Solar business model adoption by energy incumbents: the importance of strategic fit

Economic analysis of the early market of centralized photovoltaic parks in Sweden

“…This indicates that there is a need for added values for investors. These can be either economic, such as premium renumeration through corporate-PPA contracts, which in addition also reduces the risk for the producer and consequently the end CoC [10,11,20,36,64e66], or of other character, such as increased sustainability, fair cost, social identity, induced innovativeness in the involved companies [73] corporate goals and customer acquisition [34]. Indeed, the parks in the interview study have either been realized under corporate-PPA or cooperative ownership business models.…”

“…For cooperative ownership business models, an economic association is usually formed, which takes over the ownership of the park from the client who ordered it and sells shares of the cooperative to private individuals or companies [34]. This business model requires larger administrative resources since statutes, accounting, annual meetings and management of shares are required to be handled by the economic association.…”

“…However, despite the; (1) limited policy incentives aimed at centralized PV parks in Sweden, (2) the very pessimistic forecasts regarding future PV, and (3) the fact that Swedish incumbent utilities have so far marginally contributed to PV diffusion through own investments in centralized PV parks, but rather have taken roles as brokers in turnkey decentralized PV system sales, purchasers of PV electricity and community solar intermediators [13,21,33,34], an increasing number of PV parks have been commissioned in Sweden in recent years (see Appendix A) and plans for more and larger PV parks are being communicated. As can be seen in Appendix A, many of the recent investors are not incumbent utilities.…”

Interaction between Energy Incumbents and Solar Entrants: Relationship Status Complicated

“…In the Swedish context, they have had a central role in building and operating electricity systems for over a century (Högselius and Kaijser, 2010) and are often important instrument for the municipalities' strive to achieve their sustainability goals (Gustafsson and Mignon, 2020), acting as the 'extended arm' of local policymakers in driving the energy transition forward. This is also one reason why they have started to offer solar turnkey systems and engage with other solar business models (Altunay et al, 2021). As described above, municipal electric utilities sell PV turnkey systems together with solar firms, who represent the 'new entrants' in these cases, being rather small firms that entered the energy sector recently to engage with the novel solar PV technology.…”

“…Solforum 2019 and Energidagen Väst 2021), as well as the authors' decadelong experience in the energy sector and previous research projects about the solar PV market in Sweden. The authors' experience includes previous studies of solar business models, including the turnkey business model, from the perspective of both electric utilities and solar firms (Altunay et al, 2021;Aspeteg and Bergek, 2020).…”