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MPhil in Engineering for Sustainable Development

global challenges, engineering solutions

Studying at Cambridge

Fotis Fotiadis

Exploring Business Models in Distributed Power Generation: A Customer Based Research.
In the wake of the universally embraced push towards more sustainable energy, prices of distributed energy technologies such as solar PV have been falling sharply over the last few years, while battery technologies have been improving dramatically. On the other hand grid electricity prices have been relentlessly rising and, coupled with the energy market volatility, have led to growing concern over the future of the electricity utility model as we know it. Speculation that distributed power generation could soon be taking over the electricity utility market has been gaining traction exponentially. As a result, the majority of the energy industry and particularly executives of many electric utility companies are increasingly edgy that the traditional utility business model is about to change forever, fearing that it is under serious threat from the increasing economic viability of innovative distributed energy technologies such as the ‘solar-plus-battery’ system.  A common mistake made in the past has been the arbitrary assumption that once a technology is ready, people will rush to adopt it. For the typical electricity consumer though, adoption of a power generating and storage facility in their household would only complicate things, thus going against the rather accepted notion that human beings favour simplicity over complexity. Therefore research was conducted focused on addressing the missing part of the equation, which is the customer’s perspective and attitude towards this revolutionary system that could signal the doom of the mainstream electricity utility model.  In order to achieve a comprehensive understanding of the customer’s perspective, a thoroughly developed survey was conducted in collaboration with YouGov, attempting to reach the public on a national level. The survey concentrated on three key research questions; What is the likeliness of individuals going off-grid in the future? What are the factors affecting such decision? What is the public’s willingness to pay for adopting an off-grid solar system?  Subsequently, the survey results were analysed in order to explore the customers’ behaviour, thoughts and patterns in the context of off-grid living. Moreover, the survey was structured and conducted in a way that would yield results useful for the development of a business strategy that could give robust answers to the challenges potentially leading the traditional utility business model to oblivion. Results showed that the large majority of the individuals sampled currently find it unlikely to move off-grid in the future. Most observations lead to the conclusion that mere grid parity is not by itself a sufficient condition for a large number of consumers to consider leaving the grid. Additionally it was strongly manifested throughout the research that already existing work had failed to holistically address the drivers and behavioural patterns of individuals in the context of grid defection.