SolarCity SCTY -5.97% is one stellar example: they took a pretty simple piece of technology, rooftop solar panels, and became the leading solar installer in the U.S. by revolutionizing the financial vehicles that allow customers to receive a system with no money down, at less cost than their current electricity rate, and without having to go through all the paperwork necessary to monetize government incentives. Financing provided by SolarCity is much more than a revenue growth accelerator, it’s at the core of the business model itself. By focusing only on states that offer adequate government incentives, a relatively small market when compared to the global potential of clean tech, SolarCity has seen its sales, and stock, succeed. Shares in SolarCity are up more than 200% since their IPO in late-2012. Delving beyond their annual revenues, SolarCity has surpassed $1 billion in solar energy systems deployed last year.
At the opposite end of the spectrum we see companies with a strong technology background that failed to figure out an adequate business model. Take Southwest Windpower, a GE-backed distributed wind turbine manufacturer, once tipped to be the next big thing in renewable energy. While their technology was second to none, their focus on wind turbine supply, rather than on solving their customers’ problems, led to disappointing growth.
Companies like New York-based UGE merge technology with a customer-focused business model. In order to reach scale, UGE focuses on specific market opportunities by looking for technological challenges and high barriers to entry. A specific example are telecom towers in developing countries, where users are most in need of cheaper and more secure energy.
We oft hear of the penetration rate of cell phones in emerging markets, but what we don’t hear about is the enormous challenge involved in powering the towers that support those phones in countries where the grid is unreliable and, in many places, unavailable. In many cases, these towers are powered by diesel at a very high cost. UGE has taken a leadership position in powering towers with its technology, using off-grid wind turbines and solar energy storage. Clients include Carlos Slim’s America Movil; while most of these sites are in developing countries, the company also works with Verizon in the U.S. for some of its remote sites.
Read More: http://www.forbes.com/sites/afontevecchia/2013/06/10/making-green-energy-profitable-the-boom-in-distributed-renewable-energy/