Panel: How to Design Effective Policies to Incentivize the Manufacturing and Deployment of Solar PV Modules: Lessons from the United States, China, and India
(Natural Resource Security, Energy and Environmental Policy)

Saturday, November 8, 2014: 8:30 AM-10:00 AM
Enchantment Ballroom D (Hyatt)

*Names in bold indicate Presenter

Panel Organizers:  Xiaojing Sun, Georgia Institute of Technology
Panel Chairs:  Rachel Krause, University of Kansas
Discussants:  Elizabeth Baldwin, University of Arizona

How Do China and India Develop Wind Energy? --Domestic Market, Innovation Strategy and Export
Di Xia1,2 and Kavita Surana1, (1)Harvard University, (2)Tsinghua University

Role of Incentives on Solar PV Adoption in the U.S
Daniel Matisoff, Georgia Institute of Technology

One of the more promising efforts to address climate change is through the development and deployment of inexpensive renewable energy, including solar energy. While the EU has been a leader in the deployment of renewable technologies, China, India, and U.S. States have begun to implement policies and programs targeted at accelerating solar photovoltaic (PV) deployment. This panel examines the policies implemented in large developed and developing counties that aim to promote the manufacturing and deployment of solar PV. Scholar 1 examines the impact of three strategies – government subsidies on capital and fixed costs, economies of scale, and investment in innovation – on the competitiveness of PV manufacturing firms. Using country level fixed effect models, she unpacks the production cost and market share of leading PV manufacturers in the United Sates and China. Her findings suggest that firms from the two countries engage in distinct development models. While Chinese firms gravitate towards using economies of scale in terms of manufacturing capacity expansion and supply chain development to reduce their production costs, American firms develop high performance PV products through large investment in R&D. Although government subsidies also play a role in shaping firms’ market competitiveness, this impact is less than suggested by previous literature. Nevertheless, government subsidies are crucial in incentivizing PV deployment. In their work examining the effectiveness of different solar promoting policy combinations, Scholar Group 2 aggregates a wide range of incentives to promote renewable energy, including Renewable Portfolio Standards, Net Metering Programs, and most uniquely, time and spatially variant Renewable Energy Credit trading data the total value of incentives aimed at promoting solar deployment. These incentives are associated with varying amounts of risk. By estimating the impact of solar subsidies and their risk profiles, their work provides insight into the consumer responsiveness to different types of solar incentives . Also investigating the deployment of solar PV, Scholar 3 looks at another country with great solar potential – India. He uses logit regression models to analyze two versions of Domestic Content Requirement (DCR) policy mandated by India’s National Solar Mission. The results show that although the weaker version of DCR promotes the domestic deployment of India-made crystalline silicon PV modules, the stronger version of DCR incentivizes the adoption of foreign-made thin film PV modules. The contradiction between the policy goal and final outcome suggests that the design of the policy needs to be more comprehensives in scope in order to prevent leakage. Through this panel, we hope to demonstrate the impact of different policies on solar PV manufacturing and deployment in developed country like the U.S. and large developing countries such as China and India. We also hope to shed light on policy design and suggest better ways to design policy tools that can accomplish policy goals in an effective and economically efficient way.