Literaturereview 12jan2018
Literaturereview 12jan2018
Literaturereview 12jan2018
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The energy sector has for long been run by large enterprises and governmental
renewable energy solutions has to be undertaken. Due to the high costs of such
switching governments are not able to provide the required investments alone
stakeholders have to work together (Linton, 2002). Entrepreneurs can be a great fit
this review report, the aim is to review the current status of entrepreneurship in the
solar energy market. We provide an overview of the current solutions that are carried
and their components towards developing a successful firm, and finally we provide an
overview of the financial and economic aspects. We show, while different business
models exist, entrepreneurs have various changes to establish new company for
providing basic needs as well as integrated solutions. Due to high demands in the
energy sector, entrepreneurs are able to seize high potentials in the market by
focusing on producing solutions that leads to cost reduction in the upfront. Directions
for future research are also discussed to provide insights for improving sustainability
In this context of complexity, active elements, basic traits, and opportunity creation in
solar market would be demonstrate from innovative perspectives. On the same line,
this literature review indicates the nexus of opportunities in which how exchanges
describe the ecosystem’s elements including firms which are direct value creators and
opportunities (Overholm, 2014). Emerging markets like solar energy may create
of value creation.
2. Practical opportunity, which helps new entrants to access a network that has
Before we start to describe the well-suited business model for solar energy services
firm, it has to be mentioned that the notion that differentiates this business model
from others is the highly effective actors on the model. Basically, clean technology
installation, and potentially learning cost (Overholm, 2014). Thus, the investment
scale in solar energy would be huge burden on the cost and price balance in the
market; however, according to (Overholm, 2014), the service business model has
• Taking on the initial efforts of selecting, installing , and securing permits for
the technology.
On other block of business model, financial model has been formed in two different
ways (Figure 1). The firms use hiring purchase (leasing) whereby end-customers have
monthly fixed fee to use solar panels, or a Power Purchase Agreement or PPA
(Overholm, 2014). PPA was invented during the US utility deregulation in 1978 for
Intermediary business firm also have similar arrangement of production, but the
Business models are in general terms categorized under three main categories:
economic, operational, and strategic (Morris, Schindehutte, & Allenc, 2005). The goal
Initially the solar market has gone through three main evolutionary stages (L.
Frantzis, Graham, Katofsky, & Sawyer, 2008). Firstly, businesses were focusing on
manufacturing and supply of solar systems. Next, third parties got involved to install
solar systems and provide electricity. Finally, integration businesses started to emerge
to solve more basic daily needs. In developing countries four distinct business models
business model has also effects on the financials of the companies (Loock, 2010).
Due to the high costs associated with installation of solar solutions, social
entrepreneurs have designed various business models on small to large scales. Due to
the requirements for high initial capital investments, the service-driven business
reduction of energy solution is the most important element of the business model
Further, it was also found that businesses that lag behind in marketing and sales are
more rejected by investors than those that just lag behind in innovativeness. This
indicates that innovativeness is important only if it also provides sales in line with or
Interestingly, the requirement for cost reduction has been the key success for business
in developing countries. For instance, in Africa M-Kopa has successfully expanded its
sales by providing affordable products for people with very low income (Faris, 2015).
Similarly, in India social entrepreneurs in rural areas have provided solar solutions. In
conclusion, although innovativeness in the solar entrepreneurship has great values but
reducing costs and providing affordable business models have high potentials for
success.
To assess a firm in the solar energy market regardless of type and size there are few
technical aspects that have to be considered. First of all, the rule of thumb for
optimization on the system which are strongly dependent on the algorithms they are
programed on. In other words, to reach reliable assessment in the energy sector we
need to consider the size of energy storage, cost of production, load profile, and
finally solar radiation profile (Zhang, Li, Ge, & Li, 2016).
Mathematical assessment
To exchange well the mathematical approach in an easy reading manner, this section
indicates key elements of appraisal for solar energy firms. This starts with
characteristic for coverage of the power in the given time range (Zhang, Li, Ge, & Li,
2016).
table of guide for formulation and calculation (Zhang, Li, Ge, & Li, 2016).
In access to DER, it possible to calculate the Cost Of Energy production or COE
For calculation of the cost for square meters in case of limited accessibility of
compute the metric of solar plan to reach the cost of energy production:
Economical analysis
For evaluation of economical criteria of the projects, the key aspects are time, cost ,
and profit. They all appear in form of (Dağtekin, Kaya, Öztürk, & Kiliç, 2014):
C. Benefit/cost ration
D. Payback period
aspects, the consideration of other financial aspects are necessary to reach the future
value. Under this consideration, the elements in the table below are functional:
PV Present Value
n Number of period
To demonstrate the possible future value, all these elements are utilized in the
following equations to calculate the present, the net present and the future values,
entrepreneurship without covering distinctive research areas under the subject which
merit readers think out about necessity of few substantial factors to grasp the
dynamics on the market and role of entrepreneurship in it. Therefore, this literature
review firstly demonstrates the key elements in the market with identifying a
nature of the interaction between them in order to reach a clear view of their roles.
In the same pattern, the profit of those companies and their monetary policy to
overcome financial barriers vis-a-via other energy supplier in the market has been
in the United States energy policy. And indeed, to support the idea of existing
articles to figure out the rule of thumb in this business in terms of recognition and
the market, two approaches for assessment have been described in a way that lead
readers have tenable view on the market size in economic and technical point of view.
While several research studies have analyzed entrepreneurship in the solar energy
sector, no research has been conducted on analyzing the impacts and potentials of
Chesbrough, H., & Rosenbloom, R. S. (2002). The Role of the business model in
capturing value from innovation: evidence from xerox corporation’s technology spin-
Dağtekin, M., Kaya, D., Öztürk, H. H., & Kiliç, F. Ç. (2014). A Study of Techno-
https://www.bloomberg.com/features/2015-mkopa-solar-in-africa/
Gabriel, C.-A., & Kirkwood, J. (2016). Business models for model businesses:
, 95, 336-349.
Greentechmedia: https://www.greentechmedia.com/articles/read/who-reigns-supreme-
in-residential-solar#gs.iimWlxk
L. Frantzis, Graham, S., Katofsky, R., & Sawyer, H. (2008). Photovoltaics Business
Linton, J. D. (2002). Implementation research: state of the art and future directions .
Loock, M. (2012). Going beyond best technology and lowest price: on renewable
Moore, J. F. (2006). Business ecosystems and the view of the firm . THE ANTITRUST
BULLETIN , 51.
Morris, M., Schindehutte, M., & Allenc, J. (2005). The entrepreneur's business model:
Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for
Wüstenhagen, R., & Menichetti, E. (2012). Strategic choices for renewable energy
Zhang, X., Li, M., Ge, Y., & Li, G. (2016). Techno-Economic Feasibility Analysis of
108, 1362-1371.