Innovative business models for low or zero carbon buildings

Abstract

The building sector contributes to significant greenhouse gases emissions and energy consumption of the world. Low or zero carbon building (L/ZCB) has emerged as an innovative approach to reducing buildings’ energy use and carbon emissions. Previous research has put forward various technological and design solutions to achieving energy use and carbon reductions, towards net-zero or negative. Other studies examined the barriers such as limited customer demand and higher capital cost that impede the uptake of the L/ZCB approach. To overcome these barriers and realize the potential benefits from L/ZCB, firms need to innovate their business models (BMs) in order to redefine their revenue generation strategy and restructure their business processes. However, little research to date has examined L/ZCB from the perspective of BM. It is unclear what innovations may be required for designing companies’ BM for delivering L/ZCBs. There is an urgent need to understand the strategies and mechanisms of innovative BMs for L/ZCB. The aim of this research is thus to develop business strategies to help clients and developers design innovative BMs for successful L/ZCB delivery. This research has been carried out through the combination of the research activities including literature review, case studies, interviews and questionnaire surveys. First, an extensive literature review of BM and L/ZCB was carried out to identify the salient components of BM in the building sector and theoretical interactions between BM and L/ZCB. Initial case studies and semi-structured interviews were conducted to validate and refine the conceptual framework. Second, based on embedded, exploratory multiple-case study approach, this research identified and cross-compared the salient typology of BM innovations across four ZCB projects selected from Australia, Singapore, Japan and the UK, and analyzed the relationships between ZCB project-based and organization-based BM. Third, a preliminary list of key influencing factors was identified from a literature review. A questionnaire-based survey was then conducted to collect data on the significance of the selected influencing factors and innovative BM components from 132 L/ZCB professionals including developers/clients, consultants, contractors and government officials in Hong Kong. A model based on fuzzy set theory was used to ascertain the critical key factors influencing BM innovation for L/ZCBs. Fourth, the data obtained from the survey were analyzed using the structural equation modeling, with the aim to identify the relationships between BM innovation for L/ZCBs and its influencing factors. Finally, based on the second round of questionnaire survey, focus group meeting and expert interview, an ‘AHP-ANP-Fuzzy Integral’ integrated network was developed for evaluating the performance of innovative BMs for L/ZCB. Four innovative BM alternatives for L/ZCB developed from real-life cases were then selected for evaluation using the developed model. This research contributes to a better understanding of BM innovations for L/ZCB, and the developed ‘AHP-ANP-Fuzzy Integral’ integrated network provides stakeholders a consolidated model for the synthetic evaluation of innovative BMs for SB. The evidence of the research should help to explore the theory of BMs in the practical context of building, and demonstrate how value from L/ZCB can be created and captured through BM innovation.