The seeds of solar innovation : how a nation can grow a competitive advantage

Abstract

Over the past several years, the world has been inundated with stories which, when connected, describe an informal and disorganized race by many nations to establish a leadership position in capturing the economic rewards from the pressing need to clean up the worldwide energy supply. At the forefront of this race, is the competition to become the largest supplier of solar energy generation products and services. Many governments around the world are actively incentivizing and creating policy with the hope of constructing a competitive advantage within the solar industry. This thesis aims to provide the decision maker with a novel, objective, and cross-disciplinary perspective on the solar innovation system in the United States. The intention of this thesis is to encourage new ways of thinking about the solar innovation system and to inspire new approaches to effectively support its growth. This thesis presents recommendations to the decision maker at the Department of Energy (DOE) grounded in the underlying dynamics of solar innovation and the DOE's capacity to act. This thesis found that the driving force behind the evolution of solar innovation is a special type of firm which tends to start as an informal group or tribe within a professional environment. The special type firm, the solar innovation leading enterprise, is characterized by performing an in-depth analysis of the evolution of the solar industry in the U.S. over the past 20 years. The solar innovation leading enterprise is a type of firm that has demonstrated the ability to create a disproportionate amount of value for the solar innovation system. Not only has the solar innovation leading enterprise generated value, but it has spilled over enough value to incentivize the building of a broader set of regional capabilities which can be exported to the rest of the world. This thesis presents the ideal characteristics of the solar innovation leading enterprise and the dynamics which lead to its formation, growth, evolution, and sometimes to its creative destruction. The intricacies of how the solar innovation leading enterprise is born, how it evolves, what it requires to grow, and its dynamic relationship with the solar innovation cluster are presented and were derived by examining over 100 case studies in the solar industry. The current state of the competitive advantage of the U.S. is shown by presenting the status of the emerging and established regional solar innovation capabilities. Finally, a framework is constructed to guide the decision maker's actions. It presents the decision maker with ways to build the future competitive advantage of a nation now. The framework has its foundation in the underlying dynamics of solar innovation and characteristics of the solar innovation leading enterprise.