Exploiting opportunities in solar and wind power diffusion: the business models of private intermediaries

Other conference contribution, 2017

Entrepreneurial actors play an important role in sustainability transitions, most notably by furthering new technologies and solutions (or disrupt existing ones) through their proprietary business activities. This paper focuses on one particular type of entrepreneurial actor: diffusion intermediaries, i.e. actors that act as brokers between technology adopters and the providers of resources needed to adopt and implement a technology that is available more or less “off-the-shelf”. While it is theoretically clear that they can play an important role for sustainability transitions, a more detailed understanding of what value(s) they create for their clients and how that translates into value for the diffusion process as whole is lacking. The purpose of the paper is, therefore, to investigate how diffusion intermediaries, through their business models, influence technology adoption and diffusion. The paper is based on a qualitative survey of 14 solar PV and wind power intermediaries in Sweden. The study shows that diffusion intermediaries in both fields create value primarily through coordination and technology transfer rather than match-making. Wind power intermediaries serve a more homogenous set of larger and more investment-oriented customers than solar PV intermediaries, which leads to differences in terms of value propositions: wind power intermediaries sell an expected return on investment, whereas solar PV intermediaries sell turnkey power plants. The study also reveals the inherent tradeoffs in business model design – both between different value dimensions (e.g. legitimacy vs. quality or delivery time vs technology updates) and between value creation and value capture. These tradeoffs raise interesting questions with regard to how diffusion intermediaries influence the overall diffusion process. Are the values they choose to emphasize supportive of a transition to sustainable energy system or do their business model choices lead to unintended barriers at the system level?