Spotting The Next Google: A Big Winner in Solar

There are many solar energy collection methods that are competing for supremacy that include thin films, nano inks and particles, and crystalline silicon based materials. This is similar to the market for search engines during the dot-com era when Infoseek, Yahoo, Alta Vista and many others were vying for the largest audience.

So how does one spot the next “Google of solar”? While challenging, it may not be as mysterious as it seems. There are two things to consider about Google as they grew. First they did have a good technology. However whether Google’s technology was really that much better than Yahoo’s is not as important as the business model they brought to a sector that was entering maturity.

The key to finding the next Google of solar is to let today’s technologies battle and gain efficiency until one begins emerging as a standard, then find a company with a comparable or slightly better technology, whose business model is truly innovative.

If you are thinking in terms of timelines, business model maturity in an emerging market typically lags behind technology maturity, until a new entrant drives it a step forward. For example, Yahoo emerged as the winning “Search Engine 2.0”, but still relied on “Search Engine Business Model 1.0”, whereas Google entered the market as “Search Engine 2.5” while introducing “Search Engine Business Model 2.0”.

We are starting to see advances in solar energy business models, but they are still in the 1.x phase. One interesting example is the distributed power model used by companies like Recurrent Energy. Other solar business models range from financially focused (SunRun) to utility scale wholesaling (GreenVolts).

If we look further into the future, electricity itself may be traded as a consumer commodity, subject to auctions and reverse auctions. Consider the possibility that consumers one day may be able to ask different energy providers for their lowest price on 1,000 kilowatt-hours. The next Google in the solar space likely will have a business model that is a clear step in this direction.