57
Figure 7.2a: Cumulative solar PV installations compared to forecasts from various IEA World Energy Outlooks (WEO).
450 400 350
300 250 200 150 100 2006 50 0 2000 2005 2010 2015 Source: Updated from ClimateWorks et al. (2015). 2020 2025 2030 2017 2016 WEO 2017
WEO 2006 WEO 2008 WEO 2009 WEO 2010 WEO 2011 WEO 2012 WEO 2013 WEO 2014 WEO 2015 WEO 2016
Actuals 2015 2014 2013
Figure 7.2b: Historical price reductions and annual installations, 1975–2017.
100 120
2012
2009 2011
2008 2010
20 40 60 80
0 1975 1985
0.0 1.0 2.0 3.0
2010 2015 2017
Sources: Earth Policy Institute (2018) and Barbose et al. (2018, Fig. 13) for prices, Earth Policy Institute and IRENA (2018) for capacity.
1995 2005 2017
Annual Capacity Additions Solar PV Module Cost
20 40 60 80 100
KfW, boosted German renewable energy deployment by providing strategic fi nance in the form of concessional loans in 2009. In that year, Germany almost doubled its cumulative PV capacity to 10 GW and 41 percent of all projects benefi ted from KfW loans (Bickel and Kelm, 2010). The next three years saw unprecedented growth in German PV capacity, which slowed only when the feed- in tariff was reduced in 2012.
The baton of PV leadership then passed to China, whose companies have been manufacturing more than half of global PV cells every year since 2011 (Zhang and Gallagher, 2016). In the 2000s, Chinese manufacturers benefi ted from the generous demand-pull policies in richer countries (especially in Germany, Italy, Spain and the US), while transferring technology and vertically integrating production processes in China and benefi ting from fi nancial support from local governments (Zhang and Gallagher, 2016). In 2011, a feed-in tariff created a major market for PV also within China itself, while the Chinese SIB, China Development Bank, disbursed generous credit lines to Chinese manufacturers (Quitzow, 2015).
Against the backdrop of this comprehensive network of policies across the innovation landscape, solar PV is now nearing cost-competitiveness with electricity from fossil fuels and is being deployed around the world. The story of PV innovation is an international one: from the USA
and Japan to Germany and then China and increasingly other countries. Yet, what is a success today looked less certain and faced many obstacles in the early stages, revealing the importance of public policies for PV innovation and market creation along the lines examined in the previous section. The next section discusses some common barriers to implementing innovation policy.
7.4 Barriers to implementing innovation policy
7.4.1 Organizational aims and mandates The above-mentioned innovation policies recognize the institutions that plan and carry out the various polices as being key to their success. Unlike most public organizations and their fear of failure, the US energy innovation agency (ARPA-E) measures its success by how many risks it is willing to take and the impact of its successes (Mazzucato and Penna, 2015a). Nevertheless, most public organisations are risk averse, so it is important to learn from the US energy innovation agency’s (ARPA-E) approach in terms of paying attention to the internal capabilities of public institutions: their willingness to set bold missions and nurture organizational capacity and experimentation, and their ability to evaluate themselves in dynamic ways, rather than by static cost-benefi t analysis (Kattel and
Gigawatt
2017 US$/Watt
Gigawatt
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