IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v124y2020ics1364032120300484.html
   My bibliography  Save this article

Cost reduction or electricity penetration: Government R&D-induced PV development and future policy schemes

Author

Listed:
  • Ding, H.
  • Zhou, D.Q.
  • Liu, G.Q.
  • Zhou, P.

Abstract

Government policies and investments in photovoltaic (PV) research and development (R&D) have contributed to the rapid development of a PV industry through technology push in most countries over the past decade. It is worth investigating the effectiveness of investment-drive R&D policies at a global level, particularly how they work in reducing the costs of PV technologies. This study constructs a learning curve model to assess the performance of PV R&D policies in China, Germany, the United States and Japan. Market information—for example, PV module production, PV installation and PV technology improvement—is utilised to analyse how these policies take effect. The results show that PV R&D investments are efficient in decreasing the production costs of PV modules, which positively affects the development of PV module markets. However, weak PV technology conditions (including conversion efficiency, reliability) and low PV electricity penetration levels have resulted in surpluses in PV module markets, as well as PV electricity curtailment around the world. It is suggested that future R&D policies should contribute more to improving conversion efficiencies (the structure of technology push power) and grid integration technologies (demand pull power) for PV systems.

Suggested Citation

  • Ding, H. & Zhou, D.Q. & Liu, G.Q. & Zhou, P., 2020. "Cost reduction or electricity penetration: Government R&D-induced PV development and future policy schemes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 124(C).
    • Handle: RePEc:eee:rensus:v:124:y:2020:i:c:s1364032120300484
    DOI: 10.1016/j.rser.2020.109752
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032120300484
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2020.109752?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. Baker, Erin & Chon, Haewon & Keisler, Jeffrey, 2009. "Advanced solar R&D: Combining economic analysis with expert elicitations to inform climate policy," Energy Economics, Elsevier, vol. 31(Supplemen), pages 37-49.
    2. Huang, Ping & Negro, Simona O. & Hekkert, Marko P. & Bi, Kexin, 2016. "How China became a leader in solar PV: An innovation system analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 777-789.
    3. Nordhaus, William, 2011. "Designing a friendly space for technological change to slow global warming," Energy Economics, Elsevier, vol. 33(4), pages 665-673, July.
    4. Harry Apostoleris & Sgouris Sgouridis & Marco Stefancich & Matteo Chiesa, 2018. "Evaluating the factors that led to low-priced solar electricity projects in the Middle East," Nature Energy, Nature, vol. 3(12), pages 1109-1114, December.
    5. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
    6. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?," International Review of Environmental and Resource Economics, now publishers, vol. 4(1), pages 51-92, June.
    7. Papineau, Maya, 2006. "An economic perspective on experience curves and dynamic economies in renewable energy technologies," Energy Policy, Elsevier, vol. 34(4), pages 422-432, March.
    8. Argote, L. & Epple, D., 1990. "Learning Curves In Manufacturing," GSIA Working Papers 89-90-02, Carnegie Mellon University, Tepper School of Business.
    9. Shukla, Akash Kumar & Sudhakar, K. & Baredar, Prashant & Mamat, Rizalman, 2018. "Solar PV and BIPV system: Barrier, challenges and policy recommendation in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3314-3322.
    10. Huenteler, Joern & Schmidt, Tobias S. & Kanie, Norichika, 2012. "Japan's post-Fukushima challenge – implications from the German experience on renewable energy policy," Energy Policy, Elsevier, vol. 45(C), pages 6-11.
    11. Ragwitz, Mario & Miola, Apollonia, 2005. "Evidence from RD&D spending for renewable energy sources in the EU," Renewable Energy, Elsevier, vol. 30(11), pages 1635-1647.
