Past studies on technological innovation system (TIS) were conducted to address the process and challenges of development and diffusion of renewable energy technologies, mainly in the context of developed countries. In this study, we classified TIS into R&D-based TIS and diffusion-based TIS and empirically investigated the formation of diffusion-based solar photovoltaic (PV) TIS in the context of a developing country. Based on historical event analysis, the study showed how the accumulation of system functions influenced the diffusion of PV technology and establishment of local solar PV industry in Ethiopia. Our case study sheds more light on the wider application of TIS framework in a context out of which it was born. The study recommends a policy intervention in building strong TIS for faster diffusion and further development of solar PV systems in Ethiopia and other developing economies.