Opposing forces of business model innovation in the renewable energy sector: Alternative patterns and strategies

Abstract

An increased focus on renewable energy use and the liberalisation and digitalisation of the energy market has led to the adoption of innovative business models by energy businesses. This paper explores business model innovation in the electrical sector. Using multiple case studies of businesses in the electrical market in Scandinavia, this study shows why and how their business models have changed. Change forces and environmental strategies leading to certain patterns of business model innovation serve as the main study objectives. The pricing models, servitisation and appearance of new actors have mostly pronounced patterns of innovative business models of energy businesses. These patterns are predetermined by external pressures, such as industrial advancements and social trends, and are supported by businesses’ efficiency-oriented strategies. The study outcomes have implications on practice, showing the need for proactiveness and a consequent action plan for energy businesses to implement alternative environmental strategies. This study contributes by providing a novel insight into business model innovation by revealing mechanisms catalysing change from the multidimensional perspective – embracing the ‘cause’ and ‘effect’ of the change within energy businesses.