Renewable and Sustainable Energy Reviews 60 (2016) 795–809

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

journal homepage: www.elsevier.com/locate/rser

Comparing drivers, barriers, and opportunities of business models

for renewable energies: A review
Maximilian Engelken a,b,n, Benedikt Römer a, Marcus Drescher b, Isabell M. Welpe b,
Arnold Picot c
a
Center for Digital Technology and Management CDTM, Technische Universität München & Ludwig-Maximilians-Universität München, Arcisstraße 21,
D-80333 München, Germany
b
Chair for Strategy and Organization, Technische Universität München (TUM), Arcisstraße 21, D-80333 München, Germany
c
Ludwig-Maximilians-Universität München (LMU), Ludwigstr. 28, D-80539 München, Germany

art ic l e i nf o a b s t r a c t

Article history: This article systematically reviews the emerging field of research on business models for renewable energies,
Received 31 December 2014 differentiating between developing and industrialized countries. The key findings on developing countries are
Received in revised form as follows: first, there is a lack of quantitative data; second, opportunities are driven primarily by unfulfilled
17 September 2015
basic needs and micro-finance, whereas corruption and weak electricity grids are the main barriers; and third,
Accepted 17 December 2015
Available online 10 February 2016
business models should be replicable. The key findings on industrialized countries are as follows: first,
opportunities are driven primarily by climate change mitigation and energy efficiency improvements; second,
Keywords: stuck thought patterns and high costs of energy storage are important barriers; and third, cooperation is a key
Renewable energy in future business models to handle increasing complexity. This review reveals implications for researchers and
Business model
policy-makers. Promising avenues for future research are the analysis of intermodal business models and
Country comparison
opportunities concerning energy self-supply and renewable district heating. Policy-makers are advised to
Driver
Barrier design legal frameworks that account for the global nature of the renewable energy challenge and are
Opportunity simultaneously adapted to regional disparities.
& 2015 Elsevier Ltd. All rights reserved.

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
2. A classification of renewable energies and business models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
3. Research methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797
4. Findings and discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797
4.1. Findings from the systematic analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797
4.1.1. Used methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
4.1.2. Used theories and concepts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
4.1.3. Business model components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
4.1.4. Renewable energy focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
4.1.5. Energy usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799
4.2. Synthesis of drivers, business opportunities and barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 802
4.2.1. Drivers for renewable energy business models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 802
4.2.2. Business opportunities for renewable energy business models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803
4.2.3. Barriers for renewable energy business models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
5. Summary of findings and future research agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805
6. Conclusion and implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808

n
Corresponding author. Tel: þ 49 89 289 28167.
E-mail addresses: engelken@cdtm.de (M. Engelken), roemer@cdtm.de (B. Römer).

http://dx.doi.org/10.1016/j.rser.2015.12.163
1364-0321/& 2015 Elsevier Ltd. All rights reserved.
796 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
1. Introduction
Due to globally shrinking public support for renewables and
related government subsidies [1], stakeholders in the energy sec-
tor can rely to a lesser extent on governmental financial support
for renewable energies. As a result, the industry needs to identify
new and self-sustaining business models for renewable energies to
ensure their ongoing growth [2].
Hence, a new field of research is emerging as scholars
increasingly combine the two buzzing areas of renewable energies
and business models (see Fig. 1). They apply the business model
concept to the energy sector to study business cases and factors
fostering or hindering their success. First, some scholars focus on
the perspective of certain stakeholders (e.g., [2–6]). For instance,
Andersen et al. [3] identified strong governmental support in the
form of tax incentives as a key driver for business models for
electric vehicles powered by renewable energy. Second, others
study business models for single renewable technologies (e.g., [7–
10]). Jolly et al. [8] present that photovoltaics provide a strong
business opportunity for social entrepreneurs by addressing the
worldwide 1.3 billion people without access to electricity. Third,
most researchers analyze business models for renewable energies
in specific regions ([11–14]). For example, Harish et al. [13] iden-
tified low power quality due to voltage fluctuations in rural areas
as a critical barrier to business models for renewable energies in
India. Analyzing the literature of this emerging field of research
shows that the business model concept is a helpful framework to
create in-depth insights on the level of single firms, technologies
or countries.
However, on a global level, the current research provides a
fragmented picture of the topic. Studies often pick single cases or
regions to analyze specific situations. A global and structured
overview of drivers, barriers and opportunities is missing. Such an
overview is important for researchers and policy-makers for
designing the right legal and policy frameworks to nourish viable
business models for renewable energies. It should account for the
global nature of climate change without neglecting regional dis-
parities. Thus, this review focuses on answering the following
questions. (1) How do researchers apply the business model
concept to the area of renewable energies? (2) Which methodol-
ogies and theoretical concepts are applied in connection with
research on business models for renewable energies? (3) What are
the drivers and barriers for business models for renewable ener-
gies, and what are promising opportunities in different regions of
the world?
Fig. 1. Results for the search terms “renewable energy”, “business model” and the
intersection of both on the database Scopus from 1990-2013.
These goals are accomplished by developing a conceptual fra-
mework at the intersection of business models and renewable
energies. To build the framework, the authors identified all papers
that fit the following criteria: central keywords that describe
renewable energies and business models in the title, abstract or
keywords of peer-reviewed articles within the scientific database
Scopus (see Section 3). The research framework is built by exam-
ining and structuring the methodologies, theories and findings of
the selected literature according to the following two-level struc-
ture: First, the distinction between industrialized and developing
countries is identified as the most helpful separator and thus
builds the main structuring unit for the entire analysis. It allows
for a better understanding of local disparities and global com-
monalities. Second, the three categories energy, methodology and
business model – each comprise of several units of analysis – are
identified and complement the developed framework. Finally, this
study provides an agenda for future research and highlights
important implications for actors in the energy sector, particularly
for policy-makers on how to support the emergence of viable
business models for renewable energies.
The remainder of this study is organized as follows: Section 2
explicates the exact scope of this review by defining the terms
renewable energy and business model. Section 3 explains the applied
methodology. Section 4 presents the findings of the systematic lit-
erature review and a synthesis of identified drivers, opportunities and
barriers for business models for renewable energies. Section 5 sum-
marizes the findings and a future research agenda, in which the
authors also formulate their implications for industry players and
policy-makers. Section 6 briefly concludes this review.
2. A classification of renewable energies and business models
For a precise understanding of the key research terms of this
review, this section provides a short definition and classification of
the terms renewable energies and business models.
Renewable energies are well described and defined in several
publications. To define renewable energies, the authors refer to the
generally accepted definition of the International Energy Agency
(IEA): “Renewable energy is derived from natural processes that
are replenished constantly. In its various forms, it derives directly
or indirectly from the sun, or from heat generated deep within the
earth. Included in the definition is energy generated from solar,
wind, biofuels, geothermal, hydropower and ocean resources, and
biofuels and hydrogen derived from renewable resources” [15,
p.11]. To elaborate upon this description, renewable energies are
comprised of solar photovoltaic, solar thermal, wind, tide, wave,
ocean, solid and liquid biofuel, biogas, geothermal, renewable
municipal waste and hydroelectricity. This definition does not
include industrial waste and non-renewable municipal waste.
A business model is a widely accepted concept among
researchers for analyzing how an organization, be it a multi-
national company or a new venture, works and what it does to
generate and capture value. However, there are many views of
how to actually describe and define the business model concept;
both academics and practitioners have heavily discussed, devel-
oped, and applied it in recent years [see 16,17–22]. In this review
of business models for renewable energies, the authors follow the
definition of Osterwalder [20], which combines many common
definitions. A business model consists of four basic elements: the
product, the customer interface, the infrastructure management
and the financial aspects. The product describes the area of busi-
ness and the value proposition the company offers to the market.
The customer interface explains which customers are targeted,
how the company delivers the product or services and how the
customer relationship is maintained. The infrastructure
 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809 797

