A paradox regarding economic support to deploy renewable energy technologies

From an economic viewpoint, a larger reduction in the level of economic support to facilitate renewable energy installations, e.g., the purchase price of renewable electricity under a feed-in tariff scheme, is not necessarily rational in accordance with a larger decline in the observed cost of the installation, if the expected cost decline of the renewable technology is to be revised in response to the newest statistical data observed during each passing time period. This paper demonstrates this point through an analysis of a case of Japanese photovoltaic power generation deployment.