MIT: Solar success chiefly due to economies of scale, public policies


The overall cost declines in solar PV have been determined by economies of scale and public policies. This is the main conclusion of a study, published by researchers at the U.S. Massachusetts Institute of Technology (MIT) in the journal Energy Policy, which examined the decisive factors in the success of the technology between 1980 and 2012.

The study's authors say technological improvements in PV components and manufacturing processes are low-level factors contributing to cost decreases. In total, they outline six low-level factors, each of which account for more than 10% of the overall drop in costs, while four are said to each represent at least a 15% decline.

“For about the last decade, however, the largest single high-level factor in the continuing cost decline has been economies of scale, as solar-cell and module manufacturing plants have become ever larger,” they write.

Furthermore, the team claims that, in terms of government support, public policies aimed at stimulating market growth accounted for roughly 60% of the overall cost declines, with government-funded R&D accounting for the remaining 40%.

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“For a long time there has been a debate about whether these policies work — were they really driving technological improvement? Now, we can not only answer that question, we can say by how much,” the researchers say.

They find that a virtuous cycle between public policies and technological improvement is key to the further development of solar across all markets. The potential in the latter is said to be considerable, and the industry is urged to continue working on alternative technologies to crystalline silicon. More gains may also be obtained by improving manufacturing processes.

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