Does international trade affect the price of solar PV modules?

The obtained results reveal that international trade causes a significant decline in the price of solar PV modules. In addition, the empirical analysis confirms that other well-known factors such as government policies, market development and technological development are also driving down prices.

What are solar PV module prices?

Solar PV module prices refer to the cost of the PV modules. Population density, the political stability index, renewable energy consumption and per capita carbon dioxide emissions series are all obtained from the World Bank (WB). Real GDP per capita series is taken from Federal Reserve Bank of St. Louis (FRED).

What happens if new countries join the global solar PV market?

When new countries join the global solar PV market, the total production capacity scales up, implying an increase of the global supply of solar PV panels, which exceeds the global demand and subsequently lowers the final price for such products in all global markets (Kirkegaard et al., 2010).

Why are solar PV module prices declining?

The study reveals several other important findings. Market and technological development are key factors explaining the decline in solar PV module prices. Moreover, government policies such as public budget for R&D in PV and feed-in tariff for solar PV are effective in reducing the price of solar PV modules.

Does a 1% increase in imports affect solar PV module prices?

However, the coefficient in absolute value is lower than unity, meaning that the model satisfies the stability condition. The empirical analysis reveals that a 1% increase in imports of solar PV cells and modules is associated with a 0.1% decline in solar PV module prices on average, all other things being equal.

Which countries dominate the global solar PV market?

The global solar PV industry is dominated by the key markets such as Germany, China, Japan and the United States (Kirkegaard et al., 2010). China has become the leading producer and player in the global solar PV market since 2010, with a substantial share of global trade (Algieri, Aquino, & Succurro, 2011).