Poster Paper: The Role of Knowledge Spillover in Distributed Generation Soft Costs

Saturday, November 10, 2018
Exhibit Hall C - Exhibit Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Erik Funkhouser, Ariane Beck, Doug Hannah and Varun Rai, University of Texas, Austin


Sustained U.S. solar photovoltaic (PV) demand and supply-side policies, in concert with efforts across the world, have led to significant improvements in the cost of solar PV hardware. As a result, the installed cost of solar PV has declined. Recently, attention has turned to non-hardware “soft” costs, which have remained stubbornly high, and now makeup a disproportionately high share of residential solar PV costs compared to a decade ago. Lack of innovation in soft cost reducing technologies (including processes), owing in part to insufficient learning-by-doing (LBD) spillover, is responsible for a large degree of the inflated proportion they make up in the installed price of solar PV. Policy support can leverage spillover to address soft costs and reduce barriers to productive knowledge spillover, but first better understanding of solar sector spillover mechanisms is needed.

In this paper, we combine the results of two distinct research processes to generate insights about solar sector soft costs. One process developed an original ontology, systematically and semantically organizing the soft cost knowledge domain, leveraging concepts from more than 185 relevant studies and market reports. The ontology provides a robust structure, ordering the relationships, interactions, knowledge flows, and learning processes between actors in the soft cost ecosystem.

The second process cultivated roughly a dozen case studies developed from approximately 70 interviews. The cases are divided between two groups; the first a subset of residential solar PV installation firms varying in size, and the second a subset of firms and organizations that provide support or intermediary services to residential installers (e.g., distributors, SaaS providers, local and national non-profits or trade organizations). The cases studies provide in-depth insights around firm processes, and addresses a number of issues related specifically to spillover:

  1. What leads to specific changes in technologies or processes? What motivates these changes?
  2. How do firms learn how to execute the main functions?
  3. Who are the important sources of knowledge in the solar industry?
  4. How do non-installer firms in the solar sector understand the pain points of installers? How are lessons from market intelligence integrated into firm processes or offerings?
  5. How is knowledge used to forge relationships between firms within the solar sectors? What value propositions most commonly promulgate these relationships?

By tying together lessons from both research streams, within the robust context of the ontology, we are able to glean deep insights about knowledge spillover mechanisms, including how they contribute to soft cost reduction, which firms (typologically) are party to spillover mechanisms, which firms are sources of knowledge, and the means by which knowledge flows.