IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v13y2020i3p670-d316471.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/13/3/670/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/13/3/670/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tsikalakis, Antonis & Tomtsi, T. & Hatziargyriou, N.D. & Poullikkas, A. & Malamatenios, Ch. & Giakoumelos, E. & Jaouad, O. Cherkaoui & Chenak, A. & Fayek, A. & Matar, T. & Yasin, A., 2011. "Review of best practices of solar electricity resources applications in selected Middle East and North Africa (MENA) countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2838-2849, August.
    2. Kinab, E. & Elkhoury, M., 2012. "Renewable energy use in Lebanon: Barriers and solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4422-4431.
    3. Claire Weiller & Tianjiao Shang & Andy Neely & Yongjiang Shi, 2015. "Competing and co-existing business models for EV: lessons from international case studies," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 15(2), pages 126-148.
    4. Houda Elmustapha & Thomas Hoppe & Hans Bressers, 2018. "Understanding Stakeholders’ Views and the Influence of the Socio-Cultural Dimension on the Adoption of Solar Energy Technology in Lebanon," Sustainability, MDPI, vol. 10(2), pages 1-17, January.
    5. Smith, Adrian & Raven, Rob, 2012. "What is protective space? Reconsidering niches in transitions to sustainability," Research Policy, Elsevier, vol. 41(6), pages 1025-1036.
    6. Verbong, Geert P.J. & Beemsterboer, Sjouke & Sengers, Frans, 2013. "Smart grids or smart users? Involving users in developing a low carbon electricity economy," Energy Policy, Elsevier, vol. 52(C), pages 117-125.
    7. Jablonski, Sophie & Tarhini, Mohamad & Touati, Manaf & Gonzalez Garcia, David & Alario, Juan, 2012. "The Mediterranean Solar Plan: Project proposals for renewable energy in the Mediterranean Partner Countries region," Energy Policy, Elsevier, vol. 44(C), pages 291-300.
    8. David Ockwell & Joanes Atela & Kennedy Mbeva & Victoria Chengo & Rob Byrne & Rachael Durrant & Victoria Kasprowicz & Adrian Ely, 2019. "Can Pay-As-You-Go, Digitally Enabled Business Models Support Sustainability Transformations in Developing Countries? Outstanding Questions and a Theoretical Basis for Future Research," Sustainability, MDPI, vol. 11(7), pages 1-21, April.
    9. Provance, Mike & Donnelly, Richard G. & Carayannis, Elias G., 2011. "Institutional influences on business model choice by new ventures in the microgenerated energy industry," Energy Policy, Elsevier, vol. 39(9), pages 5630-5637, September.
    10. Charles Edquist, 2004. "Reflections on the systems of innovation approach," Science and Public Policy, Oxford University Press, vol. 31(6), pages 485-489, December.
    11. Geels, Frank W., 2010. "Ontologies, socio-technical transitions (to sustainability), and the multi-level perspective," Research Policy, Elsevier, vol. 39(4), pages 495-510, May.
    12. Mahama, Amadu, 2012. "2012 international year for sustainable energy for all: African Frontrunnership in rural electrification," Energy Policy, Elsevier, vol. 48(C), pages 76-82.
    13. Henry Chesbrough & Richard S. Rosenbloom, 2002. "The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 529-555, June.
    14. Liliana Doganova & Marie Eyquem-Renault, 2009. "What do business models do? Narratives, calculation and market exploration," Post-Print halshs-00347615, HAL.
    15. Huijben, J.C.C.M. & Verbong, G.P.J., 2013. "Breakthrough without subsidies? PV business model experiments in the Netherlands," Energy Policy, Elsevier, vol. 56(C), pages 362-370.
    16. Luis Escobar & Harrie Vredenburg, 2011. "Multinational Oil Companies and the Adoption of Sustainable Development: A Resource-Based and Institutional Theory Interpretation of Adoption Heterogeneity," Journal of Business Ethics, Springer, vol. 98(1), pages 39-65, January.
    17. Oliveira, Pedro & von Hippel, Eric, 2011. "Users as service innovators: The case of banking services," Research Policy, Elsevier, vol. 40(6), pages 806-818, July.
    18. Gabriel, Cle-Anne & Kirkwood, Jodyanne, 2016. "Business models for model businesses: Lessons from renewable energy entrepreneurs in developing countries," Energy Policy, Elsevier, vol. 95(C), pages 336-349.
    19. Engelken, Maximilian & Römer, Benedikt & Drescher, Marcus & Welpe, Isabell M. & Picot, Arnold, 2016. "Comparing drivers, barriers, and opportunities of business models for renewable energies: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 795-809.
    20. Geels, Frank W., 2002. "Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study," Research Policy, Elsevier, vol. 31(8-9), pages 1257-1274, December.
    21. Anna S. Cui & Fang Wu, 2016. "Utilizing customer knowledge in innovation: antecedents and impact of customer involvement on new product performance," Journal of the Academy of Marketing Science, Springer, vol. 44(4), pages 516-538, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Walrave, Bob & Talmar, Madis & Podoynitsyna, Ksenia S. & Romme, A. Georges L. & Verbong, Geert P.J., 2018. "A multi-level perspective on innovation ecosystems for path-breaking innovation," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 103-113.
