System maturity matters! Understanding policy support to accelerate the diffusion of FEEB&D technologies

WP4: Market Diffusion and Implementation of Technologies

Today, energy-efficient technologies are widely available – both economically and ecologically superior – but they often fail to diffuse at the market. While the general topic of policy’s influence on innovation has been researched in various studies, the focus lies either on an earlier phase of the innovation process (the invention phase), or on a selected policy instrument or technology. Instead, we focus on technology-specific policy instruments (in contrast to general ones such as CO2 tax) to find the ones that allow to efficiently accelerate the market diffusion.

We conducted three case studies of successfully diffused energy efficient building technologies in Switzerland: heat pump, comfort ventilation, and low-e glazing. For these technologies, we evaluated the influence of individual policy instruments on their trajectories based on (i) the analysis of secondary/archival data, and (ii) semi-structured interviews with 21 different experts.

We find that the ideal mix and sequence of policy instruments depends on two things: First, the maturity of an innovation’s technological system, and second, its stage in the diffusion process (both being dynamic, see Figure 1). Based on our analysis, we identify three levels of system maturity:

  • Infantile: emphasis on specific instruments that address a technology’s system by increasing reliability and knowledge development to cope with quality issues (e.g. R&D grants, P&D projects)
  • Juvenile: shift towards instruments that trigger market demand (e.g. existing/well-established labels, financial subsidies) to create legitimacy for the innovation among potential customers.
  • Adult: primary focus on instruments that spur demand by regulatory influencing the market’s progress thus overcoming system inertia towards an incumbent technology (e.g. standards, norms).
Figure 1. Conceptual framework for efficient policy support in accelerating the diffusion of low-carbon innovations

 

Our findings highlight the importance of assessing the maturity stage of an innovation’s technological system and its diffusion status before designing policy intervention. Moreover, regular re-evaluation and adaption of policy instruments over time is required. Otherwise, a mismatching of instruments to innovations will cause inefficiencies, such as no or low diffusion, high policy costs, or technological lock-in.

For more information, please contact David Grosspietsch, ETH Zurich.