The Relative Importance of Determinants of the Solar Photovoltaic Industry in China: Analyses by the Diamond Model and the Analytic Hierarchy Process

Abstract

Within China’s renewable energy industry, the importance of the solar photovoltaic industry has been increasingly recognized. Many Chinese provinces have adopted various measures to develop the solar photovoltaic industry. This study used the diamond model and the analytic hierarchy process to clarify the relative importance of the determinants of the development of the solar photovoltaic industry. A total of 22 determinants in six categories (i.e., factor condition; demand condition; firm strategy, structure, and rivalry; related and support industries; government; and chance) were analyzed. The results show that besides factor condition, demand condition and firm strategy, structure, and rivalry have also had a strong influence on the development of China’s photovoltaic industry. The findings also indicate that some traditional factors, such as labor costs and acquiring land, are very important to the development of the solar photovoltaic industry. The relative importance of the determinants clarified through this study provides a standard for the actions of policymakers and decision makers.