Quantifying the Impact of R&D on PV Project Financing Costs

David Feldman, Rebecca Jones-Albertus, Robert Margolis

Research output: Contribution to journalArticlepeer-review

8 Scopus Citations


Energy technology research and development (R&D) typically focuses on advancing the performance and reducing equipment and installation costs. However, such R&D can also have significant indirect impacts on other factors. Incorporating the impact that R&D activities have on financing costs can provide a more complete picture of the consequences of these decisions, and may allow policymakers to make better decisions. In this paper we discuss some historical examples of R&D impacting financing costs in the solar energy sector, summarize the areas of R&D that can impact financing, and describe methodological approaches that can be used to quantify the impact of R&D on financing costs and, as a result, the levelized cost of energy (LCOE). We estimate that R&D-driven reductions in financing costs in the solar sector, from current levels to low-risk levels, could reduce LCOE approximately 25%. Alternatively, without the R&D advances needed to prevent future risks and complications, financing costs in the solar sector could increase by as much as 115%.

Original languageAmerican English
Article number111525
Number of pages9
JournalEnergy Policy
StatePublished - 2020

Bibliographical note

Publisher Copyright:
© 2020 Elsevier Ltd

NREL Publication Number

  • NREL/JA-6A20-76611


  • Capital
  • Financial risk
  • Financing costs
  • R&D
  • Solar photovoltaic
  • Uncertainty assessment


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