Developing and managing photovoltaic facilities based on third-party ownership business models in buildings

Purpose: The purpose of this paper is to demonstrate the growing trend of developing and managing photovoltaic facilities owned by third parties in buildings, as a possible alternative to energy performance contracting. Design/methodology/approach: Based on an established business model template, analysis is carried out on the framework of using third-party finance in the provision of photovoltaic facilities in buildings. Case studies in the USA and China enable comparison of policy tools enabling this approach. Findings: While barriers exist in the common energy performance contracting approach for renewable installations owned by the building owner, vesting photovoltaic equipment with a third party for a certain period has become a viable business alternative as long as revenue is generated through a power purchase agreement or lease arrangement with the building owner. Research limitations/implications: The third-party ownership business model works better if sufficient policy incentives exist alongside the revenue brought about by renewable energy. Hence, governments have to create the right environment. Originality/value: Win-win situations have been identified through case studies in countries with burgeoning renewable energy use in buildings, notably the USA and China, giving new insights on facilities management.