Civil Engineering Reference
In-Depth Information
FIGURE 16-10
S-shape growth and maturity of new products.
16.5
Market Penetration
With all market forces combined and working freely, the penetration of a
new technology over a period of time takes the form of an s-shaped curve
shown in
Figure 16-10
.
It is characterized by a slow initial rise, followed by
a period of more rapid growth, tapering off to a saturation plateau and finally
declining to make room for a newer technology. The s-shape hypothesis is
strongly supported by empirical evidences.
One model available for predicting the market penetration of a new prod-
uct is the diffusion model proposed by Bass.
However, it can be argued that
the renewable energy is not a really new product. It merely substitutes an
existing product on a one-to-one basis. The Bass model, therefore, may not
be an appropriate model for the renewable power. Since electricity is a basic
need of the society, the penetration of renewable power technologies is better
compared with similar substitutions in the past, such as in the steel making
industry as shown in
Figure 16-11
.
The solid lines are the actual penetration
rates seen in those industries.
With ongoing developments in the wind and pv power technology and
with adjustments in social attitudes, the market penetration rate may follow
the line parallel to the historical experience on similar products depicted in
Figure 16-11
.
It can be analytically represented by the Fisher and Pry substi-
tution model.
2
In this model, the rate at which the wind and pv energy may
penetrate the market can be expressed as a fraction of the total MWh energy
consumed every year.
3
