The supporting role of business models in the promotion of sustainable innovations in the energy sector: an explorative study in the Italian SMEs

Purpose of the paper: This paper aims to analyze how small-medium enterprises (SMEs) contribute to the development of a sustainable innovations in the energy sector such as geothermal heat pumps (GHPs) by implementing effective sustainable business models. Methodology: The study carried out an exploratory multiple case study with 8 SMEs operating in the Italian GHP market on the role of sustainable business models in supporting the development of sustainable innovations. Results: The analysis shows that sustainable business models exert a supporting function between sustainable innovation and sustainable value creation thanks to their ability to overcome the existing barriers to adopt sustainable innovations (i.e. GHP systems). This supporting role thus results from the firms’ capabilities and knowledge to assess and promote the peculiarities of selected sustainable innovation. Moreover, the analyzed business models foresee an ongoing support of customers before and after the adoption of sustainable innovation by communicating potential environmental benefits and providing additional services. Research limits: The main limitation is that the findings derive from a national case study with specific market conditions for GHPs which might influence the development of sustainable business models. Practical implications: The study supports firms aiming to develop and implement business models for boosting sustainable innovations through an effective assessment of selected sustainable innovation and dialogue with policy makers. Originality of the paper: The study opens the black box of unexplored relationships between sustainability innovations and business models by analyzing their main components (value proposition, supply chain and public institutions, customer interface and financial model).