The Influence of Raw Material Prices on the Diffusion of Renewable Energy Technologies

Currently, there are several approaches trying to explain the diffusion of renewable energy technologies (RET). The most commonly used instruments in this respect are learning and experience curves; followed by further economic, policy and barrier analyses. In order to obtain a more comprehensive understanding, additional influence factors on RET diffusion need to be studied. We will contribute to research on RET diffusion by adding the raw material price perspective. As raw material prices account for a large share of the cost of energy, they are an important competitive factor for diffusion. In addition, latest rises and volatilities of raw material prices are subject of major relevance in academia as well as in industry. Based on the verified influence of raw material prices on the diffusion of hydrogen storage technologies [48], we now picture their influence on RET diffusion. The technological focus of our paper is on emerging renewable technologies for electricity generation, namely wind and solar power. Using regression analysis, we find evidence for the impact of energy commodity prices on RET diffusion. Academically, our results contribute to a better understanding of the drivers and barriers of RET diffusion and enable deducing recommended procedures for practitioners.