management defines a firm's logistical approach and network that
the firm needs to deliver created value. The financial aspects
address the revenue model and the cost analysis [20]. The authors
decided to adopt this business model definition for the following
reasons: First, its classification within the business model litera-
ture and its purpose fit well to the application within this review.
Zott et al. [16] classified it as a concept for e-business. The field of
renewable energies today is comparable to the development of e-
business or electronic commerce around the early 2000s, when
Osterwalder’s concept was developed; in both cases, technological
changes revolutionize entire industries. Second, the precise par-
tition of Osterwalder’s framework allows for clear and simple
application. Finally, it has already been applied multiple times by
scholars within the energy research area [2,6,23,24].
3. Research methodology
In the following section, the authors comprehensively describe
the methodology of this review to enable fellow researchers to
fully understand the conducted approach and thus to confidently
(re)use the presented results of this systematic literature review.
This review follows the procedures for systematic literature
reviews outlined by Webster and Watson [25] and vom Brocke
et al. [26], which are common in both the energy sector and
management research [16,26–29]. The framework for this review
entails five sequential phases: defining the review scope, con-
ceptualizing topics, searching literature, analyzing and synthesiz-
ing the literature, and developing a research agenda [26].
The review scope of this study is to present a conceptual fra-
mework in order to present the status quo of research on business
models for renewable energies, to identify white research spots
and to draw policy recommendations (see Section 1). For the
conceptualization of the topic, the authors found that several
articles are characterized by a specific regional focus. Therefore,
structuring studies according to regions is the main structuring
unit. Additionally, the authors found that scholars discussed dri-
vers, barriers and opportunities of business models for renewable
energies, which therefore became an additional unit of analysis. In
addition to providing first concepts for the analysis, these insights
helped identify keywords for the literature search. Based on the
review of a number of key publications, the authors proceeded
with phase three and searched in a structured search process for
the relevant scientific papers using the scientific research database
Scopus. Scopus is one of the most important research databases
for business and energy research, listing all major journals. The
chosen approach ensures that no important publications of this
broad and interdisciplinary field are excluded. In the literature
search phase, the authors extended the initial search terms
“business model” and “renewable energy*” to the terms within the
definition of renewable energies by the International Energy
Agency (see Section 2). Finally, the search contained the following
keywords: “business model”, “energ*” and at least one of the fol-
lowing to describe renewable energies: “renewable*”, “hydro*”,
“geothermal”, “solar”, “tide”, “wave”, “ocean”, “wind”, “biofuel”,
“biogas”, or “municipal waste”. The authors followed the approach
by Zott and Amit [16] and searched in the title, abstract, and
keywords of papers. It was assumed that if the search terms could
not be found within these fields, the paper did not focus on the
targeted topic. Only peer-reviewed journal articles in English were
included in this review because they are generally considered to
be of higher quality and more mature than submissions in con-
ference proceedings or other publications [26]. This search led to a
total of 97 results.
The coding for the literature analysis (phase 4) was based on
Kossahl et al. [29] and Zott et al. [16] and was conducted in three
steps. In the first step, the authors studied all titles, keywords and
particularly the abstracts to evaluate the relevance of publications
for the topic of business models for renewable energies. Con-
sequentially, publications that did not fit the review scope were
excluded from further analysis (e.g., a few publications focused on
non-renewably produced hydrogen or were incorrectly classified
as peer-reviewed journal publications). To avoid neglecting rele-
vant studies, the authors additionally analyzed the citations of
papers, which were identified through the described methodology.
This led to the addition of a few studies. Finally, a total of 89
papers remained that were of high interest for the purpose of this
review.
In the second step, the authors thoroughly went through the
entire articles to classify them according to previously defined
concepts. For the classification of the research methodologies
applied in the analyzed publications, the authors defined six
categories based on the approaches of Cardenas et al. [30] and
Palvia et al. [31] (see Table 1).
Based on the method of Webster and Watson [25], it was
possible to identify additional interesting aspects during this
process and consequentially to refine and extend the concepts
used for the literature analysis. Thus, for the purpose of this study,
groups of countries determine the main unit of analysis and
categorization criteria. Furthermore, energy focus (regarding
renewable energy source and energy usage), methodological focus
and business model focus were identified and used as interesting
units of analysis. In the last step, the coding was completed and
the literature was categorized using all identified criteria.
4. Findings and discussion
4.1. Findings from the systematic analysis
This section presents the findings from the systematic analysis
of the 89 papers that remained following the above-described

Table 1
Classification of research methodologies.

Research methodology Description

Empirical Case study Defined as a study that uses qualitative data (e.g., interviews; could also be based on quantitative data) to analyze a
phenomenon in one or a few projects or organizations (cp., [31]).
Field study A study that uses qualitative data to analyze phenomena or processes but does not have a focus on only one or a few
projects or organizations (cp., [31]).
Quantitative research A study that quantitatively uses data (e.g., regression analysis).

