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Nanosolar Inc.

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Submitted By rajaram16
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Nanosolar, Inc. - Case Solution
Case Problem
Martin Roscheisen, CEO of Nanosolar must decide on the market they are going to focus, whether it’s Europe which has feed-in tariff plans with long term commitment (20 yrs) or jump-start into the nascent but high potential US market. The other problem plaguing him is the pricing and sales strategy to be employed. A low-pricing strategy is imperative for the US market as there are many players in it, as for Europe having a reliable pricing schedule- it’s all about pricing vis-a-vis its major competitor First Solar.
Sales Strategy
The major markets for Nanosolar is going to be Europe and US, and in the long-run they have to go for the emerging economies which promises immense potential. First Solar the major player in thin-film panel category is a major competitor and must be kept in mind while deciding on the strategy.
European Market
Germany
* Germany is having a stable pricing schedule, with feed-in tariff plan starting at $0.57/kWh (for free field systems) and $0.72/kWh (for residential) * It then declines at 6% annually, so assuming a 20 year commitment by the germen government we have a minimum price of $0.176/kWh in the 20th year * So the average price comes out to be $0.337/kWh * Profit is thus 0.261 ( assuming LCOE of $0.076/kWh without including the cost of capital) * With the total solar demand of Germany expected at 1.86 GW, there is enough potential in this market * In all, with a long-term commitment by the government this is a key market to be exploited in Europe
Spain
* Spain has a comparatively higher rates than Germany, but its capping is at 500MW which didn’t encourage many solar panel manufacturers * So a long term commitment from the Spanish government is imperative for Nanosolar to be profitable when producing for this market * The solar power demand is

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