Source of Cost Reduction in Solar Photovoltaics

Unni Pillai and Kyle Cruz

MPRA Paper from University Library of Munich, Germany

Abstract: The price of solar panels has fallen rapidly over the last few decades. Using an extensive dataset of prices, costs, output, sales and technical characteristics of firms in the solar industry during 2005-2011, this paper investigates the factors that have contributed to the decline in costs and prices. While previous studies have attributed learning-by-doing and static scale economics as the main drivers of cost reduction, we find that these do not have any significant effect on cost once four other factors are taken into account, namely, (i) reduction in the cost of a principal raw material, (ii) increasing presence of solar panel manufacturers from China, (iii) technological innovations, and (iv) increase in investment at the industry level. Together, these suggest that innovations in the upstream industries that supply the solar panel industry with raw materials and capital equipment have been important drivers of technological progress in the solar panel industry.

Keywords: Solar; Photovoltaics; Technological Change; Learning (search for similar items in EconPapers)
JEL-codes: L6 O3 O30 Q40 Q42 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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