Non-empirical Mathematical modeling A study that has at its core a model built of mathematical functions (e.g., optimization model, simulation; cp., [30]).
research
Literature review A study that reviews and analyzes existing literature (cp., [30]).
Conceptual research A study that does not fit into the other classifications and presents or discusses frameworks or concepts (cp., [30,31]).
798 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
20
18
No. of papers published
16
14
12
10
8
6 multiple times, which indicates the young age of this research
4 3
2 2
2 1 1 way, several of them examine business models without explicitly
0 0 0
0 referring to common studies or introducing the concept elabo-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year
Fig. 2. Number of papers published per year in the analyzed sample.
prescreening phase. Fig. 2 displays the number of papers pub-
lished per year, which reveals the quickly growing interest of the
scientific community.
Currently, the most important journals for this field of research
seem to be Energy Policy, followed by the Journal of Cleaner
Production and Renewable and Sustainable Energy Reviews. Most
of the journals in the sample have a focus on energy or the
environment, with some exceptions from the management lit-
erature (e.g., Organization Science, International Journal of Tech-
nology Management, Journal of Business Ethics). This variety of
journals shows the broad and interdisciplinary nature of the
emerging research field.
Many papers treat their research question while focusing on
specific countries. An overview of the chosen regional focus of the
articles can be found in Table 2. The authors systematically cate-
gorized the included countries according to the classification of
the International Monetary Fund (IMF)1. For this article, all coun-
tries on the IMF list of Advanced Economies are viewed as
industrialized countries, and all countries on the IMF list of
Emerging and Developing Economies are viewed as developing
countries. The authors found that a separate view on these two
categories of countries, which are in the following referred to as
focus regions, is reasonable and helpful because of the differing
challenges, drivers, and business opportunities in these groups of
economies and the differing theories and methodologies applied
in research.
4.1.1. Used methodologies
The authors categorized all publications according to the six
categories of research methodologies, which were introduced in
Section 3. Most articles in the sample are field studies (22), case
studies (20) and conceptual research papers (21). It is apparent
that quantitative research and mathematical modeling research
articles focus almost exclusively on industrialized countries,
whereas research on developing countries is primarily accom-
plished with qualitative case and field studies. The more qualita-
tive nature of research on developing countries is plausible due to
the lack of available quantitative data. In addition to the study of
Richter [6], ten other papers were literature reviews. They inves-
tigate specific technological aspects, single countries, or small
projects within the area of renewable energies. An overview of
applied research methodologies is given in Table 3.
4.1.2. Used theories and concepts
Table 4 gives an overview of the most important theories and
concepts used within the 89 selected papers, classified by focus
region. The authors list only theories and concepts that have been
1
See http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/groups.htm
(accessed 19 March, 2014).
18 explicitly named, introduced or, in some cases, developed further.
16 All of them belong to the field of economics or business research.
15
The authors aim with this overview to help fellow researchers
13
build on previous research and easily identify white spots. Looking
9
at the table, it is noticeable that a fair number of theories and
concepts are applied. However, only a few have been applied
6
3 area. Although all authors use the business model concept in some
rately. Therefore, only studies that introduce it and refer explicitly
to other studies to explain their understanding of the business
model concept are listed in Table 4.
4.1.3. Business model components
As shown in Fig. 3, the application of each of the four business
model components in the papers is noticeably different in quan-
tity. Focusing on the concept of business models, 82 out of 89
papers explicitly describe the value proposition, which is per-
ceived as the most obvious and core aspect of a business model.
One finding is that the majority of papers focus on the economic
aspects of the business model, which is aggregated in the category
financials. Significantly fewer papers describe the more complex
elements of a business model: Two thirds address the infra-
structure management, and only half depict the customer inter-
face. An expected but nonetheless highly revealing insight is that
papers that focus on industrialized countries tend to investigate
more complex business models for renewables than papers that
focus on developing countries. Budde Christensen et al. [4], for
example, present a case study on electric cars; “Better Place in
Denmark” is described as an innovative business model developed
in stimulating surrounding conditions. For this purpose, the
authors discuss in detail all four pillars of the business model and
include diverse theoretical business model approaches and fra-
meworks. The papers by Richter [6,10] and Funkhouser et al. [32]
are three other examples studying utilities’ business models for
renewable energies and the challenges they face, particularly in
the field of distributed PV generation. Richter focuses his research
on industrialized countries, identifying two generic business
models in the field of renewable energies, and he further discusses
them to study barriers for business model innovation. Richter’s
holistic and in-depth approach, drawing conclusions on business
model innovation and policy makers’ support, is rather typical for
papers focused on industrialized countries. In contrast, authors
who focus on developing countries tend to study rather simple
business models, focusing particularly on financials and ignoring
or only lightly describing other pillars of the examined business
model. The analysis of the papers further reveals that studying the
economic, environmental, and social feasibility of technologies or
technological areas (e.g., PV or biofuel) is an important field of
study [33–36].
4.1.4. Renewable energy focus
As described in Section 1, according to the IEA, renewable
energies include solar photovoltaic, solar thermal, wind, tide,
wave, ocean, biofuel, biogas, renewable municipal waste, geo-
thermal and hydroelectricity. For this literature review, investi-
gating the papers’ focus on different renewable energy sources
appeared to be promising2. One reason was to identify whether
certain renewable energy sources are of particular interest for
2
If a study clearly focuses on one or more renewable energy sources, it is
counted accordingly. If a study discusses more than three different energy sources
or if it does not concentrate on any renewable source in particular but rather on
suitable business models for the whole sector, it is counted as “renewables in
general”.
 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809 799

Table 2
Categorization of analyzed literature by focus region.

Country Studies

Industrialized USA Boyd [73], Cappers and Goldman [72], Chesbrough [97], Davidson and Steinberg [12], Funkhouser et al.
countries [32], Ghofrani et al. [79], Kempton and Tomić [77], Newcomb et al. [75], Overholm [82], Rai and Sigrin
[9]
Germany Arnold and Yildiz [94], Gobble [98], Heffels et al. [99], Karakaya et al. [100], Loisel et al. [101], Lüdeke-
Freund and Loock [102], Richter [6], Richter [2], Richter [61], Richter [10], Schleicher-Tappeser [14],
Yildiz [92], Yildiz et al. [103]
UK Broer and Titheridge [59], Cato et al. [104], Cruickshank and Kendall [105], Raman et al. [106], Wolfe [51]
Netherlands Gebrezgabher et al. [71], Mol et al. [60], Vasileiadou et al. [56]
Denmark Budde Christensen et al. [4]
Finland Hellström et al. [76], Hämäläinen et al. [84]
Japan Behrangrad [78], Dowaki and Mori [85]
Canada Machani et al. [68]
Taiwan Lih et al. [52]
Focus on industrialized countries in Alimisis and Hatziargyriou [47], Andersen et al. [3], Bae et al. [107], Bocken et al. [55], Cucchiella and
general D’Adamo [28], Kane and Ault [108], Khalfallah [109], Nair and Paulose [49], Rylatt et al. [110], Strupeit
and Palm [91], Weiller and Neely [54]

Developing countries India Balachandra et al. [11], Goel and Dwivedi [111], Harish et al. [13], Jolly et al. [8], Reddy et al. [58], Singh
[65]
Indonesia Jupesta et al. [48], Schmidt et al. [57]
Bangladesh Biswas et al. [33], Chowdhury et al. [89]
Brazil Zerriffi [66]
Cambodia Pode et al. [112]
China Guo and Chan [113]
Chile Ubilla et al. [114]
Ghana Mahama [53]
Tanzania Bryant and Romijn [87], Hultman et al. [36]
Taiwan Hsu and Lin [115]
Rwanda Wakkee et al. [90]
Uganda Buchholz et al. [40]
Zambia German et al. [35]
Focus on developing countries in Buitenhuis and Pearce [116], German et al. [34], Kolk and Buuse [64], Martinot [117], Martinot et al.
general [118], Martinot et al. [50], Parthan et al. [86]

General Aslani and Mohaghar [24], Cardenas et al. [30], Chang et al. [7], Dougherty et al. [88], Escobar and
Vredenburg [67], Juntunen and Hyysalo [38], Kolk [93], Loock [74], Richard [5], Rodríguez-Molina et al.
[83], Vatanparvar and Al Faruque [119]

