Business model innovation for delivering zero carbon buildings

Zero carbon building (ZCB) has emerged as an innovative approach to improving building energy performance and reducing building carbon emissions. Previous studies have devoted to analyzing the technical feasibility and design issues of ZCB, and examining barriers to adopt ZCB in market, social, regulatory and financial aspects. However, few have explored the role of business models in the delivery of ZCBs, which may explain the slow uptake of the ZCB approach. The aim of this paper is thus to examine the effect of business model on ZCB, and explore how business model innovation can help to deliver ZCBs. The paper first reviews the concept of ZCB and identifies the challenges to ZCB based on the political, economic, social, technological, environmental and legal analytical framework. The paper then investigates the conceptual framework of business models for ZCB. Eight key elements of business model are identified, which include product/service, value proposition, target customer, organization and activities, role in value network, resource and core competency, competitive advantage, cost and revenue model. Theoretical bases of business model innovation are examined in order to establish a process-based framework of business model innovation. Evidence was collected to substantiate the arguments through case study with one recent ZCB project. The results reveal innovations in three interrelated components of business model, namely, value offering, value creation and delivery, and value capture, and demonstrate how value from ZCB can be created and captured through these components. The findings help to demonstrate how business model innovation helps to deliver ZCBs.