Solar Firms in Flux: Evolving Solar Energy Business Models and Regional Economic Implications

Authors: Maximilian Eisenburger*, University of Illinois (Dept Urban & Regional Planning)
Topics: Economic Geography, Energy
Keywords: solar, firms, renewable energy
Session Type: Virtual Paper
Day: 4/7/2021
Start / End Time: 3:05 PM / 4:20 PM
Room: Virtual 30
Presentation File: No File Uploaded

Economic benefits provide a key rationale for renewable energy policy adoption in the U.S., from progressive national visions of a “Green New Deal” to urban entrepreneurial schemes seeking new sources of capital. However, the renewable energy (RE) sector’s rapid growth over the last decade has been accompanied by the failure of several high-profile RE firms amidst shifting policies and market dynamics. The uneven performance of the RE sector despite a growing market raises questions about the sources of this unevenness, and its potential consequences for the geographic and social distribution of its economic benefits.

Through a comparative case study of two leading national residential solar energy firms and local solar businesses in two regions, this paper shows how differences in internal capabilities and financial imperatives motivate large firms to adopt distinct strategies in response to similar policy and market risks: while one firm’s complex and capital-hungry product portfolio leads it to emphasize cost reductions, labor-replacing technological innovation, and intrafirm coordination, the other is outsourcing lower-profit activities to local partners and contractors while focusing on emerging, higher-margin energy services. These strategies suggest divergent outcomes for local solar firms and workers, with the former providing greater benefits for knowledge workers and heightening competition with smaller local solar firms, while the latter broadens opportunities for small firms and less skilled workers. These results also demonstrate that prevailing firm-oriented theories of economic geography (such as GPN) can be enriched by considering the competing imperatives that may exist across a company’s product portfolio.

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