DOI
10.1016/j.rser.2016.06.061

Summary
This study is concerned with the rapidly growing of the Chinese PV industry and its impact on the global PV industry. The methods in this research include the application of the Technological Innovation Systems (TIS) approach while also taking the context of the Chinese National Innovation System (NIS) and global PV TIS. The research also details the historical growth of PV in China.

The global PV market has been growing on average 50% per annum. In terms of energy produced, solar PV has reached 100 TWh meaning power is being delivered to approximately 30 million European households. Increasing markets have been primarily attributed to the reduction of production costs. This reduction in cost has been identified as beneficial to the consumers and governments but has been curtailing companies in their profit and success. Germany’s renewable energy policy was criticised for falling short of expectations while China was somewhat blamed for this shortcoming. This subsequently resulted in trade restrictions on PV from China.

Some factors identified as drivers for Chinese market success are as follows:

The great demand for global markets.
Influence from overseas markets.
Various policies and measures from the Chinese government.
Zhang et al. found that china’s top policy objective is to develop the renewable energy industry.
The Chinese government aim to develop an environment for PV power technology to develop.

Historical factors that influenced market success:

The invention of silicon single crystal in 1958 was a catalytic moment which resulted in the first production of solar cells aimed to be used in satellite technology.
Encouragement of privately owned entrepreneurial activity.
The purchase of U.S and Canadian PV firms.
The Kyoto Protocol.
China joined the WTO.
2004 saw new policies and acts in Europe which drove demand and as a result encouraged China to produce more PV cells.
Shortage of solar-grade polycrystalline silicon led to the Chinese semi-conductor industry making machinery adjustments to cater of the silicon production.
The ‘Renewable Energy Act’ was issued in China which demanded ‘compulsory grid connection and full purchase of renewable energy’.
Post economic crisis in 2009 was met with government investment in public expenditure aiming market demand stimulation.
The Chinese PV industry alliance was developed and 22 PV manufacturers were involved which reinforced lobbying for PV and renewable energy policies.
In 2011, a feed-in-tariff (FIT) for PV generation was developed which was seen as a milestone for PV in China.

In comparison with the foreign PV market, China is still in its infancy stage but signs of development point towards an eventual mature PV innovation system. The external factors influencing PV success were greatly enhanced by China’s internal factors

 

Relevance for Complex Systems Knowledge
This study is firstly relevant to energy systems knowledge and is also relevant to sustainable development knowledge. The emergence of the Chinese PV has been instrumental towards contributing pioneering technology at low prices for the global market but has also caused an issue with profit margins in the production process elsewhere.

China used learnings from successful European projects and implemented the best of knowledge into their production. The Chinese government has played a huge role in entrepreneurial support and alliance development for PV production and use.

This study utilises the TIS approach, common to almost all energy systems analysis studies. Huang et al. have produced a publication which outline the particular successes China has experienced which may be used as a case study for other organisations or researchers.




TIS is described here as ‘TIS approach views innovation as a collective activity and analyses how innovations are developed and deployed through the complex interactions among a multitude of different actors and organisations that are enabled and constrained by physical artifacts as by institutions that are regarded as ‘the rules of the game’ ‘.




Huang et al. summarises the factors of external influence to the Chinese PV TIS. (1) Changing economic policy to enable private enterprise, (2) technological transfer from western countries to China and (3) the large European market for PV in combination with ‘turn-key’ production lines played a huge role. In terms of internal factors, China exceeded from (1) expectation of profit from obvious enterprise opportunities, (2) long-term future of renewable technology was well highlighted by the Chinese government, (3) need for local employment drove industrial opportunities and (4) the flexibility of in-situ production lines to re-align machinery towards PV technology production.

Point of Strength
The paper highlights the important issues regarding low market price and production cost margins for profit.

Huang et al. adopted the use of Hekkert et al.’s seven system functions which is seen in use for many other TIS studies.

The study depicts a successful innovation systems project but also points towards reasons for market stagnation and the issues related to the varying economies and social system differences between China and the west.

The paper highlights that it is highly valuable to take multiple context factors into account in the terms of theory development which has been a direct answer to calls for these studies to be researched. Furthermore, the inclusion of visual aids for TIS and systems analysis have been included in this study which has been called for by multiple other papers on TIS.