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Challenges and Opportunities of Business Models in Sustainable Transitions: Evidence from Solar Energy Niche Development in Lebanon

Author

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  • Houda Elmustapha

    (College of Business Administration (COBA), American University in the Emirates, International Academic City, Dubai P.O. Box 503000, UAE)

  • Thomas Hoppe

    (Department of Multi Actor Systems, Faculty of Technology, Policy and Management (TPM), Delft University of Technology, Jaffalaan 5, 2628 BX Delft, The Netherlands)

Abstract

Although business models presumably have a prominent role in socio-technical change remarkably little research has been conducted in this domain, more particularly in the context of developing economies. In this paper, we tap into this knowledge gap and study business model components and the challenges they face. We argue that the market value of renewable energy technologies will increase when new business models are implemented to overcome financial and institutional challenges. We complement concepts of the business model literature with the insights from the sustainable transitions literature. This paper addresses two research questions: What are the challenges of business and financial models in the transition towards decentralized solar energy driven systems? And what are the promising opportunities for new business models in a developing country context? To answer these research questions, we use a case study research design focusing on niche market development of solar thermal and solar photovoltaic (PV) technology in Lebanon. Data collection involved analysis of relevant text documents and expert interviews with 30 informants across different groups of stakeholders. Data analysis involved qualitative interpretation of collected data against concepts from the business model and Strategic Niche Management literatures. The results show that business model challenges initially were highly dependent on donor aid, which contributed to the launch and network creation of niche markets. Later, a shift to micro-finance and business startup models was observed, which showed promising development. Knowledge transfer and community empowerment were found to play an important role in developing new business models that involve consumers more closely. As this development is expected to take place more often, we expect that new opportunity pathways will develop in developing economies like Lebanon.

Suggested Citation

  • Houda Elmustapha & Thomas Hoppe, 2020. "Challenges and Opportunities of Business Models in Sustainable Transitions: Evidence from Solar Energy Niche Development in Lebanon," Energies, MDPI, vol. 13(3), pages 1-18, February.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:3:p:670-:d:316471
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    Cited by:

    1. Roberto Hernández-Chea & Akriti Jain & Nancy M. P. Bocken & Anjula Gurtoo, 2021. "The Business Model in Sustainability Transitions: A Conceptualization," Sustainability, MDPI, vol. 13(11), pages 1-25, May.
    2. Milou Derks & Frank Berkers & Arnold Tukker, 2022. "Toward Accelerating Sustainability Transitions through Collaborative Sustainable Business Modeling: A Conceptual Approach," Sustainability, MDPI, vol. 14(7), pages 1-20, March.
    3. Aizada Zhakupova & Lambekova Aigerim & Syzdykova Elmira & Syzdykova Dinara & Zhanseitov Azamat, 2021. "Impact of the Adopted Financial Processes for Carrying Out Green Energy Projects in Georgia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 57-61.
    4. Ramón López Rodríguez & Francisco R. Durán Villa & María José Piñeira Mantiñán, 2021. "The Lessons of Public–Private Collaboration for Energy Regeneration in a Spanish City. The Case of Txantrea Neighbourhood (Pamplona)," Sustainability, MDPI, vol. 13(4), pages 1-19, February.

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