Macroeconomic Analysis of Solar Panel Industry

Macroeconomic Analysis of Solar Panel Industry

Introduction

This article provides the prospect of solar panel electric power generation industry, especially for the local part of the business that are to install the system. The solar panel industry mainly targets the installation in a small scale such as on a family house unlike other major power generation using coal, oil, hydraulic, or nuclear sources although the large scale solar panel power project plant using a vast land to place solar panels exit. The question is whether it is profitable to venture into the solar panel installation business which work as a contractor for the solar panel companies that manufactures, market and sell to the consumers who would like to install the panel at their home or building. The success of the business is basically dependent on the demand from people who want to install a solar system and the supply which involves the cost. All the hype about the environmentally friendly power generation technology seems to be able to maintain the decent level of demand for the next several years and the subsidy from the U.S. federal government to provide the incentives for installing solar panels should help keep this high demand. On the other hand, the consumption behavior of people can largely be influenced by the macroeconomic events in the current, future and expectations. This article of “postal service considering cutting 12,000 jobs” explains the current and future solar panel industry and offers the recommendation supported by economic theory and current economy and even introduces alternative opportunity (booming of the housing market) for those who are concerned about the environment and would like to make a contribution in the field.

Industry of Solar energy

At first, it is important to investigate the industry itself more deeply. Is the demand for the solar panel really expected to be held high enough to be worthy to invest? The nature of marketing the solar panel is that the consumer needs to put up a fairly large cost to install and ten or more years or so to finally realize the cost saving by decreasing the subsequent monthly electricity bill which they would be paying to the regional electric company. The system installation cost will become lower with the government subsidy which works as incentivizing the installation. However, if it is really beneficial and cost-saving, there is no need for a subsidy to give people incentive to purchase the product, and it will be very difficult to convince people to purchase a product that has so much uncertainty in finally yielding a benefit as long as ten years after for the price of a luxury vehicle.