Holding Solar Energy Hostage? Evidences from the Political Economy of the Solar Photovoltaic Innovation System in Iran

Transformation of the energy system by leveraging renewable sources, promoted by the national government and international organizations for reducing greenhouse gases (GHGs), is an issue of high political and policy importance in Iran, an oil-rich developing country. In this regard, this paper explores the evolution of solar photovoltaic (PV) diffusion from 1990 to 2021 in Iran. We explain the stages of technological innovation system (TIS) evolution by cumulative causation loops while narrating PV diffusion through a historical case study. By adopting a qualitative methodology, we conducted semi-structured interviews with 26 PV experts, selected through the snowball technique, to collect data. By content analysis of gathered data, we identify four distinct periods of PV diffusion. Our findings show that research institutes' ambitions derived the attention to PV development that was subsequently intensified by the entrepreneurial activities of pioneering firms. Government agencies supported firm-level R&D activities that eventually led to the emergence and expansion of PV service and manufacturing firms. We also elaborate the decelerating effect of the political economy of Iran on PV diffusion, which is embedded in an oil-dependent energy sector. We scrutinize the effect of incumbent oil and gas actors, power of oil and gas actors, institutions at the energy sector level, and energy system infrastructure on PV diffusion. This paper contributes to the scholarly and policy understanding of renewable energy development and its eventual diffusion in developing oil- and gas-rich countries and notably in OPEC member states.