IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v49y2012icp572-585.html
   My bibliography  Save this article

Why did the price of solar PV Si feedstock fluctuate so wildly in 2004–2009?

Author

Listed:
  • Yu, Yang
  • Song, Yuhua
  • Bao, Haibo

Abstract

Great attention has been paid to the origin of observed wild price fluctuations of solar PV Si feedstock in both contract and spot markets during 2004–2009. This paper sheds light on this issue and tries to resolve it by addressing the following questions: what kind of structural shock is underlying the price fluctuations of PV Si feedstock? How can we quantify the magnitude, timing and relative importance of these shocks? What are their dynamic effects on the real price of PV Si feedstock? By carefully studying development conditions, the structural decomposition of the real price of PV Si feedstock is proposed: exchange rate shocks, production cost shocks, aggregate demand shocks and demand shocks specific to feedstock markets. With a Structural Vector Autoregression model, the paper quantifies and verifies the impact of structural shocks on PV Si feedstock real price changes. Based on national data, an analysis is further taken to confirm the essential role of demand shocks specific to feedstock markets in determining sharper price fluctuations during 2004–2009. The results of this study have important implications for national solar PV development, which can be better promoted and administrated if structural shocks in feedstock markets can be carefully evaluated and understood.

Suggested Citation

  • Yu, Yang & Song, Yuhua & Bao, Haibo, 2012. "Why did the price of solar PV Si feedstock fluctuate so wildly in 2004–2009?," Energy Policy, Elsevier, vol. 49(C), pages 572-585.
    • Handle: RePEc:eee:enepol:v:49:y:2012:i:c:p:572-585
    DOI: 10.1016/j.enpol.2012.06.059
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421512005691
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2012.06.059?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Li, Wenhao, 2004. "Currency competition between Euro and US Dollar," Working Papers 18, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    2. Clostermann, Jörg & Schnatz, Bernd, 2000. "The determinants of the euro-dollar exchange rate: synthetic fundamentals and a non-existing currency," Discussion Paper Series 1: Economic Studies 2000,02, Deutsche Bundesbank.
    3. Stephen P. A. Brown and Mine K. Yucel, 2009. "Market Arbitrage: European and North American Natural Gas Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 167-186.
    4. Johnston, Angus & Kavali, Amalia & Neuhoff, Karsten, 2008. "Take-or-pay contracts for renewables deployment," Energy Policy, Elsevier, vol. 36(7), pages 2481-2503, July.
    5. Siliverstovs, Boriss & L'Hegaret, Guillaume & Neumann, Anne & von Hirschhausen, Christian, 2005. "International market integration for natural gas? A cointegration analysis of prices in Europe, North America and Japan," Energy Economics, Elsevier, vol. 27(4), pages 603-615, July.
    6. Lutz Kilian, 2009. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," American Economic Review, American Economic Association, vol. 99(3), pages 1053-1069, June.
    7. Bradley Ewing & Cynthia Lay Harter, 2000. "Co-movements of Alaska North Slope and UK Brent crude oil prices," Applied Economics Letters, Taylor & Francis Journals, vol. 7(8), pages 553-558.
    8. Glachant, Jean-Michel & Hallack, Michelle, 2009. "Take-or-pay contract robustness: A three step story told by the Brazil-Bolivia gas case?," Energy Policy, Elsevier, vol. 37(2), pages 651-657, February.
    9. Kathleen Arano & Marieta Velikova, 2009. "Price Convergence in Natural Gas Markets: City-Gate and Residential Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 129-154.
    10. Ron Alquist & Menzie D. Chinn, 2002. "Productivity and the Euro-Dollar Exchange Rate Puzzle," NBER Working Papers 8824, National Bureau of Economic Research, Inc.
    11. Jan Bentzen, 2007. "Does OPEC influence crude oil prices? Testing for co-movements and causality between regional crude oil prices," Applied Economics, Taylor & Francis Journals, vol. 39(11), pages 1375-1385.
    12. Muñoz, M. Pilar & Dickey, David A., 2009. "Are electricity prices affected by the US dollar to Euro exchange rate? The Spanish case," Energy Economics, Elsevier, vol. 31(6), pages 857-866, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pillai, Unni & McLaughlin, Jamison, 2013. "A model of competition in the solar panel industry," Energy Economics, Elsevier, vol. 40(C), pages 32-39.
    2. Wang, Richard & Hsu, Shu-Chien & Zheng, Saina & Chen, Jieh-Haur & Li, Xuran Ivan, 2020. "Renewable energy microgrids: Economic evaluation and decision making for government policies to contribute to affordable and clean energy," Applied Energy, Elsevier, vol. 274(C).
