1. Consumer system architecture

2. Consumer system deployment 100 Chevy Volts Home services systems Sony, Intel, Best Buy Whirlpool Smart appliances Residential PV – 175 homes

3. 2008-2010 Smart grid “ could be as big as the original Internet. ” “ Greentech could be the largest economic opportunity of the 21st century. ” “ Next-generation smart grid technology [will] grow to a $20 billion market by 2015. ” “ Unlike the Internet, which went through a rapid boom-and-bust cycle – a classic bubble – the transition to new energy... technologies will look more like a long boom. ” “ Clean tech offers the promise to be the next big engine of business and economic growth. ”

4. Summer 2011 “ Google Kills PowerMeter ” June 24, 2011 “ Microsoft Follows Google to Home Energy Graveyard ” July 1, 2011 “ Cleantech investing drops by a third ” July 6, 2011 “ The Crisis in Clean Energy ” July/August 2011 “ SolarWorld shuts solar panel factory in California ” September 2, 2011 “ Evergreen Solar files for bankruptcy ” August 15, 2011 “ Solyndra to file for bankruptcy, lay off 1,100 ” August 31, 2011

5. Why the clean energy economy is underperformin g Preconditions for disruptive innovations have yet to occur Disruptive innovations are necessary to achieve significant growth New technologies have been deployed overwhelmingly by utilities. New products and services overwhelmingly ignore innovation theory.

6. 3 ways new technologies enter market Sustaining innovation Within existing market and delivery structure Regulatory fiat Policy mandates Disruptive innovation New customers or consumption occasions Boeing 777, plasma TV Smoke alarm, corn ethanol Telephone, transistor radio, mobile phone, Japanese photocopiers

7. Economic growth potential Sustaining innovation Moderate, incremental Regulatory fiat Moderate or negative Disruptive innovation Significant

8. Sustaining innovations How deployed Within existing market and delivery structure Customers Most demanding customers in industry What they’ll pay for Improvements to incumbent systems along metrics they value Capability: software upgrades Ethical Winning companies Incumbents

9. Sustaining innovations Cramming Deploying new technologies into incumbent models Impact Not disruptive New technology’s features a liability Company tries to convince customers to change behavior or put up with something they don’t seem to want even though they don’t work well in that model

10. Regulatory fiat How deployed Regulation, legislation Customers Subject of government mandate What they’ll pay for What is required to comply Distinction between product mandate and performance mandate

11. Disruptive innovations How deployed New platform Customers Customer whose needs aren ’ t well met by incumbent offerings Requirements Solves a problem for customers that incumbent solutions do not do well New platform Killer app New location / context of consumption Winning companies New entrants

12. Disruptive innovations Platform characteristics Built on other platforms Capable of more than one use “ Plug and play ” light bulb sockets, 120v outlets, USB Examples: well-defined interfaces Microsoft Windows Internet Electric grid Empower customers to do job in new context

13. Disruptive innovations Platform characteristics

14. Disruptive innovations Platform characteristics

15. Disruptive innovations Platform characteristics

16. Disruptive innovations Platform characteristics

17. Disruptive innovations Platform characteristics

18. Disruptive innovations Platform characteristics

19. Disruptive innovations Platform characteristics

20. Disruptive innovations Platform characteristics

21. Disruptive innovations iPhone and App Store GPS services Calculator makers Camera companies CD and DVD manufacturers Video camera companies Map makers Stopwatch makers Compass makers Large software companies disruptive to – Phone companies

22. Innovation checklist What type of innovation? Electric vehicle In-home charging In-home charging with – rooftop solar PV Solar farms Home energy management system in-home battery Public charging stations

23. Sustaining innovations Gas-fired peakers Smart meters Demand response Time of use pricing Electric vehicles

24. Sustaining innovations Solar farms Utility-run home energy management Utility-scale Batteries Cramming

25. Roadmap Platforms Home Services Systems New type of distributed grid

26. Disruptive Centered on Home Services Systems Leverage energy data for new products and services Similar to App Store model Roadmap

27. Vehicle charging in residential garage Natural gas grid Rooftop PV charging of vehicles Apartment building microgrids Home apps Home health care monitoring

28. Innovation checklist What is the product? Who is the target customer? Where is the product deployed or used? Is the product deployed or used in a different location than the incumbent solution? What job is the customer trying to get done with the product? What are the incumbent solutions? What type of innovation is it? Is the customer either a low-end customer or a new consumer of products that do this job?

29. Innovation checklist What are the metrics of performance that are important to the most demanding customers in the industry? How do target customers feel underserved by incumbent solutions? Does the product have performance limitations compared to incumbent products? How would the product provide superior performance in the area where the target customer feels underserved? What refinements would be needed in the product to make it attractive to the mainstream market? Sustaining innovations

30. Innovation checklist What is the new platform on which the product is deployed? Which uses does the platform enable? How does the product help customers do more easily and effectively what they were already trying to get done? Disruptive innovations Does the product ’ s success depend on the customer changing behavior or adopting new priorities?