PV1 : an interactive computer model to support commercialization policy for photovoltaics policy analysis

Abstract

The purpose of this report is the demonstrate the use of PVI as a policy analysis device. This analysis consists of the creation of a base case and the subsequent running of 50 additional cases to demonstrate the effects of changes in spending levels.

Acording to PV1, government policy to accelerate the commercialization of PV takes the form of spending in five areas: advertising, market development, subsidy, technology development and advanced research and development. Each of these spending areas, or policy options, has a unique effect on the acceptability of PV in the potential market, and on the price of PV. The effects of a particular policy are measured by using four policy criteria: the total number of KWp of PV installed after 8 years; the rate at which the market is being penetrated during those 8 years; the percent of total KWp installed after 8 years that orginates from the private sector; and the overall efficiency of the policy, as measured by the total cost of the policy divided by the total KWp installed.

The purpose of the 50 cases was to illustrate the sensitivity of the policy criteria to changes in the spending levels of the five policy options. Each of these cases is examined separately, and then the results were used to contrast multiple regression equations. The equations, one for each policy criterion as a dependent variable, have 50 cases and use the policy option spending levels as independent variables. These equations act as linear versions of PV1, and as such can help the policy maker to estimate the effects of various spending levels on the policy criteria for policies that are similar to the base case.

The most important conclusions involved subsidy and market development. It was found that both of these spending options would be most effective if they started at low levels and gradually increased over time. Compared to the base case, it was found that market development spending could be reduced and subsidy spending increased, thereby improving all of the policy criteria. In general, market development and subsidy spending should be coordinated.