'Demand pull' government policies to support product-service system activity: the case of energy service companies (ESCos) in the UK

Matthew J. Hannon, Timothy J. Foxon, William F. Gale

Research output: Contribution to journalArticle

33 Citations (Scopus)

Abstract

Product-Service Systems (PSSs) constitute a family of service-based business models designed to satisfy our societal needs in an economically and environmentally sustainable manner. To date however PSS application has remained niche due to a variety of critical barriers. This paper explores how 'demand pull' national government policies could support PSS activity by addressing these barriers and cultivating market demand. Lessons are drawn from a case study of how regulatory, economic incentive, informative and procurement policies have supported Energy Service Company (ESCo) activity in the UK; a sub-set of the PSS family focused on energy service provision. Subsequently five policy recommendations are presented to support PSS activity: (1) balancing economic incentives and regulatory disincentives; (2) promoting indirect policy support; (3) redesigning existing market structures; (4) promoting locally-led PSS activity; and (5) creating stable policy frameworks. The paper warns however that national government policy cannot easily address all PSS barriers, such as customer preferences, international developments, technological progress and inherent business model weaknesses, pointing to the need for other complementary solutions. Furthermore, other governance actors beside national government could also implement PSS supporting policies.

LanguageEnglish
Pages900-915
Number of pages16
JournalJournal of Cleaner Production
Volume108
Issue numberA
Early online date29 May 2015
DOIs
Publication statusPublished - 1 Dec 2015
Externally publishedYes

Fingerprint

energy
Industry
Economics
Lead
government policy
demand
services
product
Government policy
Demand-pull
Product-service systems
Energy
market
service provision
technological development
niche
policy
Business model
Economic incentives
need

Keywords

  • energy service company (ESCo)
  • government 'demand pull' policy
  • innovation system
  • product service system (PSS)
  • sustainable business model

Cite this

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title = "'Demand pull' government policies to support product-service system activity: the case of energy service companies (ESCos) in the UK",
abstract = "Product-Service Systems (PSSs) constitute a family of service-based business models designed to satisfy our societal needs in an economically and environmentally sustainable manner. To date however PSS application has remained niche due to a variety of critical barriers. This paper explores how 'demand pull' national government policies could support PSS activity by addressing these barriers and cultivating market demand. Lessons are drawn from a case study of how regulatory, economic incentive, informative and procurement policies have supported Energy Service Company (ESCo) activity in the UK; a sub-set of the PSS family focused on energy service provision. Subsequently five policy recommendations are presented to support PSS activity: (1) balancing economic incentives and regulatory disincentives; (2) promoting indirect policy support; (3) redesigning existing market structures; (4) promoting locally-led PSS activity; and (5) creating stable policy frameworks. The paper warns however that national government policy cannot easily address all PSS barriers, such as customer preferences, international developments, technological progress and inherent business model weaknesses, pointing to the need for other complementary solutions. Furthermore, other governance actors beside national government could also implement PSS supporting policies.",
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'Demand pull' government policies to support product-service system activity : the case of energy service companies (ESCos) in the UK. / Hannon, Matthew J.; Foxon, Timothy J.; Gale, William F.

In: Journal of Cleaner Production, Vol. 108, No. A, 01.12.2015, p. 900-915.

Research output: Contribution to journalArticle

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