Abstract
A variety of factors, including government activities, have enabled over three orders of magnitude reduction in the cost of photovoltaics (PV) over the past six decades. No single determinant predominantly explains the improvement to date; R&D, economies of scale, learning by doing, and knowledge spillovers from other technologies have all played a role in reducing system costs. The observed cost reductions in PV are due to both incremental and nonincremental technical improvements. Although policy models have typically emphasized incremental changes, this chapter describes the prevalence of nonincremental changes. Informing the important policy decisions related to PV depends on the development of models that reliably characterize both types of change.