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Business model challenge: Lessons from a local solar company
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics. Universidad Politecnica de Madrid, Spain.ORCID iD: 0000-0002-5617-1912
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics.ORCID iD: 0000-0001-5912-441X
Universidad Politecnica de Madrid, Spain.
2016 (English)In: Renewable energy, ISSN 0960-1481, E-ISSN 1879-0682, Vol. 85, 1026-1035 p.Article in journal (Refereed) Published
Abstract [en]

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.

Place, publisher, year, edition, pages
Elsevier, 2016. Vol. 85, 1026-1035 p.
Keyword [en]
Diffusion, Innovation, Solar photovoltaics, Business model, Renewable energy, Product life cycle
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-171866DOI: 10.1016/j.renene.2015.07.069ISI: 000363344800101ScopusID: 2-s2.0-84938351504OAI: diva2:844766

QC 20150810

Available from: 2015-08-08 Created: 2015-08-08 Last updated: 2015-12-10Bibliographically approved
In thesis
1. Diffusion of dynamic innovations: A case study of residential solar PV systems
Open this publication in new window or tab >>Diffusion of dynamic innovations: A case study of residential solar PV systems
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

In the literature on diffusion of innovations, it is widely known that the characteristics and socio-environmental settings of adopters do evolve in space and time. What about innovations themselves? During the diffusion process, don’t some innovations continuously alter in space and time? If so, how does the dynamic character of an innovation influence the diffusion process? In previous research, it has been often assumed that innovations do not continuously alter or get modified when diffusing from a source to potential adopters. This assumption may mean that the innovation is invariant as it diffuses in time and space—i.e., the innovation does not have a continuously dynamic character. Is it always the case in practice?   

A single form of an innovation is not always necessarily compatible with the preferences, limitations, and residential settings of adopters. The innovation might appear in different forms when it diffuses in space and time, i.e., it is “dynamic”. This PhD thesis aims to explore how dynamic innovations diffuse in space and time—a relatively understudied topic in research. In doing so, it distinguishes between the diffusion of dynamic innovations and other kinds of innovations. Anchored on the case of diffusion of residential solar photovoltaic (PV) systems, this thesis is composed of a cover essay and six appended papers. The first two appended papers are systematic literature reviews, aiming at understanding the state of the art of the theoretical and contextual research domains. The third paper is based on a case study in southern Germany and explores the diffusion of a dynamic innovation at adopter level. The fourth paper is empirically focused on a local firm’s business model, which is assumed to be a key to understanding the mechanism behind the diffusion of dynamic innovations. The fifth paper is based on lead market hypothesis and tries to explore the diffusion of innovations at the regional level. The sixth paper studies a semi-hypothetical case and offers an innovative method to forecast the diffusion of innovations in general.

The contribution of this PhD thesis lies in three research dimensions: context, method, and theory. Firstly, the thesis takes the existing theories (e.g., diffusion of innovations theory and lead market hypothesis) and methods (e.g., case study) and applies them in different contexts of the diffusion of residential solar PV systems: the individual, sub-national, and national level. Secondly, it proposes a new research method, namely the finite element method for forecasting the diffusion of innovations, based on an existing theory (e.g., wave-like diffusion of innovations in time and space) and context (e.g., solar PV systems). Last but not least, the cover essay of this thesis takes the findings of the appended papers and employs an extension of theory of diffusion of innovations. In doing so, it includes the role of the dynamic characteristic of innovations that do alter in time and space during the diffusion process.

Overall, the findings of this thesis indicate that the diffusion of dynamic innovations is different in nature, and continuous efforts of change agents are critical for enhancing the diffusion of such innovations. Change agents are especially important to help potential adopters to find out and develop the form of innovation that best fits their needs, limits, and preferences, which are heterogeneous in space and time. 

Place, publisher, year, edition, pages
Sweden: KTH Royal Institute of Technology, 2015. xiii, 71 p.
TRITA-IEO, ISSN 1100-7982 ; 2015:09
Dynamic innovations, diffusion, residential solar, photovoltaics, time, space
National Category
Economics and Business Sociology
Research subject
Industrial Engineering and Management
urn:nbn:se:kth:diva-177020 (URN)978-91-7595-763-0 (ISBN)
Public defence
2015-12-11, E2, Lindstedtsvägen 3, KTH, Stockholm, 14:00 (English)
European Doctorate in Industrial Management

QC 20151117

Available from: 2015-11-17 Created: 2015-11-13 Last updated: 2016-02-15Bibliographically approved

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