An innovation system perspective on the drivers of soft cost reduction for photovoltaic deployment: The case of Germany

Previous studies about the trends and sources of PV soft cost reduction have only offered a limited understanding of systemic aspects that drive this development. Drawing on concepts of sectoral innovation system theory, this study analyzes the evolution of the German PV sectoral system since the early 1990s, focusing specifically on key processes associated with the deployment of building-sited PV systems. The findings from the analysis suggest that soft cost reductions have been the result of numerous processes, including demand and market expansion, interactions across various agents, knowledge generation and learning, diversity creation and selection, and development of the institutional context. This paper offers a novel application of the sectoral innovation system concept in order to investigate incremental innovations and associated cost reductions that occur in the deployment of new energy technologies. For policymakers and other practitioners, the study offers new insights on how to support various processes that can enable (soft) cost reductions.