    12. Zurita, Adriana & Castillejo-Cuberos, Armando & García, Maurianny & Mata-Torres, Carlos & Simsek, Yeliz & García, Redlich & Antonanzas-Torres, Fernando & Escobar, Rodrigo A., 2018. "State of the art and future prospects for solar PV development in Chile," Renewable and Sustainable Energy Reviews, Elsevier, vol. 92(C), pages 701-727.
    13. Pillai, Unni, 2015. "Drivers of cost reduction in solar photovoltaics," Energy Economics, Elsevier, vol. 50(C), pages 286-293.
    14. Weyant, John P., 2011. "Accelerating the development and diffusion of new energy technologies: Beyond the "valley of death"," Energy Economics, Elsevier, vol. 33(4), pages 674-682, July.
    15. Lehr, Ulrike & Nitsch, Joachim & Kratzat, Marlene & Lutz, Christian & Edler, Dietmar, 2008. "Renewable energy and employment in Germany," Energy Policy, Elsevier, vol. 36(1), pages 108-117, January.
    16. Tooraj Jamasb, 2007. "Technical Change Theory and Learning Curves: Patterns of Progress in Electricity Generation Technologies," The Energy Journal, , vol. 28(3), pages 51-72, July.
    17. Nemet, Gregory F. & Kammen, Daniel M., 2007. "U.S. energy research and development: Declining investment, increasing need, and the feasibility of expansion," Energy Policy, Elsevier, vol. 35(1), pages 746-755, January.
    18. Blanford, Geoffrey J., 2009. "R&D investment strategy for climate change," Energy Economics, Elsevier, vol. 31(Supplemen), pages 27-36.
    19. Gregory F. Nemet & Erin Baker, 2009. "Demand Subsidies Versus R&D: Comparing the Uncertain Impacts of Policy on a Pre-commercial Low-carbon Energy Technology," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 49-80.
    20. Grau, Thilo & Huo, Molin & Neuhoff, Karsten, 2012. "Survey of photovoltaic industry and policy in Germany and China," Energy Policy, Elsevier, vol. 51(C), pages 20-37.
    21. Peters, Michael & Schneider, Malte & Griesshaber, Tobias & Hoffmann, Volker H., 2012. "The impact of technology-push and demand-pull policies on technical change – Does the locus of policies matter?," Research Policy, Elsevier, vol. 41(8), pages 1296-1308.
    22. Duan, Hongbo & Mo, Jianlei & Fan, Ying & Wang, Shouyang, 2018. "Achieving China's energy and climate policy targets in 2030 under multiple uncertainties," Energy Economics, Elsevier, vol. 70(C), pages 45-60.
    23. Zhi, Qiang & Sun, Honghang & Li, Yanxi & Xu, Yurui & Su, Jun, 2014. "China’s solar photovoltaic policy: An analysis based on policy instruments," Applied Energy, Elsevier, vol. 129(C), pages 308-319.
    24. Bointner, Raphael, 2014. "Innovation in the energy sector: Lessons learnt from R&D expenditures and patents in selected IEA countries," Energy Policy, Elsevier, vol. 73(C), pages 733-747.
    25. Aalbers, Rob & Shestalova, Victoria & Kocsis, Viktória, 2013. "Innovation policy for directing technical change in the power sector," Energy Policy, Elsevier, vol. 63(C), pages 1240-1250.
    26. Béla Nagy & J Doyne Farmer & Quan M Bui & Jessika E Trancik, 2013. "Statistical Basis for Predicting Technological Progress," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-7, February.
    27. Huo, Mo-lin & Zhang, Dan-wei, 2012. "Lessons from photovoltaic policies in China for future development," Energy Policy, Elsevier, vol. 51(C), pages 38-45.
    28. Huang, Cui & Su, Jun & Zhao, Xiaoyuan & Sui, Jigang & Ru, Peng & Zhang, Hanwei & Wang, Xin, 2012. "Government funded renewable energy innovation in China," Energy Policy, Elsevier, vol. 51(C), pages 121-127.
    29. Debbarma, Mary & Sudhakar, K. & Baredar, Prashant, 2017. "Thermal modeling, exergy analysis, performance of BIPV and BIPVT: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1276-1288.
    30. Duan, Hongbo & Mo, Jianlei & Fan, Ying & Wang, Shouyang, 2018. "Achieving China's energy and climate policy targets in 2030 under multiple uncertainties," LSE Research Online Documents on Economics 86481, London School of Economics and Political Science, LSE Library.
    31. David Cyranoski, 2011. "Japan rethinks its energy policy," Nature, Nature, vol. 473(7347), pages 263-263, May.
