Capacity planning of solar PV manufacturing under Knightian uncertainty

Thibault Deletombe, Hyun-Jin Julie Yu and Patrice Geoffron
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Thibault Deletombe: TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay
Hyun-Jin Julie Yu: TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay
Patrice Geoffron: Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

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Abstract: In this paper, we investigate the trade-off between resiliency and competitiveness to propose a coherent supply strategy for solar PV in France. Such a dilemma is steered by various uncertainty sources (environmental, technological, market, etc.) that we cannot forecast objectively over the long term and whose probability measures are unknown. Therefore, we build a framework based on Knightian uncertainty to evaluate the different investment schemes and configurations for the supply of solar PV. In particular, three supply sources are considered: import, storage, and domestic manufacturing. Each investment scheme is assessed through its net present value in the different states of the world that occurs. In particular, the benefits of maintaining some domestic manufacturing capacity to foster innovation and pave the way for future competitiveness are taken into account.

Date: 2025-06-15
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Published in 46th IAEE International Conference 2025 - "Energy solutions for a sustainable and inclusive future", Jun 2025, Paris, France

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