In 1918 one in thirteen American families owned a car. Eleven years later 80% of American families owned one. The main reason the US auto market went from early adopters to nearly full penetration in just over a decade was an innovation launched by General Motors. It was not a new engine, transmission, or even a technology innovation.
In 1919 GM partnered with DuPont to form the General Motors Acceptance Corporation (GMAC) to offer a new financial innovation: consumers car loans. (1)
Seven years later 75% of all car buyers bought cars on credit. It was a business model that made cars affordable to the American mainstream buyer. In other words, it was a business model innovation that disrupted the transportation industry in the early 20th century.
From Car Loans to Solar Loans
Fast forward to the 21st century. In 2008 a company called SunEdison introduced the concept of solar-as-as-service. Residential and commercial solar power buyers would no longer need to invest capital in purchasing solar panels.
SunEdison offered to finance, install, own and maintain the solar panels on the rooftop of its customers. Homeowners did not have to take any technology, financial, or maintenance risks. At the end of the (20-year) contract, the customer had a choice of purchasing the equipment at deep discounts or having them taken off the roof.
Soon after SunEdison, another Silicon Valley solar installer SolarCity [NASDAQ: SCTY] created the SolarLease and the solar market exploded. The concept caught on and other Silicon Valley companies such as Sungevity and SunRun joined SunEdison and SolarCity in offering ‘Solar Leases’ or ‘Solar PPAs’.
Partly as a result of these financial innovations, the solar market in America quadrupled over the following four years. About 80% of residential and commercial installations are now financed by third party-companies. In Colorado the number is closer to 90%.
Technology innovation is clearly important. Making the right Strategic Choices (whole product, positioning, product/market fit, etc) is clearly important. But Business Model innovation may be the key that unlocks a new market or disrupts an existing market.
 “Cars in the 1920’s”, Kim Kenney, Suite 101, http://suite101.com/article/cars-in-the-1920s-a90169
 “Sunrun Closes $630M in Rooftop Solar Funds From JPMorgan, US Bank“, GreentechMedia, June 26, 2013: http://www.greentechmedia.com/articles/read/Sunrun-Closes-630-Million-in-Rooftop-Solar-Funding-from-JPMorgan-US-Bank