Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 347: A review of problems associated with learning curves for solar and wind power technologies

Jonas Grafström () and Rahmat Poudineh
Additional contact information
Jonas Grafström: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Rahmat Poudineh: Oxford Institute for Energy Studies

Abstract: The learning curve concept, which relates historically observed reductions in the cost of a technology to the number of units produced or the capacity cumulatively installed, has been widely adopted to analyse the technological progress of renewable resources, such as solar PV and wind power, and to predict their future penetration. Learning curves were originally an empirical tool to evaluate learning-by-doing in manufacturing, and the jump to analysis of country-level technological change in renewable energy is an extension that requires careful consideration. This paper provides a review of the problems associated with learning curves for solar and wind power technologies. Issues such as whether the past cost reductions affect the future, learning curve specification problems, changing price ratios and econometric issues are discussed. Learning curves have a place in research, but there are several pitfalls that researchers should be careful not to overlook.

Keywords: learning curve; learning rate; energy technology; wind power; solar power

JEL-codes: E61; O32; Q20; Q58

28 pages, May 3, 2021

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