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Quantifying the impact of R&D on PV project financing costs

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  • Feldman, David
  • Jones-Albertus, Rebecca
  • Margolis, Robert

Abstract

Energy technology research and development (R&D) typically focuses on advancing the performance and reducing equipment and installation costs. However, such R&D can also have significant indirect impacts on other factors. Incorporating the impact that R&D activities have on financing costs can provide a more complete picture of the consequences of these decisions, and may allow policymakers to make better decisions. In this paper we discuss some historical examples of R&D impacting financing costs in the solar energy sector, summarize the areas of R&D that can impact financing, and describe methodological approaches that can be used to quantify the impact of R&D on financing costs and, as a result, the levelized cost of energy (LCOE). We estimate that R&D-driven reductions in financing costs in the solar sector, from current levels to low-risk levels, could reduce LCOE approximately 25%. Alternatively, without the R&D advances needed to prevent future risks and complications, financing costs in the solar sector could increase by as much as 115%.

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  • Feldman, David & Jones-Albertus, Rebecca & Margolis, Robert, 2020. "Quantifying the impact of R&D on PV project financing costs," Energy Policy, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:enepol:v:142:y:2020:i:c:s0301421520302706
    DOI: 10.1016/j.enpol.2020.111525
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    1. Sadat, Seyyed Ali & Hoex, Bram & Pearce, Joshua M., 2022. "A Review of the Effects of Haze on Solar Photovoltaic Performance," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    2. Chen, Feng & Wu, Bin & Lou, Wenqian, 2021. "An evolutionary analysis on the effect of government policies on green R & D of photovoltaic industry diffusion in complex network," Energy Policy, Elsevier, vol. 152(C).

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