Tien Vo
Economics
Mr. Reuter
11 October 2015
The Power of Solar Power
The controversy over the issue of global warming and excessive use of nonrenewable resources has forced companies to think outside of the box, reach beyond normal conventions, and develop alternative ways of producing energy. Scarcity of fossil fuel resources -- such as coal, oil, and gasoline -- have inspired physicists, engineers, and innovators to create photovoltaic cells in order to harness energy from the sun and convert it into power. This video provides a brief synopsis of how PV solar cells work.
When solar panels first hit the market, the price outweighed the benefits of purchasing the cells and the solar power was not worth its trade-offs. Only wealthier consumers or people who were drawn to the idea of saving the environment bought the product when it was first introduced, due to the expense of the solar panels. Consumers also took into consideration that solar power was not substantial enough to completely replace the conventional sources of energy. Along with that, it can take up to 15 years for the solar panels to pay for themselves; the amount saved from an electrical bill does not add up to the cost of the panels quickly. However, this depends on the subsidies that the government offers -- depending on where you live. Despite the incentives governments give as a reward for the positive externalities associated with the use of solar power, this has not been enough to encourage people to invest in them, but recently this trend began to change.
Since the demand for solar panels was less than the maximum output that companies were able to put on the market, producers were not able to gain a profit from the PV cells. According to an article from the Stanford School of Business, this resulted in the 40% decrease in the price of panels from 2011 to 2012. The graph below illustrates the decreasing cost of solar power. By reducing the price, going green has become a greater trend for consumers and caused the demand curve to shift to the right. As the cost has been decreasing and the demand has been increasing, more products have been created revolving around the sun. Some examples include solar backpacks with portable sun-powered batteries, solar chargers, solar cars, solar cookers, and solar computers. The producers of these goods are taking advantage of lowering costs of solar cells. Companies have also begun to use solar power to attract consumers that want to be a part of this environmentally friendly movement. For example, Kohl’s is one department store that advertises their efforts to conserve energy; they have eliminated their use of fossil fuels and have completely converted to alternative energy sources in stores. 
Many companies have recognized consumers’ interest in helping the environment, and it has encouraged them to find interest in saving the planet as well. We are always chasing the next best thing, and with solar energy there is an abundance of benefits that come with it. As these trends in the cost of solar power and consumer’s demand continue, the future of going green is looking bright.
Works Cited
"Solar Power's Bright Future." Stanford Graduate School of Business. Web. 11 Oct. 2015.
"The Three Biggest Solar Charts of 2014." Institute for Local SelfReliance. Web. 11 Oct. 2015.
I think that this is an important topic to talk about involving economics. As we burn more and more fossil fuels, it will quickly become imperative that we switch to a much cleaner energy source that will always be available to us. I think that your use of vocab terms in this post were used very well and overall you did a great job explaining in detail about the drop in price for solar panels. It is important to know this information in order to make big decisions about how we gain energy in the future.
ReplyDeleteThis is a very interesting topic, since there are many trade-offs involved with solar panels. With the price decreasing due to lack of demand, there are more consumers in the market that want to buy them. Even with more consumers wanting to buy more solar panels, did the curve really shift to the right? Or rather, was there no shift, and the demand just traveled down the original line?
ReplyDeleteI really hope that the cost of solar panels continues to decrease so that more people will purchase them and help conserve what little we have left of nonrenewable resources. Not only do these solar panels prevent the use of resources, but the decrease pollution, which is a great thing in a world where our atmosphere is filled with harmful gases that come from the burning of these fossil fuels. I think as more people and companies begin to realize that pollution and the use of fossil fuels is harming our planet, than more people and companies will want to invest their money into green energy. Overall very interesting topic!
ReplyDeleteI really hope that the cost of solar panels continues to decrease so that more people will purchase them and help conserve what little we have left of nonrenewable resources. Not only do these solar panels prevent the use of resources, but the decrease pollution, which is a great thing in a world where our atmosphere is filled with harmful gases that come from the burning of these fossil fuels. I think as more people and companies begin to realize that pollution and the use of fossil fuels is harming our planet, than more people and companies will want to invest their money into green energy. Overall very interesting topic!
ReplyDeleteThis is an interesting topic because everyone would try to help the environment by using things that are energy efficient, but for most people it costs more to get energy efficient things. If they lowered the price of all the things that would help the environment more people would participate. The prices have gone down because people didn't find the solar power as efficient as they thought because it took so long to gather energy so less people wanted to use the solar power. If companies can figure out a way to get solar power at larger amounts and at a low price, more people would want to use it and help the environment.
ReplyDeleteI believe that the solar panels were priced reasonably if you take in the factors of cost of production, long term benefits, and a safe/unlimited source of resource without many negative externalities. What people don't understand is the bigger picture, you buy a couple solar panels one year, don't pay for electricity for the next 3-5 years until you need new solar panels, and you save all the money you would've spent on electric bills. If the sellers had made their product sound like the best choice possible like I did the outcome would've been a lot more different. In order to survive in the market you have to be willing to actually 'sell' your product.