    32. Söderholm, Patrik & Sundqvist, Thomas, 2007. "Empirical challenges in the use of learning curves for assessing the economic prospects of renewable energy technologies," Renewable Energy, Elsevier, vol. 32(15), pages 2559-2578.
    33. Denholm, Paul & Hand, Maureen, 2011. "Grid flexibility and storage required to achieve very high penetration of variable renewable electricity," Energy Policy, Elsevier, vol. 39(3), pages 1817-1830, March.
    34. Zheng, Cheng & Kammen, Daniel M., 2014. "An innovation-focused roadmap for a sustainable global photovoltaic industry," Energy Policy, Elsevier, vol. 67(C), pages 159-169.
    35. Jochen Markard, 2018. "The next phase of the energy transition and its implications for research and policy," Nature Energy, Nature, vol. 3(8), pages 628-633, August.
    36. Kevin Anderson, 2015. "Talks in the city of light generate more heat," Nature, Nature, vol. 528(7583), pages 437-437, December.
    37. Sagar, Ambuj D. & van der Zwaan, Bob, 2006. "Technological innovation in the energy sector: R&D, deployment, and learning-by-doing," Energy Policy, Elsevier, vol. 34(17), pages 2601-2608, November.
    38. Wu, Ching-Yan & Mathews, John A., 2012. "Knowledge flows in the solar photovoltaic industry: Insights from patenting by Taiwan, Korea, and China," Research Policy, Elsevier, vol. 41(3), pages 524-540.
    39. William D. Nordhaus, 2014. "The Perils of the Learning Model for Modeling Endogenous Technological Change," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    40. Lewis C. King & Jeroen C. J. M. van den Bergh, 2018. "Implications of net energy-return-on-investment for a low-carbon energy transition," Nature Energy, Nature, vol. 3(4), pages 334-340, April.
    41. Kim, Kyunam & Kim, Yeonbae, 2015. "Role of policy in innovation and international trade of renewable energy technology: Empirical study of solar PV and wind power technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 717-727.
    42. Isoard, Stephane & Soria, Antonio, 2001. "Technical change dynamics: evidence from the emerging renewable energy technologies," Energy Economics, Elsevier, vol. 23(6), pages 619-636, November.
    43. Wiesenthal, Tobias & Leduc, Guillaume & Haegeman, Karel & Schwarz, Hans-Günther, 2012. "Bottom-up estimation of industrial and public R&D investment by technology in support of policy-making: The case of selected low-carbon energy technologies," Research Policy, Elsevier, vol. 41(1), pages 116-131.
    44. Klaassen, Ger & Miketa, Asami & Larsen, Katarina & Sundqvist, Thomas, 2005. "The impact of R&D on innovation for wind energy in Denmark, Germany and the United Kingdom," Ecological Economics, Elsevier, vol. 54(2-3), pages 227-240, August.
    45. Nemet, Gregory F., 2009. "Demand-pull, technology-push, and government-led incentives for non-incremental technical change," Research Policy, Elsevier, vol. 38(5), pages 700-709, June.
    46. Leah C. Stokes & Christopher Warshaw, 2017. "Renewable energy policy design and framing influence public support in the United States," Nature Energy, Nature, vol. 2(8), pages 1-6, August.
    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. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "The post COVID-19 green recovery in practice: Assessing the profitability of a policy proposal on residential photovoltaic plants," Energy Policy, Elsevier, vol. 147(C).
    2. Ma, Rufei & Cai, Huan & Ji, Qiang & Zhai, Pengxiang, 2021. "The impact of feed-in tariff degression on R&D investment in renewable energy: The case of the solar PV industry," Energy Policy, Elsevier, vol. 151(C).
    3. Chang, Lei & Qian, Chong & Dilanchiev, Azer, 2022. "Nexus between financial development and renewable energy: Empirical evidence from nonlinear autoregression distributed lag," Renewable Energy, Elsevier, vol. 193(C), pages 475-483.
    4. Libo Zhang & Qian Du & Dequn Zhou, 2021. "Grid Parity Analysis of China’s Centralized Photovoltaic Generation under Multiple Uncertainties," Energies, MDPI, vol. 14(7), pages 1-19, March.
