Elsevier

Applied Energy

Volume 115, 15 February 2014, Pages 429-437
Applied Energy

Strategic policy to select suitable intermediaries for innovation to promote PV solar energy industry in China

https://doi.org/10.1016/j.apenergy.2013.10.034Get rights and content

Highlights

  • China is under pressure to prosper the photovoltaic (PV) solar energy industry.

  • An interactive learning platform for knowledge management is essential.

  • The paper proposes some conceptual assumptions.

  • Suitable intermediaries at different stages of PV energy industry are found.

Abstract

Ever since its commitment to the Copenhagen Accord of 2009 to lower its carbon emissions by 2020 to a level that will be 40% below those of 2005, China has been aiming to develop its photovoltaic (PV) solar energy industry. Because knowledge is a critical factor for obtaining a sustainable competitive advantage in a knowledge-intensive industry, it is essential to build up an interactive learning and communicating platform as a facilitator to absorb, distribute and create knowledge within a firm and among its suppliers and customers. However, relevant literature has, hitherto, never discussed such an intermediary platform for innovation. Therefore, this paper proposes some conceptual assumptions to solve this problem. After a practical investigation, this paper seeks to find suitable intermediaries for innovation at different levels of the PV solar energy supply chain in China.

Introduction

As a result of an increase in environmental awareness and the support of governments, grid-connected photovoltaic (PV) solar power industry has grown rapidly to deal with emerging energy and environmental problems. The two major groups of PV solar cells are wafer-type cells and thin film cells. Wafer-type PV solar cells are made from wafers that are cut from a silicon ingot, while thin-film PV solar cells are deposited directly on a substrate like glass, plastic or steel [1]. Presently crystalline silicon is the most commonly used material. However, because PV silicon thin-film solar cells have a greater potential to reduce energy payback time, material use, production costs and energy consumption, such cells have become the main choice in the energy industry [2]. With the consistently growing demand for PV solar cell systems, an exponential growth in PV solar energy industry can be expected in the near future. In order to promote this emerging industry, it is necessary to consider the issue from the perspective of an integrated PV system to make PV energy industry economically acceptable [3]. An integrated PV system is an integration of a variety of parties including academic researchers, governments, system integrators and equipment suppliers with a mutual goal of supplying stable electricity by converting abundant sunlight. However, the use of PV solar energy has not been examined comprehensively due to the following reasons: (a) academic researchers have limited experience and data on PV solar energy industry; (b) many governments are not that desperate to encourage renewable energy at the present time; (c) system integrators prefer to adopt existing ordinary solutions to reduce the investment risk and the construction period; (d) equipment suppliers in different supply chains are often only interested in the equipment itself, and do not consider the perspective of an integrated system. For the purpose of solving aforementioned issues in a knowledge-intensive industry, it may be essential to build up an interactive learning and communicating platform as a facilitator to absorb, distribute and create knowledge within a firm and among suppliers and customers. Intermediaries for innovation, as facilitators, may connect demand and supply to support innovation to overcome market failures and system failures, and integrate different levels of systematic aggregation. Then, the target of this paper is to find suitable intermediaries for innovation to promote different levels of the PV solar energy supply chain in China.

Extensible capabilities in the semiconductor and flat panel display (FPD) industry, such as market, manufacture and global logistics, provide the basic infrastructures for developing the emerging industry in China. With the gradual cost reduction in semiconductors and FPDs, the consumer market of this emerging industry looks promising. On the supply side, the chemistry and process technologies in chip and FPD, including photolithography, deposition and etching, are directly applicable to mass producing PV solar cells. These companies can also employ their existing R&D experiences to improve and upgrade technologies for extensive solar technology development. The expansion of production is a result of booming investment in China. Manufacturing experiences and R&D experiences will give rise to learning curve effects and then result in the subsequent cost reduction in major PV solar products like solar cells, solar modules and solar systems [4]. Nevertheless, suppliers of major PV solar products must be flexible enough to customize their characteristics to satisfy individual demands and application requirements flexibly and to compete on price and performance [5]. To summarize, the economics of an integrated system or systematic application locally close to the users at the downstream supply chain must involve customer-oriented learning effects at the upstream supply chain [6]. In addition, China is aiming to hastily develop its PV energy industry because its current technologies are still behind many western nations like USA and those in Europe and its strategic policy is to reduce its carbon emission intensity by 2020 to a level that will be 40% below that of 2005 [7]. Accordingly, it will be helpful for a knowledge-intensive industry to build up an interactive learning platform to create, share and absorb knowledge within a firm or among its suppliers and customers.

