Exploring the Role of Business Models in Large-Scale Diffusion of Solar Photovoltaics - A study of demand-side solar firms in Sweden

Abstract: A rapid and large-scale diffusion of renewable energy technologies, like solar photovoltaics (PV), is crucial to slow down climate change. Research on technology diffusion explains that the rate and scale at which a new technology diffuses in society is influenced by the actors, networks, and institutions that make up its innovation system. Yet, little is known about firms participating in the deployment of solar PV, such as the firms that sell, install, or lease the technology. Particularly, there is a lack of knowledge on what business models firms use to commercialize solar PV, how these business models can be differentiated, and what influences the prevalence of different business models on a market. Such knowledge is essential for understanding under what conditions different business models emerge which, in turn, can lead to improved policy design targeted at facilitating large-scale diffusion of solar PV. This licentiate thesis takes a qualitative approach to explore business models’ role in large-scale diffusion of solar PV. Based on a literature review and a case study of firms involved with solar PV deployment in Sweden, the thesis identifies six types of solar business models that are differentiated based on value proposition, value creation and delivery system, and value capture. The results also show that the prevalence of business models is influenced by firm-internal factors (e.g., resources, partnerships, and strategies) and contextual factors (e.g., technology and institutions). These findings stress the importance of considering both an actor- and system perspective on business models in policy design.