Solar Panel Essay

1915 Words Jun 12th, 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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When the business is at its peak solar panels helps the economy as it decrease the unemployment rate and jobs are created.

“The graph above charts the inflation adjusted price of different types of energy, not in terms of gallons, but in terms of gigajoules of energy (a gigajoule is one billion Joules, the standard metric unit for energy). Pricing energy commodities in terms of their energy content makes it easier to compare the relative cost of different sources of energy.” (McConnell) Unemployment and inflation goes hand in hand so as unemployment rates decreases in high businesses of the solar industry, inflation rate decrease as well. Solar Panels industry however goes through cyclical unemployment so it does not affect inflation as much because jobs are not lost for long periods of time.
International trade is a strong factor in Solar Panel installation and China considered solar panels to be a commodities and was the first to invest in solar panels manufacturing. Now Solar Panels are an international business and more and more countries see its value. The U.S. and other countries benefit from international trading and have a comparative advantage, however, some do not see or reap the benefits. The U.S. has had issues with exporting of solar panels, and recently the U.S has challenged Indian government as they feel that Indian is

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