The International Adoption of Photovoltaic Energy Conversion Is Japan a Lead Market?


This paper explores on the basis of a case study on photovoltaic energy conversion (PV) whether countries can actively create a lead market for new technology. Solar energy conversion has fascinated people and politicians as an alternative to oil and nuclear energy. Since the discovery of photovoltaic cells that directly convert solar irradiation into electricity it is expected that the mass market for photovoltaic energy conversion will emerge soon. With lots of sunny, at and vacant regions and an electricity-hungry and high-income population, the United States looked to be the natural lead market for solar energy. Yet, two countries that are less favorably endowed with solar energy, Japan and Germany, embarked on establishing a mass market for solar energy conversion through high public subsidies. This paper discusses the prospect of these two countries to set off a bandwagon among all other nations? Reviewing the traditional mechanisms of the international diffusion of innovations, the tentative answer given in this paper is that while local markets have been created, this has not ensured the international success of PV. For its international success, it would be essential to demonstrate that the adoption of PV systems is continuing without subsidies. With the energy production cost of solar cells unlikely to come close to that of conventionally generated electricity in the foreseeable future, the United States looks like the test market for solar energy, where the fate of PV will be answered.

Keywords: Eco Innovations, International Diffusion, Photovoltaic

JEL Classification: L80, C53, F14, O31

Marian BEISE
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059