The Role of Government Policy in the Development of Solar Photovoltaic Power

The document introduces a project by the Climate Policy Initiative (CPI) to analyze the impact of government policy on the development and cost reduction of solar photovoltaic (PV) technology. It identifies cost as the primary obstacle to PV's technical potential and proposes a four-step evaluation framework—linking objectives, activities, drivers, and policies—to assess policy effectiveness across the PV value chain. The briefing highlights key policy questions regarding the use of targeted versus broad-based tools, the interaction between local and national policies, and the role of capital markets in financing deployment.

• Cost is identified as the single most significant barrier preventing solar PV from reaching its technical potential, with some estimates suggesting costs must decrease by an additional 50% to 70% to be economically competitive for general applications.
• The document proposes a specific analytical framework to evaluate policy impact on long-term solar PV costs by breaking the problem into value chain segments and linking four elements: objectives (cost reduction), activities (such as research, manufacture, and installation), drivers (levers to improve performance), and the policies that impact those drivers.
• Different policy instruments impact cost reduction through different mechanisms: feed-in tariffs are noted for their influence on economies of scale and 'learning by doing,' while research grants are more likely to drive technological breakthroughs.
• The effectiveness of PV policies in China and Germany is noted to be dependent on the evaluation criteria used, as these countries have pursued the dual goals of national industrial development and clean technology progress.

APA

Nelson, D. (2011). The Role of Government Policy in the Development of Solar Photovoltaic Power. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-Government-in-PV-Power-Development.pdf

Chicago

Nelson, David. The Role of Government Policy in the Development of Solar Photovoltaic Power. Climate Policy Initiative, 2011. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-Government-in-PV-Power-Development.pdf.

Wikipedia

{{cite report |last1=Nelson |first1=David |title=The Role of Government Policy in the Development of Solar Photovoltaic Power |publisher=Climate Policy Initiative |date=31 May 2011 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-Government-in-PV-Power-Development.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nelson2011role, author = {Nelson, David}, title = {{The Role of Government Policy in the Development of Solar Photovoltaic Power}}, institution = {Climate Policy Initiative}, year = {2011}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/Role-of-Government-in-PV-Power-Development.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }