Understanding The Growth of Renewable Technology: The Development of the Norwegian Photovoltaic Innovation System

The current global economy is locked into energy systems based on fossil fuels, which blocks the development of renewable energy (RNE) sources. Dealing with climate change and the problems of greenhouse gas emissions (GHG) requires a transition to a low-carbon economy that could help the diffusion of sustainable energy sources such as RNE. Thus, accelerating the diffusion of RNE sources such as photovoltaic energy has been vital for policymakers. During the last two decades, governmental initiatives involving the diffusion of photovoltaic (PV) energy have led up to a global demand for wafers and silicon. Essentially, a photovoltaic industry emerged in Norway to serve a growing demand in the international PV market, which countries such as Japan, Germany, Spain and Italy are willing to subsidise. This thesis seeks to understand the emergence, development and diffusion of the Photovoltaic technology in Norway. The technological innovation system (TIS) framework has been employed in order to analyse innovation dynamic and the diffusion process of the system. Although, Norway’s access to hydropower and lack of PV incentives make it difficult to establish a domestic market, Norwegian companies have built up a significant expertise in PV technology; which covers all spectrum of the value chain. Several of these players are competing in the international market, and are involved in the manufacturing of wafers, silicon, solar cells and modules as well as PV installations. Moreover, a supplying industry with other services and products of the value chain including recycling of silicon, production automation and procurement management emerged to serve both national and international players. This industry has shown that access to (and efficient use of) raw materials and technological expertise are key ingredients for achieving competitive advantage. Norwegian actors operate in a highly competitive global market; currently dominated by low-cost countries such as China, Singapore and Taiwan. Over the last three years, several trends including a global surplus of manufacturing capacity, low production cost leading to module price reductions, the global financial crisis, improvements in production processes and technological advancements have shaped the growth of the Norwegian PV industry. Consequently, Norwegian actors are faced with unfavourable market conditions; leading to reduced production activities, closure of manufacturing plants, downsizing, consolidations, acquisitions and insolvencies. In order to remain competitive these players are expanding their portfolios by developing downstream activities and niche products, improving production processes in order to balance manufacturing costs and moving production to Asian continent