Comparing innovation systems for solar photovoltaics in the United Kingdom and in China

Abstract

Innovation in renewable energy sources (RES), such as solar photovoltaics (PV), can play an important part in CO2 reductions for climate change mitigation, as well as contributing to economic development. With a production capacity growing by more than 70% per year over the last 7 years, China is rapidly emerging as an important player in the global PV market, with significant levels of exports to Western European countries. The country's low labour cost combined with the potentially huge internal market should enable it to contribute to technology learning processes, driving down costs and increasing market diffusion. By comparison, though the UK aims to show global leadership in climate change policy, e.g. by setting a legally binding target to reduce CO2 emissions by 60% by 2050, it has been slow in developing either production capacity or markets for PV technology. By adopting a national innovation systems framework of analysis, the paper identifies the different technological and institutional actors and relations of the innovation systems for PV in the UK and in China, and assesses the extent to which these are likely to encourage or constrain the technological development and the market diffusion of this technology in the two countries. This novel effort to compare and contrast the innovation systems in the two countries combines information collected in both the UK and China and interviews with a sample of key actors in the PV sector. The comparison of the two countries’ innovation systems both unveils striking differences from which valuable policy lessons can be derived for the management of innovation in the energy sector and helps understanding of how such innovation could contribute to economic development.