Simulating Socio-Technical Transitions of Photovoltaics Using Empirically Based Hybrid Simulation-Optimization Approach

Abstract

Energy transitions as socio-technical processes involves interactions among different actors such as households, firms, and government, thus requiring an integrated approach to explore the transition’s dynamics. The present study aims to simulate the socio-technical transitions of photovoltaics (PV) in Indonesia using an empirically based hybrid simulation-optimization model. The model involves households’ decision-making, PV supply chain, and government interventions. The hybrid simulation-optimization model consists of integer linear programming to optimize PV’s supply chain configuration which was embedded within agent-based modeling and simulation (ABM). The empirical data involving 413 households from 34 provinces in Indonesia was acquired from a survey that was specifically designed based on the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) to specify and parameterize the model. Export tariff regulation, incentives for PV investment, environmental campaigns, and the combinations of those interventions were evaluated. The findings demonstrate that all of the interventions increase the intention toward PV, but the intention is not necessarily translated into adoption due to either financial or facility constraints. The findings highlight the necessity to include both demand and supply aspects endogenously in the transition model. The export tariffs combined with the incentives, followed by the export tariffs combined with the campaigns, is found to be preferable due to low supply chain unit cost and high reduction of greenhouse gas. Managerial implications and future research are discussed.