Access to electricity produces greater levels of economic value and increases the quality of life in
emerging markets across the globe. Emerging economies have surpassed developed nations in
clean energy investment and deployment1
, but based on our review of the literature, there is a lack
of high-level study on the factors that most affect the success of these businesses. The goal of this
project is to identify these success factors, and use them to inform entrepreneurs’ strategic
decision-making as well as elucidate the environments in which these ventures have a higher
probability of success. By better understanding what drives success in the renewable energy
industry, both entrepreneurs and key stakeholders such as policy makers, investors, and interested
non-governmental organizations (NGOs) can better prioritize their efforts and investments to drive
increased levels of clean energy adoption.
This project focuses on clean energy business models in two emerging economies: India and
Uganda. These countries have significant differences in levels of access to energy and
development of their entrepreneurial landscapes, and therefore, provide a broad scope for analysis.
This report presents an overview of existing empirical research on factors that hinder or increase
success of business models, identifies potential gaps in this research, and presents analysis based
on qualitative, in-country interviews conducted by our team. Based on a comparative analysis
between the literature review and interview findings, the team drew conclusions about factors that
would benefit from better coordination and investment from industry players. The team also
identified aspects of the entrepreneurial experience in developing countries that are strong
candidates for further academic research.
Throughout the project, entrepreneurs and industry experts (such as the stakeholders above)
highlighted several of the key topics identified in existing research, including the challenge of
attracting private investment, strategies for revenue collection given limited ability to pay among
customers, the effect of domestic energy policy, and the industry’s lack of institutional support,
whether it be nonexistent or ineffective small business associations, trade associations, lobbying
groups, etc. While it was reassuring to see entrepreneur and stakeholder interviews validate what
had been uncovered in the literature review, the key value created by this project was largely the
nuance the interviews provided regarding the structural issues that were inhibiting growth for the
renewable and clean energy industries, and provide context around how some of these issues were
overcome in India and Uganda. Our research questions aimed to understand how entrepreneurs
can directly improve their prospects for success and where their efforts require coordination with
other partners in the renewable energy value chain or key policymakers.
The interviews revealed a clear distinction between the factors that entrepreneurs and industry
experts found to be most relevant and important to the success of clean energy entrepreneurs.
Factors such as positioning/strategy, company structure, ability to collect revenue, and business
model flexibility were by far more relevant for entrepreneurs than industry experts. This
understanding of which factors are more directly in entrepreneurs’ control can allow them to
prioritize which factors to focus their attention and resources on. In contrast, industry experts
regularly mentioned factors that were not top of mind for entrepreneurs in interviews such as
domestic energy policy, customer financial resources, and distribution and utility infrastructure.
Despite the relative dichotomy between entrepreneurs and industry experts, there was some
overlap among what factors the two groups found to be the most important. These factors include
talent attraction and retention, accessibility of private investment, competitive landscape,
consumer education and strategic partnerships. The overlapping factors indicate the significance
of these challenges, and highlights the potential areas where strategic partnerships would be the
most beneficial to foster a healthier entrepreneurial ecosystem.
Overall, the interviews raised new issues that were not discussed as in-depth in the literature. For
example, the conclusion that there is a lack of product awareness and trust among most consumers,
and that regulatory uncertainty of even the most well-intentioned policies can be extremely
detrimental. In India, there were difficulties retaining employees. In Uganda, there appears to be a
weak pipeline of educated, local talent. These issues demand comprehensive solutions that can
only be realized by greater cooperation and coordination between entrepreneurs, industry experts,
and policy makers. In sum, the hope is that this research will inform market players of key factors
of entrepreneurial success and act as a catalyst for future research. In particular, what factors do
entrepreneurs and industry experts see affecting success, where do they see greater opportunities
for coordination, and how are the Indian and Ugandan experiences representative of other
emerging markets?Master of ScienceSchool for Environment and SustainabilityUniversity of Michiganhttps://deepblue.lib.umich.edu/bitstream/2027.42/148815/1/Business Models for Energy Entrepreneurship in Emerging Markets_P46.pd