Quantifying the cost savings of global solar PV and onshore wind markets

Abstract

Over the past decade, the capital costs of solar PV and onshore wind declined rapidly due to global markets. However, international renewable energy policies are pivoting towards national technology developments and productions. By considering the domestic components and international spillovers of experience and knowledge stock, this study develops the integrative learning curve model to investigate the mechanisms of solar PV and onshore wind technology cost developments in the United States, Germany, and China. The results show the importance of experience and knowledge spillover effects and stable public RD&D expenditures in technology cost developments. To quantify the historical and future cost savings of global solar PV and onshore wind markets, the national market scenario is defined as three countries implement nationalistic policies to reduce their dependence on global markets. By comparing estimated capital costs in global and national market scenarios, this study finds that experience and knowledge spillover effects from global markets save significant costs for three countries. Compared to China, the United States and Germany benefit relatively more from global markets due to higher unit cost savings. Finally, policy implications are proposed to guide global low-carbon energy transitions.