    5. Ming Fang & Chiu-Lan Chang, 2022. "Nexus between fiscal imbalances, green fiscal spending, and green economic growth: empirical findings from E-7 economies," Economic Change and Restructuring, Springer, vol. 55(4), pages 2423-2443, November.
    6. Martina Pilloni & József Kádár & Tareq Abu Hamed, 2022. "The Impact of COVID-19 on Energy Start-Up Companies: The Use of Global Financial Crisis (GFC) as a Lesson for Future Recovery," Energies, MDPI, vol. 15(10), pages 1-15, May.
    7. Xu, Jie & Lv, Tao & Hou, Xiaoran & Deng, Xu & Li, Na & Liu, Feng, 2022. "Spatiotemporal characteristics and influencing factors of renewable energy production in China: A spatial econometric analysis," Energy Economics, Elsevier, vol. 116(C).
    8. Alemzero, David & Acheampong, Theophilus & Huaping, Sun, 2021. "Prospects of wind energy deployment in Africa: Technical and economic analysis," Renewable Energy, Elsevier, vol. 179(C), pages 652-666.
    9. Grafström, Jonas & Poudineh, Rahmat, 2023. "No evidence of counteracting policy effects on European solar power invention and diffusion," Energy Policy, Elsevier, vol. 172(C).
    10. 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).
    11. Nuñez-Jimenez, Alejandro & Knoeri, Christof & Hoppmann, Joern & Hoffmann, Volker H., 2022. "Beyond innovation and deployment: Modeling the impact of technology-push and demand-pull policies in Germany's solar policy mix," Research Policy, Elsevier, vol. 51(10).
    12. Alina Ștefania Chenic & Alin Ioan Cretu & Adrian Burlacu & Nicolae Moroianu & Daniela Vîrjan & Dragos Huru & Mihaela Roberta Stanef-Puica & Vladimir Enachescu, 2022. "Logical Analysis on the Strategy for a Sustainable Transition of the World to Green Energy—2050. Smart Cities and Villages Coupled to Renewable Energy Sources with Low Carbon Footprint," Sustainability, MDPI, vol. 14(14), pages 1-30, July.
    13. Xin-gang, Zhao & Wei, Wang & Ling, Wu, 2021. "A dynamic analysis of research and development incentive on China's photovoltaic industry based on system dynamics model," Energy, Elsevier, vol. 233(C).
    14. Liu, Zhengguang & Guo, Zhiling & Chen, Qi & Song, Chenchen & Shang, Wenlong & Yuan, Meng & Zhang, Haoran, 2023. "A review of data-driven smart building-integrated photovoltaic systems: Challenges and objectives," Energy, Elsevier, vol. 263(PE).
    15. Jabir Ali Ouassou & Julian Straus & Marte Fodstad & Gunhild Reigstad & Ove Wolfgang, 2021. "Applying Endogenous Learning Models in Energy System Optimization," Energies, MDPI, vol. 14(16), pages 1-21, August.
    16. Hu, Xin & Chen, Fei & Zhang, Zhenhua, 2021. "Model construction and optical properties investigation for multi-sectioned compound parabolic concentrator with particle swarm optimization," Renewable Energy, Elsevier, vol. 179(C), pages 379-394.
    17. Luo, Shunjun & Zhang, Shaohui, 2022. "How R&D expenditure intermediate as a new determinants for low carbon energy transition in Belt and Road Initiative economies," Renewable Energy, Elsevier, vol. 197(C), pages 101-109.
    18. Jabir Ali Ouassou & Julian Straus & Marte Fodstad & Gunhild Reigstad & Ove Wolfgang, 2021. "Applying endogenous learning models in energy system optimization," Papers 2106.06373, arXiv.org.
    19. Grafström, Jonas & Poudineh, Rahmat, 2023. "Invention and Diffusion in the Solar Power Sector," Ratio Working Papers 364, The Ratio Institute.
    20. Song, Zhe & Liu, Jia & Yang, Hongxing, 2021. "Air pollution and soiling implications for solar photovoltaic power generation: A comprehensive review," Applied Energy, Elsevier, vol. 298(C).
    21. Gao, Yuan & Hu, Zehuan & Chen, Wei-An & Liu, Mingzhe, 2024. "Solutions to the insufficiency of label data in renewable energy forecasting: A comparative and integrative analysis of domain adaptation and fine-tuning," Energy, Elsevier, vol. 302(C).
    22. Gao, Yuan & Hu, Zehuan & Shi, Shanrui & Chen, Wei-An & Liu, Mingzhe, 2024. "Adversarial discriminative domain adaptation for solar radiation prediction: A cross-regional study for zero-label transfer learning in Japan," Applied Energy, Elsevier, vol. 359(C).