researchers. Another reason was the ability to compare the find-
ings with data of the actual market shares and growth perspec-
tives to determine whether the research focus correlates with
actual market shares.
The left side of Fig. 4 shows the results obtained. A considerably
high number of studies focus on solar photovoltaic or biomass
(also biofuel and biogas). In 2011, the global renewable energy
supply was distributed differently than researchers’ interest in
corresponding business model examinations (see right side in
Fig. 4). For example, solar PV represents only 1.4% in the total
renewable energy supply, whereas 26 out of 89 selected papers
cover it in relation to business models. The strong political
attention, the incentive programs in numerous countries and its
vigorous growth rates likely explain researchers’ strong interest in
solar PV. Biomass, biofuels and biogas are also subjects of a sub-
stantial number of studies; the intention they receive reflects their
high share of renewable energy production, i.e., almost three-
fourths in global renewable energy production. Surprisingly few
studies focus on solar thermal, tide, wave, ocean, municipal waste,
geothermal or hydro energies even though theses renewable
energy sources may also play an important role in the future
energy mix.
However, there are several examples of renewable energy
projects in municipalities and communities that include diverse RE
technologies. Walker [37, p.4403] describes them as ‘community
renewable activities’, which are one part of renewable energy
generation. Examples of these ‘energy community systems’ are
district heating and district cooling, which can have varying
ownership structures, such as community ownership [38,39]. After
the categorization of the papers by renewable energy sources and
the previous distinction of the regional focus, the question lingers
regarding whether there are differences with respect to renewable
energy sources according to developing and industrialized coun-
tries. In fact, solar PV appears as often in the studies focusing on
developing countries as in papers focusing on industrialized
countries. This finding indicates the importance of solar PV for the
developing world. Due to its locally flexible application and the
significantly higher number of hours of sunshine, solar PV is
viewed as a promising option to cover a larger share of the total
energy supply. Surprisingly, none of the identified papers studies
business models for wind energy in developing world. An expla-
nation might be the complexity of projects to build up wind power
plants. In general, more papers study phenomena in the indus-
trialized world than in the developing countries, which is not
surprising; governments in industrialized countries are heavily
promoting renewable energies. Table A.1 gives an overview of the
studies’ focus on different renewable energy technologies.
4.1.5. Energy usage
The discussed business models not only depend on the sources
of renewable energy but also are highly dictated by their intended
usage. The three main categories of energy usage are electricity
(operating any electrical device or system), heat, and mobility. For
each category and for some combinations, business models are
 800
Table 3

M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809

Research methodologies categorized by focus region.

Methodology Industrialized countries Developing countries General

Empirical Qualitative: field Bae et al. [107], Funkhouser et al. [32], Overholm [82], Raman et al. Biswas et al. [33], Chowdhury et al. [89], German et al. [35],
study [106], Richter [2], Richter [61], Richter [10], Strupeit and Palm [91], German et al. [34], Goel and Dwivedi [111], Hsu and Lin [115],
Weiller and Neely [54] Jupesta [48], Martinot [117], Martinot et al. [118], Pode and Diouf
[112], Schmidt and Blum [57], Singh [65], Zerriffi [66]
Qualitative: case Broer and Titheridge [59], Budde Christensen et al. [4], Cappers and Bryant and Romijn [87], Buchholz et al. [40], Harish et al. [13], Chang et al. [7], Escobar and Vredenburg [67]
study Goldman [72], Cato et al. [104], Chesbrough [97], Hellström et al. Jolly et al. [8], Kolk and Buuse [64], Mahama [53], Parthan et al.
[76], Karakaya et al. [100], Mol et al. [60], Nair and Paulose [49] [86], Wakkee et al. [90], Yildiz [92]
Quantitative Davidson and Steinberg [12], Hämäläinen et al. [84], Lüdeke-Freund Reddy et al. [58] Loock [74]
and Loock [102], Rai and Sigrin [9], Vasileiadou et al. [56]

Other Mathematical model Arnold and Yildiz [94], Alimisis and Hatziargyriou [47], Cruickshank Vatanparvar and Al Faruque [119]
and Kendall [105], Dowaki and Mori [85], Ghofrani et al. [79], Hef-
fels et al. [99], Lih et al. [52], Loisel et al. [101], Machani et al. [68],
Rylatt et al. [110]
Literature review Behrangrad [78], Cucchiella and D’Adamo [28], Kane and Ault [108], Martinot et al. [50] Cardenas et al. [30], Juntunen and Hyysalo [38],
Richter [6], Schleicher-Tappeser [14], Wolfe [51], Yildiz et al. [103] Rodríguez-Molina et al. [83]
Conceptual/general Andersen et al. [3], Boyd [73], Cato et al. [104], Gobble [98], Balachandra et al. [11], Buitenhuis and Pearce [116], Guo and Chan Aslani and Mohaghar [24], Bocken et al. [55],
Kempton and Tomić [77], Khalfallah [109], Lih et al. [52], Nair and [113], Hultman et al. [36], Reddy et al. [58], Ubilla et al. [114] Chang et al. [7], Dougherty and Dunne [88], Kolk
Paulose [49], Newcomb et al. [75] [93], Richard [5]

Table 4
Selection of the most important theories and concepts applied, classified by focus region.
Used theories/concepts
Bottom/base of the
pyramid
Behavioral economics
Business model concept
Complexity theory
Decision theory
Diffusion theory
Disruptive innovation
Economies of scale
Ecosystem theory
Innovation theory
Institutional theory
Kondratiev cycles
Levelized cost of energy
Life cycle costing
Microfinance
Monte-Carlo simulation
Multi-level perspective
theory
Open innovation
Open source concept
Optimization theory
Organizational
Organizational learning
Porter's 5 forces/SWOT
analysis
Product life cycle
Responsible innovation
framework
Resource-based view
Social entrepreneurship
Supply chain management
theory
Transaction costs
Infrastructure Management
discussed. Andersen et al. [3], for instance, study business models
for recharging electric vehicles through the grid; therefore, their
paper is placed into the category of electricity and mobility. As
M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809 801
Industrialized countries Developing countries General
Jolly et al. [8], Jupesta et al. [48], Kolk and Bocken et al. [55]
Buuse [64], Mahama [53], Wakkee et al.
[90]
Lüdeke-Freund and Loock [102]
Behrangrad [78], Budde Christensen et al. [4], Hellström Buitenhuis and Pearce [116], Hultman et al. Aslani and Mohaghar [24],
et al. [76], Karakaya et al. [100], Mol et al. [60], Nair and [36], Jolly et al. [8], Kolk and Buuse [64], Bocken et al. [55], Chang et al.
Paulose [49], Richter [6], Richter [2], Richter [61], Richter Wakkee et al. [90] [7], Loock [74]
[10], Rodríguez-Molina et al. [83], Strupeit and Palm [91],
Vasileiadou et al. [56]
Rylatt et al. [110] Dougherty and Dunne [88]
Rai and Sigrin [9]
Boyd [73], Hämäläinen et al. [84], Karakaya et al. [100], Balachandra et al. [11]
Rai and Sigrin [9], Strupeit and Palm [91]
Richter [2], Richter [10] Mahama [53]
Davidson and Steinberg [12] Richard [5]
Overholm [82]
Hellström et al. [76], Nair and Paulose [49] Dougherty and Dunne [88], Kolk
[93]
Escobar and Vredenburg [67]
Nair and Paulose [49]
Schmidt et al. [57]
Reddy et al. [58]
Biswas et al. [33], Singh [65], Harish et al.
[13], Kolk and Buuse [64]
Arnold and Yildiz [94]
Vasileiadou et al. [56]
Chesbrough [97]
Buitenhuis and Pearce [116]
Alimisis and Hatziargyriou [47], Ghofrani et al. [79],
Heffels et al. [99], Rylatt et al. [110]
Richter [2], Richter [10]
Richter [2]
Jupesta et al. [48]
Karakaya et al. [100] Jupesta et al. [48]
Raman et al. [106]
Wakkee et al. [90] Aslani and Mohaghar [24], Esco-
bar and Vredenburg [67]
Raman et al. [106] Jolly et al. [8], Bryant and Romijn [87]
Cucchiella and D’Adamo [28]
Khalfallah [109] Yildiz [92], Yildiz et al. [103] Richard [5]
Business model
component
Value Proposion 82
Financials 77
55
Customer Interface 44
0 20 40 60 80 100
No. of papers
Fig. 3. Frequency of business model components in papers selected for this review.
another example, Buchholz et al. [40] analyze wood-based gasifi-
cation systems installed in Uganda, where residential heat is the
intended use of energy. Looking at the results, there is a strong
802 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809

45
39
40 Renewable
R
Liiquid
mun. waste
m

No. of papers
35 ofuels
bio
0.9% 3.6%
3
30 26 27
25
20
Hydrro Biofuels and Solid
15
9 17.6%
% wastte bioffuels /
10 9%
74.9 chaarcoal
5 2 2 1 688.9%
0 0
0

ogases
Bio
Wind 1.6%
1
2.2%
mal
SSolar, Geotherm
TTide 3.9%
1
1.4%
Type of renewable energy

Fig. 4. Source of renewable energy (left: reviewed papers’ focus on renewable energy sources /right: 2011 shares of renewable sources in world renewable energy supply
[15]).