    3. Yu, Yang & Li, Hong & Bao, Haibo, 2016. "Price dynamics and market relations in solar photovoltaic silicon feedstock trades," Renewable Energy, Elsevier, vol. 86(C), pages 526-542.
    4. Strielkowski, Wadim & Štreimikienė, Dalia & Bilan, Yuriy, 2017. "Network charging and residential tariffs: A case of household photovoltaics in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 461-473.
    5. Ivan Hajdukovic, 2021. "The Impact of International Trade on the Price of Solar Photovoltaic Modules: Empirical Evidence," Working Papers hal-02488067, HAL.
    6. Pillai, Unni, 2015. "Drivers of cost reduction in solar photovoltaics," Energy Economics, Elsevier, vol. 50(C), pages 286-293.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nick, Sebastian & Thoenes, Stefan, 2014. "What drives natural gas prices? — A structural VAR approach," Energy Economics, Elsevier, vol. 45(C), pages 517-527.
    2. Dukhanina, Ekaterina & Massol, Olivier & Lévêque, François, 2019. "Policy measures targeting a more integrated gas market: Impact of a merger of two trading zones on prices and arbitrage activity in France," Energy Policy, Elsevier, vol. 132(C), pages 583-593.
    3. Koedijk, Kees G. & Tims, Ben & van Dijk, Mathijs A., 2004. "Purchasing power parity and the euro area," Journal of International Money and Finance, Elsevier, vol. 23(7-8), pages 1081-1107.
    4. Chiappini, Raphaël & Jégourel, Yves & Raymond, Paul, 2019. "Towards a worldwide integrated market? New evidence on the dynamics of U.S., European and Asian natural gas prices," Energy Economics, Elsevier, vol. 81(C), pages 545-565.
    5. Kaufmann, Robert K. & Dees, Stephane & Mann, Micheal, 2009. "Horizontal and vertical transmissions in the US oil supply chain," Energy Policy, Elsevier, vol. 37(2), pages 644-650, February.
    6. Ayman Omar, 2015. "West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 693-703.
    7. Ekaterina Dukhanina & Olivier Massol, 2017. "Spatial Integration of Natural Gas Markets A Litterature Review," Working Papers hal-03187890, HAL.
    8. Asche, Frank & Misund, Bård & Sikveland, Marius, 2013. "The relationship between spot and contract gas prices in Europe," Energy Economics, Elsevier, vol. 38(C), pages 212-217.
    9. Maslyuk, Svetlana & Smyth, Russell, 2008. "Unit root properties of crude oil spot and futures prices," Energy Policy, Elsevier, vol. 36(7), pages 2591-2600, July.
    10. Karanfil, Fatih & Omgba, Luc Désiré, 2017. "Reconsidering the scarcity factor in the dynamics of oil markets: An empirical investigation of the (mis)measurement of oil reserves," Energy, Elsevier, vol. 137(C), pages 209-218.
    11. Jennifer Rushlow & Paul Bauer, 2021. "How the Removal of a Market Barrier Enhanced Market Efficiency: The Case of WTI and Brent Crude Oil Prices," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(1), pages 87-96, March.
    12. Kaufmann, Robert K. & Banerjee, Shayan, 2014. "A unified world oil market: Regions in physical, economic, geographic, and political space," Energy Policy, Elsevier, vol. 74(C), pages 235-242.
    13. Baba, Amina & Creti, Anna & Massol, Olivier, 2020. "What can be learned from the free destination option in the LNG imbroglio?," Energy Economics, Elsevier, vol. 89(C).
    14. Ana Gómez-Loscos & Mar𨀠 Dolores Gadea & Antonio Montañ鳠, 2012. "Economic growth, inflation and oil shocks: are the 1970s coming back?," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4575-4589, December.
    15. Maitra, Debasish & Chandra, Saurabh & Dash, Saumya Ranjan, 2020. "Liner shipping industry and oil price volatility: Dynamic connectedness and portfolio diversification," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    16. Wiggins, Seth & Etienne, Xiaoli, 2015. "US Natural Gas Price Determination: Fundamentals and the Development of Shale," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205788, Agricultural and Applied Economics Association.
    17. Wiggins, Seth & Etienne, Xiaoli L., 2017. "Turbulent times: Uncovering the origins of US natural gas price fluctuations since deregulation," Energy Economics, Elsevier, vol. 64(C), pages 196-205.
    18. Roy, Archi & Soni, Anchal & Deb, Soudeep, 2023. "A wavelet-based methodology to compare the impact of pandemic versus Russia–Ukraine conflict on crude oil sector and its interconnectedness with other energy and non-energy markets," Energy Economics, Elsevier, vol. 124(C).
    19. Arano, Kathleen & Velikova, Marieta, 2010. "Estimating the long-run equilibrium relationship: The case of city-gate and residential natural gas prices," Energy Economics, Elsevier, vol. 32(4), pages 901-907, July.
    20. Szymon Wlazlowski & Bjorn Hagstromer & Monica Giulietti, 2011. "Causality in crude oil prices," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3337-3347.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:49:y:2012:i:c:p:572-585. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.