The policy effect on photovoltaic technology innovation with regional heterogeneity in China

Abstract

This paper examines the policy effect on photovoltaic technology innovation by considering regional heterogeneity. We first evaluated regional heterogeneity by using a range-adjusted measure model, based on which a total of 238 prefecture-level cities in China were classified into four categories. The impact of supply-side, environmental-side, and demand-side policy instruments on PV technology innovation were assessed for each type of cities. The results show significant differences in the policy effects across different types of cities. Specifically, only the direct government subsidy in the supply-side and the feed-in tariff in the environmental-side had a clear incentive for PV technology innovation in all type of cities. The non-direct subsidy instruments in the supply-side were not conducive to PV technology innovation in cities with low levels of economic development and innovation capacity. In addition, the environmental-side regulatory policy instrument favored PV technology innovation in cities with high levels of economic development, population size, and innovation capacity, but goal-oriented instrument had the opposite effect. Moreover, the government purchase in the demand-side had a significantly positive effect on technology innovation in cities with abundant solar energy resources, and average levels of economic development and innovation capacity.