In the same category of crystal bowl forecasts, it would have seemed impossible to send text messages for free with your mobile phone. Yet, today WhatsApp is conquering the world and forcing existing telecom service providers to come up with new business models. Payment per kilobyte of data just does not cut it any longer. And what about the high-tech cell phones these companies provided for free with 2-year membership? How do they make money?
The most surprising element of these inventions is not the exciting technology but the business model. How in the world is it possible to make money providing free services? What is the business model behind these successes?
The interesting parallel is that the PV industry needs new business models such as these, too. We need to get rid of unpredictable government incentive schemes. Indeed, most people would not be opposed to reducing their dependence on and bills for their energy utility.
Will it be possible to offer solar energy for free in five years’ time? No payment per kwh, but only a flat monthly fee just for the PV system (connection)? Or sharing the solar energy from your roof with your friends and neighbors for free?
Who would pay for the PV system investment (by the way another 30% less than today)? No idea yet, but that does not mean it is not possible! The guys who invented Twitter and WhatsApp did not know upfront either, yet their companies are worth a great deal of money...
Rather than working solely on technology improvements, the solar industry would do well to work on innovations for business models.
The industry needs to get rid of dependence on the yearly-changing government feed-in tariffs, tax advantages and subsidies. Let’s put our energy into universal business models that could work in any country; that have the potential for a niche in the rapidly and continuously growing global PV market. That is what the industry needs most now: to stop the current whirlpool of cost reductions and margin compressions forced by decreasing incentives, which lead to uncertain market demand and hence oversupply and the need for more cost reductions.
The most successful internet companies where not related to better transistors or other “wiz kid” technology innovations. The major success stories such as Google, Facebook, Twitter, etc. all emanated from superb business models based around free services.
