Stacia Brocco
ECO/561
November 18, 2013
Peter Oburu, PhD. Economic Analysis of Solar Clean
The following economic analysis for Solar Clean provides a scorecard of internal conditions and external influences that outline potential benefits and disadvantages of the viability of this company. Through a detailed analysis of the market structure, elasticity of demand, finances, pricing strategies, and barriers to entry, informed decisions on future growth and viability of the company are accessible. Growth comes from a carefully planning and flawless strategic execution with the current data and analytics contained in the economic analysis of this business plan.
Market Structure
The market structure of the solar industry is an oligopoly. An oligopoly is a market run by a small number of firms that together control the majority of the market share. According to Solar Energy Reports, 2013, a total of 15 solar companies are manufacturers and are responsible for 58% of the market. With the ability to control production costs and manage the supply and demand, these are the most sustainable and profitable solar companies. “In 2009, the photovoltaic solar industry generated $38.5 billion in revenues globally, which includes … a market increase from $46.3 billion to $96.8 billion in 2014” (Solar Energy Reports, 2013, p. 3). Renewable and sustainable energy is a rising industry and the need constantly to increase the efficiency is crucial to its success.
To increase the efficiency of the solar panels, Solar Clean is a new service targeted to solar panel owners to clean and repair damage brought on by storms or customer interference.
Elasticity of Demand
Currently, in 2013, the solar industry is a “$77 billion solar-energy industry and is forecast to expand the most since 2011” (Roca, 2013, p. 6). The industry relies heavily on technology to gain and retain customers. Because technology improves the actual
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