Empirical Studies on Demand Pull in Photovoltaic Sector of Twenty Countries

Abstract

High cost impedes large-scale deployment of photovoltaics (PV), and the technical innovation is one of most important factors of cost reduction, so how to accelerate the market pull for innovation has practical significance and theoretical value. This paper aims to analyze PV demand pull mechanism based on empirical evidence. According to the features of PV industry and technical innovation theories, make hypotheses of PV market pull and the relationship between diffusion rates and the market pull. Then propose testing method of the market pull and the coefficients assessing diffusion rates, and use historical data of twenty countries to conduct empirical studies. The testing results show that 70% of PV market in the twenty countries pulled technical innovation; at the initial stage of PV diffusion, the market pull was insignificant when the market kept at small scale and the diffusion rate can be indicated by the innovation coefficient; in the acceleration period, the market pull was insignificant when the market grew steeply and the rate can be indicated by the imitating coefficient. So in order to encourage demand pull, policy making is suggested to lead the market growth stable and sustained.