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Econ 545 - Business Economics Project 1

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BUSINESS PLAN: SOLAR PANELS INSTALLATION
SITUATION B

Report of Project 1 – Microeconomic Analysis

Keller School of Management – DeVry University
ECON 545 – BUSINESS ECONOMICS
Prof. John Hinrichs

January 28, 2015 1. Introduction

This is a business report to evaluate the profitability and success of starting a contracting company for installing solar panels in 2015. The report was asked by Miss Cindy B. and it’s purpose is solely to provide Miss Cindy B. the most detailed and informed advice possible.

In order to contextualize the type of business Miss Cindy B. wants to begin, the article “US boosts ‘game-changer’ solar technology in bid for global market share” – page 374 of the textbook – was studied and will be cited several times during this paper.

Industry Overview
The solar energy industry is growing in America, as can be seen by the increase in global demand for solar cells. The US Department of Energy is investing hard on the industry, offering over $12 billion dollars in loans to solar projects.
A particular company called 1366 Technologies received a $150 million loan guarantee due to it’s new technology that promises to reduce drastically the costs of production of wafers for solar cells. Studies show that ‘1366’s machines simplify the traditional manufacturing process into one step, slashing costs by more than half. That’s important, since silicon wafers account for about 40 percent of the cost of today’s solar panels, and manufacturers are hungry for even tiny cost reductions.’ (http://www.technologyreview.com/featuredstory/524551/solar-survivor/)
Right now the solar power industry can only exist and be competitive due to government subsidies. The main goal is to reduce costs to as lower as possible, in order to see the industry survive on it’s own feet and be able to have a competitive price when compared to other sources

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