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Bridges to New Solar Business Models

Bridges to New Solar Business Models

Creating a sustainable long-term distributed photovoltaic (DPV) market will require aligning the interests of utilities, solar companies, technology providers, and customers. Aligning those interests does not mean discarding the business models that have served the solar market until now. Rather, it means enhancing legacy solar business models by creating an expanded value pool—one that makes DPV affordable and accessible to far more customers, bridges beyond individual customer-centric DPV value to include value delivered to the grid and society, and allows the electricity grid’s myriad stakeholders to share in that value.

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Aligning the interests of these stakeholders will involve two major threads:

  • Maximize the delivered value of DPV to customers and the electricity system by further decreasing costs and increasing benefits (see Figure ES1), and
  • Create new business models that enable and incent solar companies, utilities, and customers to optimize and capture that expanded pool of DPV value through win-win-win opportunities.

While addressing some of these issues will require both pricing realignment and regulatory model reform, reform will take significant time and resources to unfold. Meanwhile, utilities, solar companies, and regulators can design and implement components of solar business model strategies today that provide a bridge to the future. These “bridge” business model strategies—including three complementary “building blocks” and discrete next steps—can start to create and capture value, while also providing best practices and lessons learned to inform broader reform efforts.

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