Energy usage
Electricity (only)
Heat (only) 6 support measures to mitigate climate change [7,8,28,48, 50–52].
Mobility (only) 10
Electricity & Heat
Electricity & Mobility 8
Heat & Mobility
1
Electricity, Heat & Mobility 8
0 10
Fig. 5. No. of papers analyzing energy usage.
interest in electricity (42 studies). The combination of electricity
with heat or mobility is also eye-catching. Business models for
heat appear less often; however, there is a literature stream that
analyzes heat business models and increasingly considers renew-
able energy technologies in the context of district heating
[23,38,41,42] (see Fig. 5).
4.2. Synthesis of drivers, business opportunities and barriers
Notably, a majority of studies in the field of business models for
renewable energies show a common interest in business oppor-
tunities and in the drivers of and barriers for business models for
renewable energies. In the business model literature, researchers
discuss and link these as influencing factors [43], and scholars
analyzing organizational changes underline their importance
[44–46]. Therefore, the authors present the aggregation of what
scholars see as central drivers, opportunities and barriers in
Table 5, elaborating on them in the following sections. Each of
these categories is further structured by focus region (global,
industrialized countries and developing countries).
4.2.1. Drivers for renewable energy business models
The scientific community's interest in the driving forces behind
new business models for renewable energies shows the impor-
tance of understanding these drivers. Thus, the authors synthe-
sized drivers from the reviewed literature and structured them
into driving forces with global effects, drivers important to
industrialized countries, and drivers important to developing
countries.
4.2.1.1. Global drivers. The exacerbating scarcity of oil leads to
increasing prices for fossil fuels [8,47–49] and nourishes world-
wide energy security concerns and political intentions to lower
countries’ dependency on oil [7,8,28,48,50–52]. The threat of
devastating effects from climate change is globally recognized and
42 drives political agendas to implement CO2 reduction goals and to
The best-known international agreement in this context is the
14
Kyoto protocol, which influenced political and regulatory frame-
works in numerous countries and in the markets for renewable
energies worldwide [28,48,53]. These regularly adjusted energy
policies are a key driver for business model adaption and inno-
20 30 40 50
No. of papers vation [38,54]. Related to the major driver climate change, scholars
underline the aspect of sustainability as a driver for customers’
demand for those products or services and changing business
models [32,55,56].
New business models are facilitated due to the liberalization of
the energy sector, the unbundling of energy systems’ functions
(e.g., generation, transmission, distribution), and the change from
large state-owned utilities to an increasing involvement of private
actors, which is taking place in all countries worldwide
[14,50,53,57].
Technology-wise, the development with the largest effect
might be the steep learning curves regarding photovoltaic tech-
nologies, which stem from the rising mass production. These
enable operation times over many years without maintenance and
scalability from small end-use applications to large power plants
[14].
Air pollution and health problems caused by conventional
energy sources are also mentioned as driving forces [50,52,58].
4.2.1.2. Drivers in industrialized countries. In industrialized coun-
tries, strong political backing for renewable energies reflects
society’s desire for a sustainable energy system. This leads to
ambitious targets for emission reduction, the expansion of
renewables, and direct and indirect political support (e.g., through
research funding or tax incentives) [3,12,59–61].
In addition, the economic properties of renewable energy
applications facilitate new business models: Once renewable
power plants are built, marginal costs of energy from renewable
sources are close to zero (e.g., in the case of wind or solar power),
and even the levelized cost of energy3 decreases with technolo-
gical progress in the direction of grid parity4 (e.g., in Germany,
3
Levelized cost of energy (LCOE) is the sum of all costs over the lifetime of a
power plant divided by the lifetime of the plant, which gives a value to compare
different forms of power generation (e.g., in Euro per kWh) [62].
4
Grid parity is the point in time, when electricity from a renewable power
plant reaches the same LCOE as the price for electricity from the grid (e.g., in Euro
per kWh) [63].
 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
Table 5
Overview of synthesized drivers, opportunities and barriers.
Industrialized countries
Drivers  Ambitious emission reduction targets  Basic needs unfulfilled
 Direct and indirect political support  Need for universal electricity access
 Low marginal costs of energy from renew-  Intention to close urban-rural-divide
able energies  Rising demand for energy
 Grid parity of renewables  Paradigm change from donor to market
Opportunities  Adaptation of utilities' business models
 Cooperative business models
 Combination of mobility and electricity
 Solutions for load management and storage
 Consumer involvement: prosumers & partial
energy autarky
 Enabling and supporting distributed
generation
 Integration of renewable energies into
industrial processes
Barriers  Renewables face fierce competition to
existing technologies
 Cognitive barriers
 High costs of batteries
 High upfront investments
small PV plants have been able to compete with retail prices since
2012) [14].
4.2.1.3. Drivers in developing countries. Several factors driving new
business models for renewables are highly specific for developing
countries.
One very important point is that often basic needs are still
unfulfilled and energy is one of the requirements to meet these
needs [50,64]. Business models for renewable energies in devel-
oping countries frequently target these needs with their value
propositions. For example, they aim at satisfying lighting needs to
improve evening study conditions [58,64–66], improving refrig-
eration possibilities for preserving blood storage, vaccines, and
medicine [64], purifying water [64], and sustainably providing the
energy needed for cooking [53,58].
Closely connected to the first driver is the need for universal
electricity access and the goal to close the urban–rural divide in
many developing countries. This goal, which is viewed as crucial to
achieving all rural development goals, is highly ambitious because
many villages still are either completely cut off from the grid or
experience blackouts lasting for hours nearly every day
[14,40,53,58,64,66].
In addition to the difficulties in meeting the current energy
demand, social and economic development leads to a rapidly ris-
ing demand for energy, particularly in developing countries [24].
Another driver is the changing economic perspective, which is
transforming from a donor to a market orientation. In recent years,
energy initiatives have been increasingly carried out by private
enterprises instead of donor-driven and donation-based projects,
which predominated in the past [50,64].
A crucial phenomenon is the diesel parity of renewables: photo-
voltaics and biomass are able to substitute diesel generators (which
are heavily used in rural areas). In contrast, grid parity is more
important to industrialized countries [13,14,40].
Other mentioned drivers are technological change and the
transfer of technical know-how from firms in the industrialized
world to developing countries [13,50].
803
Developing countries General
 Scarcity of oil
 Intentions to lower dependency on oil
 Threat of effects from climate change
 Sustainable lifestyle
 Energy policy- Liberalization of the energy sector
orientation  Steep learning curves regarding PV techn.
 Diesel parity of renewables  Air pollution and health problems
 Technological change and transfer of techni-
cal know-how
 Offerings addressing the bottom of the  Sustainable development
pyramid  Connecting businesses from industrialized and
 Social entrepreneurship developing countries
 Microfinance  Smart utilization of ressources and waste
 Replicable business models
 Low security of supply  Lack of long-term planning security
 Corruption  Incentives not designed to meet locally varying
 Shortcomings in legal frameworks requirements
 Lack of management skills  Long and uncertain development cycles
 Lack of entrepreneurship support  Lack of skilled people
 Lack of knowledge and information
 Interests of incumbents to maintain the status quo
 Low energy density of renewables
4.2.2. Business opportunities for renewable energy business models
4.2.2.1. Global opportunities. When grasping global and regional
drivers of business models for renewable energy, one can start to
envision the immense opportunities that arise. Sustainable devel-
opment is viewed as an opportunity for innovation, and the evolu-
