A Performance Evaluation Model Using FAHP/DEA and the Malmquist Productivity Index to Assess the Photovoltaics Industry in Taiwan

With the depletion of fossil fuels and public consciousness of environmental degradation, the use of renewable energy resources has become a must in order to meet consistently increasing global energy demands. Solar energy is a promising renewable energy source that can be generated from the infinite sunlight resource with environmental sustainability and high safety standards. Nevertheless, the development of the photovoltaics (PV) industry still faces some obstacles, such as a versatile market cycle in response to economic conditions and high production costs with low conversion efficiency. Therefore, finding ways to strengthen their competitiveness is important in order for PV companies to survive and acquire decent profits in this new market. This research proposes a performance evaluation framework of firms in the PV industry. A fuzzy analytic hierarchy process (FAHP) is applied to set the assurance region of the factors, and then data envelopment analysis (DEA) is carried out to assess the business performance of the PV firms. Next, the Malmquist productivity index (MPI) is applied to evaluate the changes in efficiency of each firm over time. Based on the analysis, the firms can understand their current positions in the market and can gain a clear idea of how to improve their business.