Understanding innovation system build up: The rise and fall of the Dutch PV Innovation System

Renewable energy technologies have a hard time to break through in the existing energy regime. In this paper we focus on analysing the mechanisms behind this problematic technology diffusion. We take the theoretical perspective of innovation system dynamics and apply this to photovoltaic solar energy technology (PV) in the Netherlands. The reason for this is that there is a long history of policy efforts in The Netherlands to stimulate PV but results in terms of diffusion of PV panels is disappointingly low, which clearly constitutes a case of slow diffusion. The history of the development of the PV innovation system is analysed in terms of seven key processes that are essential for the build up of innovation systems. We show that the processes related to knowledge development are very stable but that large fluctuations are present in the processes related to ‘guidance of the search’ and ‘market formation’. Surprisingly, entrepreneurial activities are not too much affected by fluctuating market formation activities. We relate this to market formation in neighbouring countries and discuss the theoretical implications for the technological innovation system framework.