From a promising technological niche to an established market niche: Solar photovoltaic niche formation in Iran

• Published in: Energy for sustainable development 2023-06, Vol.74, p.50-65
• Main Authors: Fartash, Kiarash, Ghorbani, Amir
• Format: Article
• Language: English
• Subjects: energy; foreign direct investment; Government support; industrialization; Iran; issues and policy; Market niche; markets; Oil-Rich developing countries; renewable energy sources; Solar photovoltaic system; Strategic Niche Management; supply chain; sustainable development; tariffs; Technological niche
• ISSN: 0973-0826
• DOI: 10.1016/j.esd.2023.03.007

Transformation toward a low-carbon sustainable energy system is getting more recognition in oil-rich developing countries under pressure exerted by their growing environmental challenges and international treaties- including UN SDGs. This calls for concerted efforts for developing renewable energy technologies (RETs). In this regard, the current paper examines the historical development of the solar photovoltaic (PV) niche formation in Iran from 1990 to 2020 in two chronological phases, i.e., technological niches and market niches. We adopt strategic niche management framework and highlight the active role of government support should plays as a key prerequisite required for RET niches development in oil-rich developing countries (ORDCs) where market is heavily in favor of fossil sources of energy. Data was gathered through 19 semi-structured interviews as well as PV-related science and technology development activities. We found that while universities and research institutions played a pivotal role in PV technological niche formation, foreign direct investment (FDI) and local firms were instrumental in PV market niche development. Our findings provide recommendations to direct ORDCs in developing PV, which include proper implementation of feed-in tariff policy, enhanced collaboration among international and local actors, integrated and balanced development of the PV value chain, diversified application of PV in the residential and industrial sectors, and lastly, leveraging FDI and joint-ventures as means of promoting local technological capabilities, industrialization, and market expansion. •Renewable niches formation process entails two distinct technological and market phases.•Government support has explanatory power about how renewable niches form.•Government support is crucial for diffusion of renewable niches in oil-rich countries.•International collaborations and investment facilitate renewable niches formation.