Different people create, enrich, share and use knowledge in social interactions [8]. The majority of decision making occurs in groups, and motivation and action of individual members in an organization are affected by the social context [9]. Social networks are employed to obtain resources, knowledge, and information, and they can be used to explain personal relationships or personal ties [10]. Social networks are also recognized as an important intangible asset to facilitate innovative activities from the perspectives of individual positions, relations and operations [11], [12]. Previous studies have stressed that social networks are critical in a wide range of social contexts including inter-firm relations and intra-firm relations [13], family relations [14], and other social relationships [15]. Chen and Wang employed trust to modulate the relationships in social networks with innovative capability from the perspectives of external social networks and internal social networks [16]. Recently, Karamanos [17] examined the interaction between the alliance network structure in an industry (the macro-level) and the alliance portfolio structure in a firm (the micro-level). The results show that firms with exploratory activities have limited and indirect access to other firms (micro-level) and firms with exploitative activities have sustained and direct access to other firms (micro-level). In addition, when operating in dense industry alliance networks centralized by key firms, these effects are curvilinear (macro-level) [17].

Only a few previous studies have ever examined the learning effects as a result of social networks. Belderbos et al. [18] examined heterogeneities in the determinants of decisions of an innovating firm when engaging in R&D cooperation with four types of cooperation partners: competitors, suppliers, customers, and universities and research institutes. Shum and Watanabe [6] studied a local learning (innovation) model of solar photovoltaic deployment, and asserted that social learning processes between various actors may lead to better product innovation, process innovation, standardization, re-design, etc. Andersson et al. [19] studied relational embeddedness in external networks as a strategic resource for performance and competence development in multinational corporations, and proposed that a firm can access resources and capabilities outside of itself, including innovations. However, these studies have never discussed such an intermediary platform for innovation among actors through social networks [9], [20]. To address this shortcoming, the paper proposes some conceptual assumptions and carries out a practical investigation. The paper then summarizes suitable intermediaries for innovation at different levels in a supply chain in China.

The paper is divided into four sections as follows. The first section provides the introduction, and the second section describes the background of learning and communicating platforms. Section 3 proposes hypotheses and presents a proposed research methodology and then goes through data collection and research analysis. After an extensive discussion, final conclusions are provided in the last section.

Section snippets

Learning and communicating platforms

The rapid production expansion of PV solar energy products in China has been a result of booming investment. However, in order to fulfill the global market demand and confront the competitive environment, securing silicon supply, improving cell efficiency, and obtaining suitable equipment for mass production are significant tasks. There are downstream, midstream and upstream supply chains in this emerging industry. Some existing gaps and potential solutions are summarized in the following

Research methodology

As mentioned before, previous literature has never studied an intermediary platform for innovation among actors through social networks. Therefore, this research proposes some conceptual assumptions and investigates suitable intermediaries for innovation at different levels of a supply chain. The research focuses on the PV solar energy industry in China.

Discussion and conclusion

From a managerial point of view, the most suitable intermediaries for innovation should be viewed from a hierarchical structure, as shown in Fig. 6. In the first tier of intermediaries for innovation, systemic instruments for the support of innovation at a higher system level, located at the conceptual stage in the midstream supply chain, should provide the strongest guidance of strategic policies and facilitate the strongest transfer of core technologies, human resources and information flows

References (28)

  • M. Minutolo et al.

    An introduction to entrepreneurial separation to transfer technology programs

    J High Technol Manage Res

    (2011)
  • J. He et al.