tion of business models for renewable energies might even lead to a
stronger ‘business-society relationship’ [67]. Some of the evolving
business models are connecting the industrialized world with the
developing world through addressing mutual opportunities [40,49].
Researchers describe large opportunities for biogas and biofuel by
exploring various cases such as an integrated forest biorefinery [68].
Richard [5] elaborates on business models supporting the biomass
value chain. Rising biomass production and refinement require
additional long-distance transportation, resulting in growth in the
logistics sector. Connections via rail, ship or even pipeline for liquid
transportation has become increasingly attractive [5]. The second
major opportunity is the more intelligent and creative use of
resources, including waste [7,60]. Improving production processes by
segregating reusable components or treating waste water are cor-
responding examples. However, most of the opportunities noted by
researchers are more strongly connected to either the industrialized
world or to developing countries, as outlined below.
4.2.2.2. Opportunities in industrialized countries. In most indus-
trialized countries, there is a broad social consensus in favor of the
transformation of the energy system: The countries have created
regulatory frameworks with corresponding subsidies that support
the transformation toward renewable energies [69]. Researchers
attribute some countries with a particularly outstanding regulatory
environment for establishing new business models. For example,
Budde Christensen et al. [4] and Giordano and Fulli [70] note that
Denmark has an atmosphere that is particularly conducive to inno-
vative business models in the field of sustainable mobility. This leads
to a growing market for renewables and implicates new roles and
challenges for the energy system of the future. Consequently, there
are tremendous opportunities for shaping existing business models
and designing entirely new ones [2,71,72]. Enterprises should not
804 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
only think of new models that offer the cheapest price but rather
design models for offering the best service. Research has asserted
that customers and investors are looking for convincing services, not
only in the area of digital or lifestyle products but also in the energy
sector, which substantially increases the demand for innovative ser-
vices and thus innovative business models [2,55,73,74]. Although this
demand is an opportunity, it presents a crucial exigency to traditional
market players, particularly utility companies, to change their busi-
ness model. Therefore, Richter [6] presents two generic business
models for utilities: one utility-side business model and one
customer-side business model. The latter might turn the threat of
shrinking revenues attributed to increasing decentralized energy
generation into an opportunity for utilities and for the entire industry
[6]. Accordingly, entering the market for decentralized electricity
would allow utility companies to profit from the heavily growing use
of distributed PV [10]. Decentralized electricity or heat generation
can be considered one of the most promising opportunities for the
energy industry. For example, scholars consider district energy sys-
tems (heating or cooling) to be an increasingly attractive RE tech-
nologies, even though uncertainty of energy demand remains a huge
challenge [38,39,44,95]. The rising amount of distributed renewable
energy production drives the need for integration platforms that
could be provided by utilities and also provide business opportunities
for new players such as prosumers [75]. Additionally, utilities could
create value by offering financing solutions through contracting and
on-bill repayment [75].
For industrialized countries, opportunities for cooperative
business models are mentioned frequently, and closed-loop sys-
tems have become increasingly more important for the value
chain of renewable energies [28,76]. Cooperative business models
in the context of leasing or contracting offer new markets for
companies and revenue opportunities for households [9,14]. For
example, a private household would financially benefit from
offering their rooftop for PV installations by receiving a share of
the revenue. Leasing or contracting is also an attractive coopera-
tive approach for companies that either cannot afford immense
investments or do not have renewable energies as their core
business. Another option is the joint venture model that allows
small and medium-sized companies to share risks and investment
with each other [61].
There are also many business model opportunities combining
mobility and electricity. Because electric cars will consume large
amounts of renewably generated electricity in the future, they
bring the opportunity to serve as short-term storage to stabilize
the grid. This vehicle-to-grid concept is perceived to be one
important building block within the energy system of the future. It
combines the strength of electric vehicles and the power grid. The
variable generation of large wind power plants and PV plants can
be stabilized to contribute to the base load or even provide peak
load when demanded. However, it is unclear which player will
take over this market role of load management for vehicles
[4,75,77]. Additionally, old batteries that can no longer serve their
primary function in an electric vehicle can be incorporated into
new business models and be used a second time as stationary
batteries for electricity regulation [52].
Load management and storage are other opportunities
repeatedly mentioned in the renewable energy sector. These
opportunities can be, for example, in the form of thermal or
pressurized storage systems and electrical storage charging in
cases of excessive intermittent electricity generation [14,51,75,78].
Furthermore, business models combining wind power and storage
systems for the efficient integration of wind energy are investi-
gated, which can optimize transmission line capacities and avoid
expansive transmission grid expansions [79]. Smart grid solutions
that facilitate increased flexibility using demand response offer
another wide range of business opportunities [75]. Storage
systems and smart grid solutions are two examples where coop-
erative business models are strategic; because benefits from such
solutions are distributed among various players, they may be
profitable only when offered jointly by cooperating partners [80].
In conjunction with energy storage, business opportunities
arise from the trend toward active consumer involvement, such as
prosumers, energy self-consumption or even partial energy
autarky [81–83]. For instance, Rodríguez-Molina et al. [83] show
how smart grid data management, prosumer interaction man-
agement or improved energy efficiency offer business model
opportunities in this field.
Another field that offers huge opportunities is applying energy
efficiency measures in the private housing or industry sectors
[59,72,82].
By more sustainably using energy and resources, new
industrial-side business models arise. Industries of industrialized
countries are already advanced in trying to combine economically
viable business opportunities. Examples are the integration of bio
refineries into the processes of the pulp and paper industry, the
treatment of waste water to produce heat, or the establishment of
a system to use energy from biomass in a sawmill [60,84,85].
4.2.2.3. Opportunities in developing countries. Researchers empha-
size a number of opportunities for business models for renewable
energies in developing countries. Although the renewable energy
development is much more present in the industrialized world,
several developing countries, such as India, have given at least
some governmental support [11].
One common opportunity for developing countries is the
approach of business models targeting the bottom of the pyramid,
whereby products and services are specially designed for custo-
mers at the lower end of the economic pyramid [53,55]. Parthan
et al. [86] state that against alleged perception, there are profitable
business models for the bottom of the pyramid. For instance, many
social entrepreneurship business models address the same cus-
tomers and have been shown to work well [8,87].
Microfinance offers various opportunities and is an enabler for
the energy sector. Private enterprises highlight microfinance to be
paramount in the effort to expand their business models and to
address new customers [11,50,65]. Additionally, microfinance
banks can use their local market knowledge to be a sales channel
of business models for renewable energy [13].
The opportunities for new and replicable business models are
mentioned frequently. The underlying goal is to test a rather
simple business model for renewable energies on a small scale and
then to replicate it several times [50]. Examples include solar
home systems that use new lightning technologies such as light-
emitting diodes (LEDs), solar battery charging stations, and local
micro-grids [13,65,66]. Buchholz et al. [40] give an example of a
