Modeling the effect of subsidized pricing policy on new product diffusion

Abstract

This paper is concerned mainly with highlighting the potential applications of photovoltaics (PV) together with its perceived advantages and disadvantages in comparison to alternative conventional sources of energy for different applications in an OPEC country. A diffusion model is developed, calibrated and used to forecast PV demand for the residential sector. The model is used to rationalize government subsidized pricing decisions over time to accelerate PV market penetration.diffusion of innovation sensitivity analysis pricing policy photovoltaics