Competitive Solar Business Models for the GCC
Aaron Morrow
4/14/14
The Solar Business Model
If it ain’t Broke?...
Declining Module
Prices
136 GW
through 2013
Imminent Grid Parity
Global Solar Business Models
What is the Business Model?
Value
Proposition
Value Creation
Key
Partnerships
• Finance
Institutions
• Developers
• EPC
Key Activities
• Financing
• Project Dev.
• EPC
• Construction
Management
Societal
• Environmental
• Job Creation
• Future Benefit
Regulations
and
Incentives
Key Resources
• Capital
Market
• Competitive rates
• Attractive returns
• Stable returns
• Ancillary services
Value Potential
Customer
Relationships
• Project Sales
• SPSA/PPA/Lease
Sales
Channels
• Project Dev.
• Project
purchase
• Retail Sales
• RFPs/Tenders
Customer
Segments
GCC Solar Business Model
What’s Different?
Value
Proposition
Value Creation
Key
Partnerships
Key Activities
Key Resources
Capital
Societal
• Resource
preservation
• Energy security
• Capacity
development
• Environmental
Regulations
and
Incentives
Market
• Opportunity cost
of fuel
• Ancillary services
Value Potential
Customer
Relationships
Sales
Channels
Customer
Segments
GCC Solar Business Model
The GCC Value Proposition
Societal
• Resource
Preservation
• Energy Security
• Capacity
Development
• Environmental
Market
• Opportunity cost
of fuel
• Ancillary
Services
• Energy infrastructure heavily dependent of depletable
resources
• High unemployment
• Concern of history of PV development
• Concerns about carbon intensity and global trends towards
lower carbon footprint
• Real value of the energy is not directly experienced by final
consumer
• No market pull from retail side
• Society as a whole indirectly pays for fuel
• Opportunity/production cost of consumed fuel
• Market cost of imported fuel
• Real benefits for managing grid issues
GCC Solar Value Proposition
Implications on Value Potential
Value Potential
•
•
Customer Relationships
Project Sales/EPC
New model for finance
• Revenue
• Ownership
Sales Channels
•
•
•
RFP/Tenders
Some project acquisition
Limited opportunity for retail sales
Customer Segments
•
•
Utilities
Government or Governmental
Agencies
GCC Solar Value Proposition
Implications on Value Creation
Value Creation
Key Partnerships
• Regional finance institutions
• Traditional finance
• Sharia compliant finance
• Global OEMs
• Local manufacturing= Local jobs
• Next generation technologies
• Regionally specific advantages
• Market specific value
• Differentiable global value
Key Activities
• Capacity development
• Advisory services
• Construction Management
• Finance
Key Resources
•
•
•
Local experience/content
Grid Integration expertise
Power marketing expertise
GCC Solar Business Models
Model for Success
Value
Proposition
Value Creation
Key
Partnerships
• Regional
Finance
• Global OEM
• Next
generation
technologies
Key Activities
• Capacity
development
• Construction
Management
• Finance
Key Resources
• Local experience
• Grid Integration
Power marketing
Societal
• Resource
Preservation
• Energy Security
• Capacity
Development
• Environmental
Regulations
and
Incentives
Market
• Opportunity cost
of fuel
• Ancillary services
Value Potential
Customer
Relationships
• Project
Sales/EPC
• EOA
Sales
Channels
• RFP
• Project
acquisition
Customer
Segments
• Utilities
• Governments
• Government
Agencies