Marian Beise (Research Institute for Economics and Business Administration, Kobe University)
Abstract
This paper explores on the basis of a case study on photovoltaic energy conversion (PV) whether countries can actively create a lead market for new technology. Solar energy conversion has fascinated people and politicians as an alternative to oil and nuclear energy. Since the discovery of photovoltaic cells that directly convert solar irradiation into electricity it is expected that the mass market for photovoltaic energy conversion will emerge soon. With lots of sunny, at and vacant regions and an electricity-hungry and high-income population, the United States looked to be the natural lead market for solar energy. Yet, two countries that are less favorably endowed with solar energy, Japan and Germany, embarked on establishing a mass market for solar energy conversion through high public subsidies. This paper discusses the prospect of these two countries to set off a bandwagon among all other nations? Reviewing the traditional mechanisms of the international diffusion of innovations, the tentative answer given in this paper is that while local markets have been created, this has not ensured the international success of PV. For its international success, it would be essential to demonstrate that the adoption of PV systems is continuing without subsidies. With the energy production cost of solar cells unlikely to come close to that of conventionally generated electricity in the foreseeable future, the United States looks like the test market for solar energy, where the fate of PV will be answered.
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Publisher Info
Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number
153.
Find related papers by JEL classification: L80 - Industrial Organization - - Industry Studies: Services - - - General C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Other Model Applications F14 - International Economics - - Trade - - - Country and Industry Studies of Trade O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
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