Analysis of the Innovation Systems of Photovoltaic technologies in the Netherlands

Abstract

Environmental problems and the dependence on fossil fuels led to increasing interest in renewable energy sources. Photovoltaic (PV) technologies can convert the light emitted by the sun directly into electrical energy. Therefore PV technologies are very promising and the expectations are high worldwide. Compared to neighboring countries like Germany, the installed capacity of PV in the Netherlands is disappointingly low. This is striking considering the high expectations regarding PV. This means that there is still a lot to be changed and developed regarding these technologies. There are different PV technologies, each in a different phase of development and having different specs. Since PV technologies are emerging technologies, a lot can still change. It would be interesting to assess which of the PV technologies is playing or will play an important role in the way towards sustainable energy production in the Netherlands. To do the assessment, the following research question needs to be answered: “What factors of the Innovation System of PV technologies boost or hamper their development and diffusion in the Netherlands and how did that affect the competition between them? “. To answer that question the following technologies have been chosen: Crystalline silicon solar cells; thin film silicon solar cells; CIGS and CIS solar cells; CdTe solar cells; and organic solar cells. To analyze the factors that boost or hamper the development and diffusions of the technologies, their Technology Specific Innovation System (TSIS) is going to be analyzed. A TSIS is “a network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure or set of infrastructures and involved in the generation, diffusion and utilization of technology” (Carlsson & Stankiewicz, 1991). The TSIS will be analyzed using 7 Functions of Innovation Systems (FIS). Each of these functions assesses a part of the TSIS of the technologies. The functions are - Entrepreneurial activity [F1] - Knowledge development [F2] - Knowledge diffusion through networks [F3] - Guidance of the search [F4] - Market formation [F5] - Resource mobilization [F6] - Creation of legitimacy/ counteract resistance to change [F7] Indicators of each function are described in Table 2.1 in chapter 2. The interaction between the functions will then be analyzed using motors of innovation. These motors of innovation describe several vicious and virtuous cycles or a follow up of events that influenced the development and diffusion of the PV technologies. The research showed that most of the technologies showed so called motors of Science and Technology Push (STP). This motor of innovation is characterized by being dominated by the functions Knowledge development [F2], Knowledge diffusion through networks [F3], Guidance of the search [F4] and Resource mobilization [F6]. Entrepreneurial activities [F1] are weak or even absent. Only CdTe cells showed motors of decline or vicious cycles because the use of cadmium of prohibited when used in combination with some other materials. CdTe is the only technology on which no research is done in the Netherlands nor has there been any entrepreneurial activity, except for machine manufacturing. Not many entrepreneurial activities have led to the actual diffusion of solar cells in the Netherlands. Most entrepreneurial activities only boosted the knowledge developed within the country. Machine manufacturing companies are an example of these entrepreneurs. Entrepreneurial activity that leads to diffusion of the technology was only identified for crystalline silicon cells. These cells were first in being ready to be marketed. Between 1985 and 2003, a lot of demonstration projects took place. The EPR subsidy also encouraged users to acquire crystalline silicon PV systems. Therefore an Entrepreneurial motor was identified for crystalline silicon cells between 1985 and 2003. This is when an STP motor “evolves” and more entrepreneurial activity and demonstration projects take place. This would then improve the expectations regarding the technology. However, because the government was still hesitative and entrepreneurs were mostly focused on export, there was no steady subsidy scheme which was needed regarding the high costs of a PV system. This led to a downfall in demand and the Entrepreneurial motor fell back to a STP motor. Thin film silicon was researched almost as much as c-Si. Diffusion of this technology however did not take off. International disappointing results decreased the interest of investors in thin film silicon. This resulted in the closure of the only company involved in this technology, Helianthos. They had a pilot plant for years and never actually started large scale production. CIGS have not really been a subject of research very often. This was mostly because the technology used scarce materials. However the fast international developments regarding this technology led to more research activities and collaboration between Dutch players within the PV TSIS in the Netherlands. There are many actors with different skills, they are now bundling their knowledge to exploit the growing CIGS market. Organic PV is receiving a lot of attention from universities and research institutes. Especially polymer cells are profiting from the fast developments of organic electronics. Production has not taken off yet in the Netherlands because the technology still needs a lot of developments. Investors have therefore still not invested in any production plant. The government has not played a big role in determining which technology acquired the strongest TSIS. Subsidies and regulation were actually the same for each of the technologies. Technologies were researched at different universities and institutes, and if one started a research on a new technology they did not abandon their old research. The competition between the technologies was mostly the result of international factors. These are factors like international research results, availability of raw material and international demand. Entrepreneurs in the Netherlands were therefore mostly driven by export and investors also based their investment decisions on international factors. CdTe for example was not so popular in the Netherlands but internationally it is the most successful thin film technology. Therefore the slower developing thin film silicon in the Netherlands was not so interesting for investors. The analysis of TSIS using FIS was found to lack the attention to international factors. Even when considered their role seems being undermined because they are spread among different functions. This thesis therefore recommended collecting these international factors in a separate function. This function has a lot of influence on the other 7 functions of FIS but not the other way around.