Smart energy driven business model innovation: An analysis of existing business models and implications for business model change in the energy sector

The Internet of Things in the energy sector manifests itself in the form of smart energy technologies that bring forth new smart energy business models (BMs). This technological progress alongside with decentralization of renewable energy production, market liberalization, and changing customer demands is making it difficult for organizations to keep up with the changing nature of the energy industry. Traditional energy utilities are challenged by the emerging smart energy BMs as the latter can replace established business operations. This is especially true for the customer segment of private households, which has become a focus of BM innovation in recent years. To address the challenge of low market transparency and the dynamics of technology-induced BM change, we analyze the BMs of 175 energy firms addressing the end consumer market by using a static (i.e., deriving BM representations) and dynamic BM lens (i.e., analysis of BM changes). We identify eight smart energy BM representations in form of BM archetypes. The findings are set in relation to a theoretical understanding of BM change revealing a hesitancy of traditional utilities to revise their BMs. Instead, the energy utilities prefer to build on BM extensions by outsourcing the innovation activities in subsidiaries or by using partnerships. The BM archetypes together with the BM changes provide an overview of the current smart energy market for private households and can serve as a starting point for BM innovation especially for energy utilities.