Development of innovation systems for small island states: A functional analysis of the Barbados solar water heater industry

•Application of a functional analysis approach to capture the development of Barbados's solar water heating sector.•Presentation of new statistics suggesting that Barbados's solar water heating industry is in a period of market stagnation.•The strengthening of stakeholder networks is required to promote future growth.

Most small island states are under economic pressure to transition from energy systems dominated by imported oil, into systems based on clean energy technologies, which are often already economically viable due to local high energy prices. Guidance on transforming energy systems is limited with few examples available to policy makers. This paper applies a technological innovation system approach to recording the development of the much-lauded Barbados solar water heating industry and applies Bergek et al.'s (2008) functional analysis approach to put forward reasons for its successful adoption. The research concludes that the Barbados solar water heater industry actually appears to be in a state of market stagnation (at around 35% penetration) and using functional analysis identifies barriers and opportunities for future growth in the local and regional solar hot water heater market, as well as proposing the key actor networks necessary for success in sustainable energy technology based innovation system for small island states.