Impact of RE policy on technology costs - PV system costs in Germany

The tremendous promotion of renewable energy technology (RET) deployment in Germany has entailed considerable costs and benefits. However, these costs and benefits accrue at different levels, are linked to different actors across time and making an assessment challenging. Especially, decreasing technology costs are considered as one major benefit of RET deployment and are used to argue for RET policy support. To capture these impacts, learning curves have been applied in many studies. Although learning curves include factors beyond demand, e.g. research and development, they ignore the interaction between demand and supply. This concept tends to include the impact of policies on demand and supply, and costs by applying a structural equation model. The results show that increased demand for PV modules increases prices while learning effects and large scale production decreases them.