ReplyDeleteIt appears that the decrease in cost really proved to be a positive impact on the effort to make consumers more "green". With the constant increase in demand for solar panels the price is able to continue decreasing, also making them more available for consumers. This benefits both the producers and the consumers. In the long-run, these solar panels will benefit the consumers as they will not have to make reoccurring payments for non-renewable energy. Since the energy from the sun is not limited, and free, people who invested in solar panels will benefit from lower energy costs after a longer time of use.
ReplyDeleteIncreased demand for solar technology may help incentivize companies producing this technology to further improve the efficiency of harnessing solar energy. It would be interesting to explore how this change in interest allows companies in other industry to improve their image and profitability by supporting new green technology. I know companies like ebay have been recognized for their move to solar technology in a positive manner. Consumers responded to Walmart's green policies were quite different as they were accused of doing this only to try to overcome recent scandals associated with the company.
ReplyDeleteI think we misunderstand how much it costs to install anything solar powered. For many people, they do not have nearly enough money to install solar power and the technology that generates it into the energy that we use. Also the amount of people that maybe can afford it, cannot install it because they do not receive enough sunlight to benefit them. Especially in Wisconsin the amount of sunny days in the year are limited and for 5 months of the year are covered with snow or ice, not being able to generate energy. And even though you have energy stored from the days filled with sun, it will not last you throughout the whole winter makes it unreasonable for people in Wisconsin to install solar panels, though if you lived in California, solar panels would greatly benefit you.
ReplyDeleteAs the price of solar panels are decreasing due to improvements in the technology used to produce them and as the amount of available compliments such as home battery units increases economics and common sense both tell us that demand for solar panels will increase, as we are seeing. As prices continue to drop and the energy produced by solar panels becomes increasingly easy to store and use, I believe that solar power will become a much more common source of energy.
ReplyDeleteThis is a a great topic, because since the decrease in price of the production solar energy would increase, would make it an attractive substitute to the fossil fuels that or society have come to rely on. Hopefully this trend will continue, so that the demand for fossil fuels decreases to a more environmentally sustainable level. Before our society can commit to renewable energy, it needs to be economically feasible for consumers, and I believe that along with the increasing price of fossil fuels will provide enough incentive for the world to use solar power as a more common source of energy.
ReplyDeleteAs technology progresses and the need for cleaner energy progresses we will see a decline in the price of solar panels and an increase in demand. However, we will never see 100% of the worlds population relying solely solar energy as their location may not allow for enough sunlight to reach the panels. This doesn't mean that someday everybody might not have solar panels but instead may use a combination of energy sources to meet their needs.
ReplyDeleteIt’s true that humans need to start looking for alternative forms of energy to replace the use of scarce resources. We do have many of the technologies to accomplish this, however, like you said in your post, it’s difficult to see past the initial price. If we accept delayed gratification, it is easier to make the choice of accepting the opportunity cost of the large sum of money you could have invested into something else now, for the trade-off of cleaner, more sustainable energy that will save money in the long run. As more and more people come to make the choice of investing into sustainable energy, many entities will benefit, not just the person/company that made the choice. Like Aidan said, however, we won’t likely ever reach full use of solar energy because some locations are sunnier than others, but there are still more forms of renewable energy.
ReplyDeleteAustin Johnson
ReplyDeleteI liked how you mentioned that at first solar power was way to expensive for anyone but the rich to use. Over time thanks to government subities, investing and research, solar panels became more affordable over time. I think they will only continue to improve to be both smaller and more energy efficient. I think solar power will be one of the more popular renewable resources, because it is the smallest and impacts everything else less.
The solar power is the perfect solution for the future.The use of solar power can control the level of pollution, as the process of generating electricity from sunlight cause no pollutants.
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Since the demand for solar panels was less than the maximum output that companies were able to put on the market, producers were not able to gain a profit from the PV cells. And also, when solar panels first hit the market, the price were too high and the solar power was not worth trade-offs with conventional electricity. Only wealthier consumers or people who were drawn to the idea of saving the environment bought the product when it was first introduced, due to the expense of the solar panels. Consumers also took into consideration that solar power companies weren’t producing substantial electricity to completely replace the conventional sources of energy.
ReplyDeleteThanks for sharing information about solar power it is really informative.Solar Panels absorb the energy from the sunlight and the photo voltaic modules generate electricity from the absorbed solar energy.I know a place one of the bestSolar installationprovides best solar services and products that are not just economical, but also efficient with customized solutions to offer you the best from our vast range of affordable models...
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ReplyDeleteWith the advent, the widespread use of Solar power and Net-Metering offered by K-Electric has shifted the power back to energy consumers especially in Pakistan where the increasing cost of units, energy
ReplyDeletecrisis and lack of intelligent energy systems are the key factors. On-Grid systems offered by Solar companies in Pakistan help in bringing down the costs as much as 35% or even more. Solar is a cleaner and greener form of energy with a bright future.
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ReplyDeleteIt you are keen to create your own Solar Energy House, you may well have considered DIY solar panels. Well, while I applaud your desire to have a solar energy house, let me mc4 cable connectors warn you that you will not save money by making your own solar panels. Lets look at why.
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