Solar cells have the potential of contributing to a larger share of total energy production being based on renewable energy sources. The technology has several advantages, but despite these the increasing contribution to total energy production, and increased diffusion of technology, depends on the ability to compete with other energy sources. In order to become increasingly successful and competitive solar cells have to be produced at lower cost. This paper analysesthe economization efforts employed by the Norwegian solar cell industry. Moreover the paper is aimed at explaining the industry’s establishment process of becoming embedded within the national system of innovation. Due to path dependency issues the mode of production has a characteristic national flavour, which has made the industry highly competitive within a global growing sector. The paper argues that the establishment has depended on technology and knowledge bases originating within the systemic contexts of both the sectoral and thenational innovation system. The combination of path dependency and openness of the national innovation system to sectoral influence is seen as a decisive factor in explaining the establishment of the industry. I argue that the new combination of existing entities through learning processes results in technological and institutional change in the national system, which generates heterogeneity. By analysing the establishment of the Norwegian solar cell industry the paper argues that i) the Norwegian industry through its path dependency is becoming increasingly competitive ii) which leads to increased technological diffusion and iii) that the establishment contributes to growth within the national context.
Keywords: Solar Cells, Systemic Interaction, National Innovation Systems, Sectoral Innovation Systems, Path Dependency