    2. Catia Milena Lopes & Annibal José Scavarda & Guilherme Luís Roehe Vaccaro & Christopher Rosa Pohlmann & André Luis Korzenowski, 2018. "Perspective of Business Models and Innovation for Sustainability Transition in Hospitals," Sustainability, MDPI, vol. 11(1), pages 1-19, December.
    3. Capellán-Pérez, Iñigo & Campos-Celador, Álvaro & Terés-Zubiaga, Jon, 2018. "Renewable Energy Cooperatives as an instrument towards the energy transition in Spain," Energy Policy, Elsevier, vol. 123(C), pages 215-229.
    4. Rachel Greer & Timo Wirth & Derk Loorbach, 2023. "The Circular Decision-Making Tree: an Operational Framework," Circular Economy and Sustainability, Springer, vol. 3(2), pages 693-718, June.
    5. André Sorensen & Anna-Katharina Brenner, 2021. "Cities, Urban Property Systems, and Sustainability Transitions: Contested Processes of Institutional Change and the Regulation of Urban Property Development," Sustainability, MDPI, vol. 13(15), pages 1-19, July.
    6. Mock, Mirijam & Omann, Ines & Polzin, Christine & Spekkink, Wouter & Schuler, Julia & Pandur, Vlad & Brizi, Ambra & Panno, Angelo, 2019. "“Something inside me has been set in motion”: Exploring the psychological wellbeing of people engaged in sustainability initiatives," Ecological Economics, Elsevier, vol. 160(C), pages 1-11.
    7. Kriechbaum, Michael & Posch, Alfred & Hauswiesner, Angelika, 2021. "Hype cycles during socio-technical transitions: The dynamics of collective expectations about renewable energy in Germany," Research Policy, Elsevier, vol. 50(9).
    8. van Geenhuizen, Marina & Ye, Qing, 2014. "Responsible innovators: open networks on the way to sustainability transitions," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 28-40.
    9. Hossein Heirani & Naser Bagheri Moghaddam & Sina Labbafi & Seyedali Sina, 2022. "A Business Model for Developing Distributed Photovoltaic Systems in Iran," Sustainability, MDPI, vol. 14(18), pages 1-21, September.
    10. Weigelt, Carmen & Lu, Shaohua & Verhaal, J. Cameron, 2021. "Blinded by the sun: The role of prosumers as niche actors in incumbent firms’ adoption of solar power during sustainability transitions," Research Policy, Elsevier, vol. 50(9).
    11. Fuenfschilling, Lea & Binz, Christian, 2018. "Global socio-technical regimes," Research Policy, Elsevier, vol. 47(4), pages 735-749.
    12. Pesch, Udo, 2015. "Tracing discursive space: Agency and change in sustainability transitions," Technological Forecasting and Social Change, Elsevier, vol. 90(PB), pages 379-388.
    13. Geels, Frank W., 2020. "Micro-foundations of the multi-level perspective on socio-technical transitions: Developing a multi-dimensional model of agency through crossovers between social constructivism, evolutionary economics," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    14. Kivimaa, Paula & Kern, Florian, 2016. "Creative destruction or mere niche support? Innovation policy mixes for sustainability transitions," Research Policy, Elsevier, vol. 45(1), pages 205-217.
    15. Svensson, Oscar & Nikoleris, Alexandra, 2018. "Structure reconsidered: Towards new foundations of explanatory transitions theory," Research Policy, Elsevier, vol. 47(2), pages 462-473.
    16. Pel, Bonno & Haxeltine, Alex & Avelino, Flor & Dumitru, Adina & Kemp, René & Bauler, Tom & Kunze, Iris & Dorland, Jens & Wittmayer, Julia & Jørgensen, Michael Søgaard, 2020. "Towards a theory of transformative social innovation: A relational framework and 12 propositions," Research Policy, Elsevier, vol. 49(8).
    17. Rosalba Ortiz & Jordi Peris, 2022. "The Role of Farmers’ Umbrella Organizations in Building Transformative Capacity around Grassroots Innovations in Rural Agri-Food Systems in Guatemala," Sustainability, MDPI, vol. 14(5), pages 1-25, February.
    18. Nafiisa Sobratee & Rashieda Davids & Chuma B. Chinzila & Tafadzwanashe Mabhaudhi & Pauline Scheelbeek & Albert T. Modi & Alan D. Dangour & Rob Slotow, 2022. "Visioning a Food System for an Equitable Transition towards Sustainable Diets—A South African Perspective," Sustainability, MDPI, vol. 14(6), pages 1-23, March.
    19. Hamid El Bilali, 2019. "The Multi-Level Perspective in Research on Sustainability Transitions in Agriculture and Food Systems: A Systematic Review," Agriculture, MDPI, vol. 9(4), pages 1-24, April.
    20. Rosenbloom, Daniel & Berton, Harris & Meadowcroft, James, 2016. "Framing the sun: A discursive approach to understanding multi-dimensional interactions within socio-technical transitions through the case of solar electricity in Ontario, Canada," Research Policy, Elsevier, vol. 45(6), pages 1275-1290.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:13:y:2020:i:3:p:670-:d:316471. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.