    Techno-economic evaluation of thermo-chemical biomass-to-ethanol

    Appl Energy

    (2011)
  • R. Wiser et al.

    Analyzing historical cost trends in California’s market for customer-sited photovoltaic

    Prog Photovoltaic: Res Applic

    (2007)
  • A. Nagamatsu et al.

    Diffusion trajectory of self-propagating learning function to model photo-voltaics (PV) diffusion in Japan

    Energy Policy

    (2006)
  • Cited by (17)

    • Do government subsidies promote efficiency in technological innovation of China's photovoltaic enterprises?

      2020, Journal of Cleaner Production
      Citation Excerpt :

      Zhang and Gallagher (2016) reviewed how China fitted into the global solar PV innovation system, while Huang et al. (2016) analyzed how China became a leader in solar PV by the framework of Technological Innovation System (TIS). In the different development stages of the photovoltaic industry, Chen et al. (2014) found the suitable innovation intermediaries. It is easy to find that these are all based on a macro-level perspective.

    • Market dynamics, innovation, and transition in China's solar photovoltaic (PV) industry: A critical review

      2017, Renewable and Sustainable Energy Reviews
      Citation Excerpt :

      Currently, attracting investments and obtaining seed capital for PV enterprises have been problematic [22]. Obstacle of coal-fired power: the existing structure of power generation in China, which excessively relies on coal-fired power, is difficult to change in the short term [49], and coal is still desired, even by energy consumers [50]. In addition, the high cost and low technical efficiency hinder the mobilization of financial capital despite the implementation of subsidies by the Chinese government.

    • Government subsidies for the Chinese photovoltaic industry

      2016, Energy Policy
      Citation Excerpt :

      At the same time, in Netherlands, the United Kingdom (UK), China, Hong Kong and Indonesia, many researchers gave their reports on solar PV industry development and related policy in different fields, including development and policy of solar PV power, potential and cost-effectiveness of grid-connected solar PV, development potential of rooftop PV system and its environmental benefits, etc. (Peng and Lu, 2013; Sahoo and Shrimali, 2013; Verhees et al., 2013; Zhang et al., 2013; Veldhuis and Reinders 2013). From 2014 to 2015, as listed in Table 1, more researchers coming from different countries and regions reported their findings about PV industry, especially the governmental policy (Yuan et al., 2014; Michaela, 2013; Zhao et al., 2011, 2015, 2016; Wang et al., 2014; Verhees et al., 2013; Zhang et al., 2013, 2014; Veldhuis and Reinders, 2013; Chowdhury et al., 2014; Jung and Tyner, 2014; Chen et al., 2014; Lin et al., 2014; Kim and Kim, 2015; Watts et al., 2015; Shen and Luo, 2015; Gao et al., 2015; Sahu, 2015; Hansen et al., 2015; Chaianong and Pharino, 2015; Ouyang and Lin, 2014). For example, Wang et al.

    • Financing risks involved in distributed PV power generation in China and analysis of countermeasures

      2016, Renewable and Sustainable Energy Reviews
      Citation Excerpt :

      For example, in Zhejiang province, the power price of power grid companies dropped from RMB 0.457/kW h to RMB 0.4153/kW h, from 2014 to 2015 [33]. To solve the financial problems related to distributed PV power generation, China must lower financing risks to an acceptable level in laws and regulations, policies and management [34–36]. Different stimulus policies have varying effects on various stages of the distributed PV power generation industry [37,38] (see Table 11).

    • Suitable organization forms for knowledge management to attain sustainable competitive advantage in the renewable energy industry

      2015, Energy
      Citation Excerpt :

      Although some researchers have studied energy efficiency and energy policy in the Chinese renewable energy industry [3–5], relatively little attention has been paid to KM (knowledge management). In addition, among the works that have been done on the knowledge management, only few have examined learning effects through social learning network and intermediaries [6–8]. Actually, in a knowledge-intensive industry, knowledge is a critical factor for obtaining sustainable competitive advantage.

    View all citing articles on Scopus
    View full text