Sustainable Business Innovation of Photovoltaic Water Pumping Systems

University dissertation from KTH Royal Institute of Technology

Abstract: The development of renewable energy technology provides an effective approach to replace fossil fuels for greenhouse gas (GHG) emission. Technological innovation and transfer are the main driving forces in promoting renewable energy usage, because of the better efficiency and economic payback under an emission reduction target. With three of the mechanisms of emission trading originating from the Kyoto Protocol, the most wildly accepted and important mechanism between developed and developing countries is the Clean Development Mechanism (CDM). The CDM has been implemented contributing the most of the trading carbon credits. In this study, by extracting and building an exclusive database of issued Chinese CDM projects, a modified multivariable logistic regression model for technology transfer’s correlation test with 11 extended indicators was investigated for the first time. Renewable energy projects were analyzed with certified emission reduction (CER) sizes, economic development, and geographic scopes.In addition, technological innovation should also be enhanced with new business developments to demonstrate and scale up technologies for better economic and environmental performances. This doctoral thesis studied photovoltaic water pumping (PVWP) technology as a technological solution for integration with the new business model for development and co-benefits. The integration of PVWP with water saving irrigation techniques and sustainable management of water resources, leads to technical innovations, economic benefits, and climate benefits. Field measurements at a pilot PVWP system in Inner Mongolia were conducted with detailed economic performance analyses. Different scenarios for PVWP systems considering variant market incentives were proposed with internal rate of return (IRR), and discounted payback period analyses to develop a new business model approach for implementing PVWP systems with multi-value propositions. The environmental externalities were successfully addressed by evaluating the CO2 emission reduction credits. The economic assessment of feasible and optimal production processes for implementing PVWP systems in dairy milk production was conducted with self-supplied energy and forage assumptions. In comparison with other financing mechanisms, discrete choice model analyses were employed with interviews and costumer behavior surveys to explore the willingness to purchase through crowd funding mechanisms in financing integrated PVWP systems.The results showed that emission reduction mechanisms, such as CDM, have promoted the renewable energy development in China with the national incentives at an entrance level. Yet, the limited sizes and lower income from CERs of renewable energy projects than other projects, required renewable energy projects to develop more advanced technological innovations and business model innovations.  The PVWP systems represent the better technical and economic solutions under a feasible innovated business model in comparison with traditional photovoltaic (PV) systems and current PV business models. The dairy farms with integrated PVWP systems and self-sufficient feeds could improve their investment performance through extra energy saving and CO2 emission reductions. The semi-structured interviews and customer surveys’ results showed that customers can tolerate high prices, and are willing to crowd-fund nutritious and secure cow milk with environmental compensation characters. The results from the PVWP technology integration in China as a specific PV application study can be further applied for the business model of innovation of renewable energy systems in other regions of the world under emission reduction targets leading to economic and environmental benefits.