The power sector stands at the edge of a transition phase in which the liberalization of energy markets permits new actors to be involved and develop new business models. The emerging businesses seem to have a different logic than the centralized, large-scale and fossil fuel based energy utilities. Energy entrepreneurs are promoting clean energy technologies and creating innovative business models that associate commercial benefits and sustainability aspects. However, the process of finding out the appropriate business models poses challenges to new market actors, researchers and policy makers. This paper explores how new entrepreneurs in the energy sector create and capture value from innovative business models. The study combines the distributed renewable energy resources and demand-side management including energy efficiency and demand response. The paper draws on activity system business model as an analytical framework in order to outline the key characteristics of the energy entrepreneurship business model innovation. The result can assist new market actors and professional during their early development stage to construct new business models in the energy market. As a result, the paper proposes a business model framework for energy entrepreneurship that is characterized by decentralized small-scale assets, service-oriented, end-user relationship and process focus, consumer co-provider, intermediary model and pay-per-use revenue. Furthermore, the regime barriers and the environmental impacts have been analysed.Read less <