation is a key success factor in other sectors, too. Prominent case studies include companies like Dell Computer, IKEA and Wal-Mart, i.e. companies who found new approaches to boosting profitability in old economy industries. Ultimately, scholars begin to recognize that careful design of the different components of a business model is a prerequisite to turn technological innovation into value, both for entrepreneurial start-ups as well as for established firms. In the case of sustainable energy technologies, such as solar thermal collectors, photovoltaic cells, fuel cells and other micropower technologies, using the business model as the unit of analysis seems promising because the value proposition for sustainable energy is often poorly understood, and almost as in the early days of the internet, there are few established ways of successfully generating profits by providing distributed energy products and services. To summarize, business models are an emerging stream of research, not just in mainstream management research, but also in the field of sustainable consumption and production. However, most of the applications of business model thinking in the context of sustainability have made only anecdotal reference to existing business school literature. Our paper therefore makes three main contributions: 1) Provide a literature review of business model research to lay a solid theoretical foundation. 2) Discuss the conceptual implications of specifically discussing business models for sustainability. 3) Illustrate this for the case of sustainable energy technologies as an empirical application.