Increasing the rate of solar cell diffusion in Japan: Dynamics of the PV innovation system, 1973–2007

Today, energy supply is the sector that accounts for the largest share of anthropogenic greenhouse gas emissions on a global scale. One of the actions that could contribute to a future stabilisation of the concentration of greenhouse gases in the atmosphere is thus structural change of the energy system towards a higher share of renewable energy. In order to overcome institutional barriers, develop the technology and create an initial market for renewables, public policies are needed. To design efficient policy instruments, one needs knowledge about what challenges face the growth of the new technology. One analytical framework that tries to capture and describe the most important inducement and blocking mechanisms in such a growth process is the technological innovation systems (TIS) approach. To understand, not only the structure of the system, but what goes on inside it, one can analyse what key processes influence the development, diffusion and use of the technology – the functional dynamics of the technological innovation system. This study is carried out as a master’s thesis at Chalmers University of Technology, and included a stay for three months as visiting researchers at the University of Tokyo. It uses the functional dynamics approach to analyse the Japanese solar cell (PV) innovation system in a historical perspective. The goal is to understand the diffusion of PV in Japan, and more specifically to identify the blocking mechanisms facing the innovation system today, hindering further diffusion of the technology. Key policy issues, related to the blocking mechanisms, will also be pointed out. To assess how well the system is performing, the German PV innovation system is used as a comparison and contrast. The analysis shows that the main differences between how PV has developed in Japan and Germany, is due to the difference in how nuclear power has developed and the effects of the involvement of environmental organisations, such as non-governmental organisations (NGOs) and political coalitions. Seven blocking mechanisms for diffusion of PV in Japan, ranging from the lack of clear targets and someone responsible for them to the fact that nuclear power often is seen as a contrast to renewables, were identified. Based on these, five policy issues were suggested, including official targets for PV diffusion and a long-term financial incentive for PV users