Third Generation Photovoltaic Technology and Industrial Developemnt: A Scenario Analysis

With the recent trends of tremendous energy demand growth, viable alternative renewablenergy sources have received great interest. Unprecedented demand in the photovoltaic (PV)arket resulted in shortages of key inputs. This led to above equilibrium prices and profit,hich in turn stimulated further investment. Current economic conditions have changed theompetitive landscape to one of que stionable further demand and profits, firms that produceirst generation PV are likely to suffer the most. Unlike the early 1980’s when energy priceseclined, PV development may have reached a sustainable level even without shortages ofossil fuels.he industry was until most recently in a period of high investment, resulting in muchnnovation. Due to technological advances and supply chain innovation, third generation PVhould be both more efficient than current technology as well as competitive with conventionalossil fuels. Silicon Valley startups (or any other firms that have viable third generationechnologies), will be able to use Asian ODM/EMS firms to move very quickly into this marketithout the significant cost of building capitally intensive capacity. Thus, small startups withimited capital can potentially create a paradigm shift in the energy industry.