    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. Grafström, Jonas & Poudineh, Rahmat, 2023. "No evidence of counteracting policy effects on European solar power invention and diffusion," Energy Policy, Elsevier, vol. 172(C).
    2. Nuñez-Jimenez, Alejandro & Knoeri, Christof & Hoppmann, Joern & Hoffmann, Volker H., 2022. "Beyond innovation and deployment: Modeling the impact of technology-push and demand-pull policies in Germany's solar policy mix," Research Policy, Elsevier, vol. 51(10).
    3. Aalbers, Rob & Shestalova, Victoria & Kocsis, Viktória, 2013. "Innovation policy for directing technical change in the power sector," Energy Policy, Elsevier, vol. 63(C), pages 1240-1250.
    4. Paul Lehmann & Patrik Söderholm, 2018. "Can Technology-Specific Deployment Policies Be Cost-Effective? The Case of Renewable Energy Support Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 475-505, October.
    5. Kyunam Kim & Eunnyeong Heo & Yeonbae Kim, 2017. "Dynamic Policy Impacts on a Technological-Change System of Renewable Energy: An Empirical Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 205-236, February.
    6. Miremadi, I. & Saboohi, Y. & Arasti, M., 2019. "The influence of public R&D and knowledge spillovers on the development of renewable energy sources: The case of the Nordic countries," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 450-463.
    7. Bossink, Bart, 2020. "Learning strategies in sustainable energy demonstration projects: What organizations learn from sustainable energy demonstrations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    8. Grafström, Jonas & Lindman, Åsa, 2017. "Invention, innovation and diffusion in the European wind power sector," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 179-191.
    9. Elia, A. & Kamidelivand, M. & Rogan, F. & Ó Gallachóir, B., 2021. "Impacts of innovation on renewable energy technology cost reductions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    10. Grafström, Jonas & Poudineh, Rahmat, 2023. "Invention and Diffusion in the Solar Power Sector," Ratio Working Papers 364, The Ratio Institute.
    11. Libo Zhang & Qian Du & Dequn Zhou, 2021. "Grid Parity Analysis of China’s Centralized Photovoltaic Generation under Multiple Uncertainties," Energies, MDPI, vol. 14(7), pages 1-19, March.
    12. Lafond, François & Bailey, Aimee Gotway & Bakker, Jan David & Rebois, Dylan & Zadourian, Rubina & McSharry, Patrick & Farmer, J. Doyne, 2018. "How well do experience curves predict technological progress? A method for making distributional forecasts," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 104-117.
    13. Samadi, Sascha, 2018. "The experience curve theory and its application in the field of electricity generation technologies – A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2346-2364.
    14. Yeh, Sonia & Rubin, Edward S., 2012. "A review of uncertainties in technology experience curves," Energy Economics, Elsevier, vol. 34(3), pages 762-771.
    15. Newbery, David M., 2016. "Towards a green energy economy? The EU Energy Union’s transition to a low-carbon zero subsidy electricity system – Lessons from the UK’s Electricity Market Reform," Applied Energy, Elsevier, vol. 179(C), pages 1321-1330.
    16. Zou, Hongyang & Du, Huibin & Ren, Jingzheng & Sovacool, Benjamin K. & Zhang, Yongjie & Mao, Guozhu, 2017. "Market dynamics, innovation, and transition in China's solar photovoltaic (PV) industry: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 197-206.
    17. Schauf, Magnus & Schwenen, Sebastian, 2021. "Mills of progress grind slowly? Estimating learning rates for onshore wind energy," Energy Economics, Elsevier, vol. 104(C).
    18. Clement Bonnet, 2020. "Measuring Knowledge with Patent Data: an Application to Low Carbon Energy Technologies," Working Papers hal-02971680, HAL.
    19. Gianluca ORSATTI, 2019. "Public R&D and green knowledge diffusion:\r\nEvidence from patent citation data," Cahiers du GREThA (2007-2019) 2019-17, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    20. Shayegh, Soheil & Sanchez, Daniel L. & Caldeira, Ken, 2017. "Evaluating relative benefits of different types of R&D for clean energy technologies," Energy Policy, Elsevier, vol. 107(C), pages 532-538.

    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:rensus:v:124:y:2020:i:c:s1364032120300484. 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/wps/find/journaldescription.cws_home/600126/description#description .

    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.