highly profitable combined electricity and heat model, and Ger-
man et al. [35] see strong opportunities for securing rural liveli-
hoods in countries such as Zambia from biofuel production.
4.2.3. Barriers for renewable energy business models
4.2.3.1. General barriers to business models for renewable energies.
Although multifaceted forces drive many new opportunities, busi-
ness models for renewable energies also face a number of barriers.
Although the current regulatory framework includes various
laws to support renewables in general, there is often a lack of long-
term planning reliability due to changing approaches and frame-
work conditions. This does not allow for building and operating
complex logistics networks that involve many companies, which is
necessary for the system to function effectively [6,24,57,59,64,84].
In addition, incentives do not fit locally varying requirements of
distribution grids, which depend on the local mix of power gen-
eration [14]. Sometimes, whole countries just emulate laws from
 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
others without proper adaption to local specific features of energy
systems [53].
Within this combination of misplaced incentives and a lack of
planning reliability, the long and uncertain development cycles
compared to other industries can result in budgetary problems
and thus limit firms’ growth [24,88].
Another barrier is the lack of skilled people and the lack of
available information and knowledge about markets for renew-
ables and potential customers [24,48,57,64,89,90].
Furthermore, in many countries, incumbents have an interest
in maintaining the status quo: They slow down developments
toward more decentralized energy systems because they might
lose control with power shifting to new actors and their innovative
business models [14,49,53].
Finally, the low energy density of renewables compared to that of
fossil fuels is a limitation for some applications and poses challenges
to new business models (e.g., the storage of excess electricity or the
logistical distribution of high volumes of biomass) [5,24,48].
4.2.3.2. Barriers in industrialized countries. In industrialized coun-
tries, there is a strong and reliable energy infrastructure in place.
Although this allows for a certain share of intermittent renewables
without immediate quality problems, renewable energy technol-
ogies strongly compete with existing technologies and have to
show more performance and cost effectiveness [2]. This competi-
tion will even become tougher as the share of renewable energy
creates significant supply fluctuations.
Richter [2] argues that utilities in industrialized countries have
difficulties with business model innovation not only because conflicts
may occur with existing business models but also because of the
cognitive barriers of responsible individuals: They are risk averse and
thus may not recognize business opportunities from changing fra-
mework conditions. Thus, utilities traditionally do not seem to be
first movers with much internal resistance to innovation [2].
High costs of batteries present one additional barrier specific to
electric mobility as an application using renewable energies [52].
Furthermore, these costs are not distributed across different actors
such as grid operators or aggregators [54]. Although technological
progress promises decreasing costs and innovative business
models for electric mobility are emerging, high costs still pose a
tremendous challenge. Additionally, high upfront investments
build a significant barrier for numerous business models
[56,76,90–92].
4.2.3.3. Barriers in developing countries. The sometimes low
security of energy supply in developing countries leads to
numerous blackouts and poor power quality. It is therefore diffi-
cult to implement new business models for intermittent renew-
able energy sources into such fragile infrastructures [13,40,57].
However, this low security also offers entrepreneurial opportu-
nities for the development of new systems, such as renewable
energy-based island solutions.
In addition to the existing technical challenges, innovative, sus-
tainable, and fair business models for renewables fail in some cases
due to corruption and shortcomings in legal frameworks [40].
In developing countries, many very small firms in the renew-
ables branch are still managed by entrepreneurs of the first gen-
eration [13,86]. It proves difficult for most businesses to grow into
medium-sized or large companies. Therefore, positive effects from
economies of scale cannot be realized [53]. This is because there is
a lack of entrepreneurs and managers with the necessary skills,
which are often attributed to a good educational system
[86,89,93]. The absence of management with a solid business
education also leads to difficulties in acquiring affordable loans.
Thus, under-capitalized companies fail to set up efficient sales
infrastructures and to expand [11,13,57,64].
805
5. Summary of findings and future research agenda
This section presents a summary of findings and provides a future
research agenda. The authors identified the distinction of studies that
focus on industrialized countries and those that focus on developing
countries as the main unit of analysis for structuring the reviewed
literature of the until now fragmented research landscape. Seven
further units of analysis from the energy focus, methodology focus
and business model focus were chosen for structuring existing
research (see Table 6). Each of the resulting 14 aspects was evaluated,
and the authors indicate where current research has focused on. This
approach allows readers to quickly grasp the focus of the current
research to find links to connect their own research and promising
areas for future studies.
The renewable energy sources for which business models in
regions worldwide are primarily studied are solar PV and biofuel.
Research on wind energy and community energy systems based on
biofuel or geothermal focuses on industrialized countries. This focus
is possibly due to the higher complexity of wind power projects or
the infrastructure necessary for district heating or cooling systems.
All other renewable energy sources have not yet been heavily studied
with respect to business models. Although there is some research
that considers geothermal or biomass as a source for district heating
[42,94] and other research that studies the combination of heat and
mobility in industrialized countries, these areas offer huge potential
for future research. Business models for decentralized energy gen-
eration are challenged by the huge uncertainty of demand [95]. The
relatively small amount of research on business models for these
technologies can be contrasted with a huge total energy demand for
heat and transportation [96].
The authors identified a lack of statistical economic data on
renewables in developing countries. Thus, existing studies that focus
on developing countries are primarily conceptual or use qualitative
methods. Hence, researchers should develop innovative ideas to
gather data in countries with weak governmental statistical offices.
Furthermore, future research can close a gap by transferring
approaches of mathematical modeling from studies that focus on the
industrialized part of the world because these studies already show a
high utilization of mathematical models. In studies that focus on
industrialized countries, the authors also found first quantitative
empirical analyses. However, it became apparent that these studies
examine highly specific aspects, and it is still a relatively young field
of research offering a multitude of unanswered questions.
Scholars apply the business model concept widely but incon-
sistently concerning its four pillars product, infrastructure manage-
ment, customer interface and financials. The concept should be used
more holistically, which would allow a better comparison of research
results and lead to an acceleration of research in this new field.
Furthermore, scholars heavily discuss drivers, barriers and opportu-
nities from the specific perspectives of their respective analyses.
Future research with a focus on developing countries should study
opportunities from cooperative business models and factors that
facilitate successful replications of viable business models. The
opportunities, drivers and barriers for business models for renewable
energies are of high interest for policy makers; therefore, the present
paper comprehensively overviews them, as presented in Section 4.2.
This overview can serve as a starting point for future studies, which
could classify and assess drivers and barriers in terms of uncertainty
and effects. In a following step, this approach should result in an
analysis of framework conditions for business models to identify and
validate business model-friendly laws and supporting policies.
6. Conclusion and implications
By structuring and analyzing the identified literature, the goal of
this review was twofold: first, establishing a firm research foundation
 806
Table 6
Framework for business models for renewable energies

