Solar Panel Essay

1938 Words Sep 6th, 2014 8 Pages
INTRODUCTION

When thinking of starting a contracting business for solar panels, many economic issues and concerns play a factor in the decision making process. Having a concern for the environment and knowing that solar panels have a cost saving for both households and business seems to be reason enough to start a business. However, before making such a financial investment you should first take a look solar panels in the economy in terms of (i) GDP growth rate, (ii) interest rates, (iii) level of unemployment, (iv) business cycle, (v) fiscal policy, (vi) monetary policy, (vii) international trade, and (viii) demographic.

RELEVENT ECONOMIC PRINCIPLES

Looking into macroeconomics issues when considering starting a Solar Panel
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To put that in perspective, the U.S had a record-breaking year in 2012 for solar installations with 3.2 gigawatts installed.” (Mattson, 2013) The solar panel industry can currently be looked at as a negative state as the market is over capacity with many entering the market. However, it is actually on an upswing as the increase of the entry to the market is a result of the low prices and the growth potential. As the government consider solar energy to be best choice of renewable energy. Also with many investors in the market like Warren Buffet who invest over 15 billion in the industry and take advantage of Invest Tax Credits that the government provides. The solar panels in its expansion phase of the business cycle we see the growth of employment and increase of income as more jobs are created for manufacturing solar plants and new emerging solar panel installation companies. All which are ways that jobs are created and more money is made and available for spending to help increase the economy. As the solar industry reaches it business peak which they are now entering, we now begin to see the over capacity drive the prices down in the market. After such phrase we begin to see the market weaken as companies are no longer making a profits in order to maintain. As a result of manufacturing slow down and jobs are lost.…