Learning-by-Doing in Solar Photovoltaic Installations
67 Pages Posted: 20 Oct 2013 Last revised: 5 Apr 2019
Date Written: February 19, 2019
The solar photovoltaic (PV) industry in the United States has been the recipient of billions of dollars of subsidies, motivated both by environmental externalities and spillovers across firms from learning-by-doing (LBD) in the installation of the technology. Using a dynamic model of demand and supply, this paper investigates installation cost reductions due to localized LBD using comprehensive data on all solar PV installations in California between 2002 to 2012, during a stage of initial growth of the PV market. We find that appropriable LBD can explain a decline in non-hardware costs of around 12 cents per watt, but we find evidence of only very small learning spillovers. This suggests that the California incentives are difficult to justify on shortrun economic efficiency grounds.
Keywords: learning-by-doing, innovation, imperfect competition, diffusion, new technology, energy policy
JEL Classification: Q42, Q48, L13, L25, O33, O25
Suggested Citation: Suggested Citation