M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809

Business models for renewable energies in industrialized countries Business models for renewable energies in developing countries

Focus of existing research / many links to connect Out of focus of existing research / new Focus of existing research / many links to Out of focus of existing research / new
future research: approaches required: connect future research: approaches required:

Energy focus Type of renewable - Solar PV - Solar thermal - Solar PV - Solar thermal
energy - Wind - Tide, wave, ocean - Biofuel - Wind
- Biofuel - Municipal waste - Tide, wave, ocean
- Geothermal - Municipal waste
- Hydro - Geothermal
- Hydro
Energy usage - Electricity - Mobility - Electricity - Mobility
- Electricity & Heat - Heat - Heat
- Electricity & Mobility - Combined purposes of energy
Methodology focus Empirical - Qualitative studies - Qualitative field studies - Quantitative studies
- First quantitative studies on specific aspects - Case studies
Non-empirical - Emphasis on mathematical models - Conceptual papers - Mathematical modeling
- Literature reviews
Business model Business model theory Description of the following parts of business Often not or very shortly described: Description of the following parts of business Often not or very shortly described:
focus models: models:
- Value Propositon - Infrastructure Management - Value Propositon - Infrastructure Management
- Financials - Customer Interface Often proper the- - Financials - Customer Interface Often proper the-
oretical base missing oretical base missing
Business model - Cooperative business models - Bottom of the pyramid - Cooperative business models
opportunities - Microfinance - Replication of basic business models
Drivers and barriers for Several drivers and barriers mentioned - Assessment and classification of Several drivers and barriers mentioned - Assessment and classification of
business models (aggregated collection see in Section 4.2) drivers and barriers (aggregated collection see in Section 4.2) drivers and barriers
- Identification of implications for - Identification of implications for
policy-makers and economic actors policy-makers and economic actors
 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
that supports the identification of white spots as avenues for future
research on business models for renewable energies; and second,
presenting consolidated policy recommendations to foster the diffu-
sion of profitable renewable energy businesses. These goals were
accomplished by developing a conceptual framework of research at
the intersection of business models and renewable energies. The dis-
tinction between developing countries and industrialized countries
revealed three key findings of this review:
The first key outcome is that the business model concept is
widely used in the area of renewable energies, but often, it is not
properly defined and is not based on theoretical literature. Scholars
examine business opportunities, drivers and barriers for these
business models. Thus, although the concept is shown to be a sui-
table framework to analyze business aspects and the potential
economic development of renewable energies, scholars should
more strongly rely on existing literature (see Section 2). Doing so
would make it possible to achieve a more comprehensive pre-
sentation of analyzed business models, for example by not omitting
the customer interface, which is often the case. Additionally, it
would allow for refining the theoretical concept of business models
itself. Business model opportunities for renewable energies in
industrialized countries are primarily based on cooperation,
whereas in developing countries, promising concepts are the prin-
ciples of bottom of the pyramid and microfinance. Future research
with a focus on developing countries should also study opportu-
nities from cooperative business models and factors that facilitate
successful replications of viable business models. The opportunities,
drivers and barriers for business models for renewable energies are
of high interest for policy makers (see Section 4.2).
The second key outcome of this review is that researchers
apply a wide range of theories, concepts and methods from busi-
ness research that differ depending on the analyzed region. Stu-
dies focusing on industrialized countries use optimization theory,
organizational learning, or Chesbrough’s open innovation
approaches, which are not considered in research focusing on
developing countries. Vice versa, the concepts of bottom of the
Table A.1
Overview of papers by focus on different renewable energy source and focus region.
Industrialized countries
Solar: PV Davidson and Steinberg [12], Funkhouser et al. [32],
Gebrezgabher et al. [71], Karakaya et al. [100],
Kempton and Tomić [77], Lüdeke-Freund and Loock
[102], Newcomb et al. [75], Overholm [82], Rai and
Sigrin [9], Richter [61], Richter [10], Schleicher-Tap-
peser [14], Strupeit and Palm [91]
Solar: thermal Wolfe [51]
Wind Alimisis and Hatziargyriou [47], Cappers and Gold-
man [72], Cato et al. [104], Gebrezgabher et al. [71],
Ghofrani et al. [79], Kempton and Tomić [77], Richter
[61], Richter [10]
Tide, wave,
ocean
Biofuel, biogas, Arnold and Yildiz [94], Cappers and Goldman [72],
biomass Cato et al. [104], Dowaki and Mori [85], Geb-
rezgabher et al. [71], Heffels et al. [99], Hämäläinen
et al. [84], Machani et al. [68], Hellström et al. [76],
Nair and Paulose [49], Raman et al. [106], Richter
[61], Wolfe [51]
Municipal waste Mol et al. [60]
Geothermal
Hydro Cato et al. [104]
Renewables in Andersen et al. [3], Bae et al. [107], Behrangrad [78],
general Broer and Titheridge [59], Budde Christensen et al.
[4], Boyd [73], Chesbrough [97], Cruickshank and
Kendall [105], Cucchiella and D’Adamo [28], Gobble
[98], Kane and Ault [108], Khalfallah [109], Lih et al.
[52], Newcomb et al. [75], Loisel et al. [101], Richter
[2], Richter [6], Rylatt et al. [110], Vasileiadou et al.
[56], Weiller and Neely [54], Yildiz et al. [103]
807
pyramid, microfinance, or social entrepreneurship are applied only
in studies focusing on developing countries. Furthermore,
empirical studies focusing on industrialized countries are far more
often based on quantitative data than studies that focus on
developing countries. This reveals a lack of statistical data in
developing countries, which should be addressed by researchers
using innovative data collection methods, e.g., by leveraging the
wide diffusion of mobile phones.
The third key outcome is that by classifying the literature and
presented drivers, barriers and business opportunities according to
focus regions, the authors can present the following policy recom-
mendations on a global level without neglecting regional particula-
rities that show revealing insights for politics; policy-makers should
build clear and reliable legal framework conditions to create stable
planning reliability that encourages new ventures. As for the lack of a
skilled workforce, policy-makers should support additional educa-
tion programs on renewable energies. Particularly in industrialized
countries, support for on-the-job trainings could lower cognitive
barriers and decrease the reluctance of incumbents to risk new
business ventures. The current trends toward energy self-supply,
district heating with renewables and community ownership offer
highly appealing research and business opportunities in indus-
trialized countries. In developing countries, political support should
focus on thorough management education and entrepreneurship
support. Policy-makers in developing countries should fight corrup-
tion, which was identified as a main barrier. Lastly, developing
countries should base a supportive legal framework on proven and
tested laws in industrialized countries but ensure they are properly
adapted to the differing specific situations and regions.
Appendix
See Table A.1 for an overview of papers categorized by focus on
renewable energy source and focus region.
Developing countries General
Biswas et al. [33], Buitenhuis and Pearce [116], Dougherty and Dunne [88]
Goel and Dwivedi [111], Chowdhury et al.
[89], Harish et al. [13], Jolly et al. [8], Mahama
[53], Martinot [117], Martinot et al. [118],
Singh [65], Zerriffi [66]
Bryant and Romijn [87], Buchholz et al. [40], Dougherty and Dunne [88], Richard [5]
German et al. [35], German et al. [34], Hsu and
Lin [115], Hultman et al. [36], Jupesta et al.
[48], Pode et al. [112], Reddy et al. [58],
Wakkee et al. [90]
Chang and Hsu [7]
Balachandra et al. [11], Guo and Chan [113], Aslani and Mohaghar [24], Bocken et al. [55],
Kolk and Buuse [64], Martinot et al. [50], Cardenas et al. [30], Dougherty and Dunne
Parthan et al. [86], Schmidt et al. [57], Ubilla [88], Escobar and Vredenburg [67], Juntunen
et al. [114], Yildiz [92] and Hyysalo [38], Kolk [93], Rodríguez-Molina
et al. [83], Loock [74], Vatanparvar and Al
Faruque [119]
808 M. Engelken et al. / Renewable and Sustainable Energy Reviews 60 (2016) 795–809
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