Home PanelsHome Panels

ByMohammed Khadim

ByMohammed Khadim

Timing of Market Entry Strategy Analysis

for Home Solar Panel

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What is Solar Energy?

Advantages: Clean Abundant Free

Disadvantages: Must be captured, concentrated, stored,

and converted to be used as energy Cost of solar systems remains higher

than traditional energy alternatives Cost dependent on technical and cost

limitations of existing materials and systems

Lack of private sector research investment

Immature industry does not yet generate profit margins large enough to allow for significant reinvestment

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Home Solar Panel Technology

Solar panels can be used in a variety of different ways in order to harness energy from the sun

Two types of home solar panels in common use today solar electric panels solar hot water panels

Solar electric panels or photovoltaic (PV) panels capture the solar energy in light form and then convert it to electricity

Solar hot water panels capture the solar energy in heat form which is then transferred to the water Recent designs of solar water heaters have

increased the efficiency of these home-based systems, and are certainly a strong contender against solar PV panels

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Home Solar Panel Technology (cont.)

Home solar panel technology Past - silicon which is used in computers

as well Recent - other materials and metals

because of rising cost of silicon• Gallium arsenide – NASA and

government use but very expensive

As the cost of solar technologies decreases, and the cost of fossil fuels increases, we are likely to see a widespread increase of home solar panel installations

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PV is an extraordinary energy technology

Continues to be researched and deployed

Cost effective energy source in many countries including Japan, and Germany

PV cells are very important in producing enough sunlight and heat in order to successfully produce the energy that is needed in order to heat up water, heat homes and power electricity

Solar PV energy is perfect technology because of its ability to improve the national security and boost the economy

Photovoltaic (PV) Technology

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Suitability of Solar UsageSuitability of Solar Usage

best when more than 60% of daylight hours sunny

www.bio.miami.edu/beck/esc101/Chapter14&15.ppt

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Timing Of Market Entry Strategies

Technology has to exist

Needs to be marketable

Must be a need for it

Company producing the technology has a good reputation

Company has to have money to produce it

Time of delivery is important

Be able to build on the existing technology

Needs to be developed quickly, simply and cost effectively

Needs to be attractive to the buyer

Timing of entry is related to likelihood of success

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First Movers (Pioneers)

First mover bears the most expense and risk for development and introducing a new innovation

First Home solar panels began full commercial operation of its initial manufacturing line in late 2004

From 2004 through today, manufacturing capacity has grown 2.5 percent to more than 500 megawatts in 2008

First Solar’s annual production capacity will double in 2009 to more than 1 gigawatt

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Knowledge of Customer Needs

Customer care about Environment

• Over 70 percent of the electricity in the United States is generated from fossil fuels, a finite resource that emits greenhouse gases and other pollution

Security Air we breathe Climate change

Home Solar Panel Drastically reduces the energy bills Reduces the cost of living Domestic energy source Clean

Clean energy, good jobs and economy have already started in the United States and it is gaining momentum

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From 2004 through today, First Solar’s manufacturing costs have declined two-thirds from over $3 per watt to less than $1 per watt 1954 - approximately 1 watt of PV generating devices

was manufactured 2004 - approximately 1 billion watts were

manufactured worldwide

In late 2007 the United States installed just over 3400MW of solar power (including PV, CSP, and solar hot water) Solar energy manufacturing expanded capacity of

thin-film PV, silicon manufacturing, and other equipment production and grew 74 percent

Improvement Over Previous Technology

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Mature Enabling Technology

Main parts for building home solar panel are: Solar cells or photovoltaic cells or simply just PV Plywood Glass Copper wire Silicone UV protector

Solar cells or photovoltaic cells are the heart of a solar panel

Solar PV customers must be able to connect to the utility grid without undue delay and expense

Consumers should be equipped with PV systems that meet their energy needs while crediting customers for all the energy they generate

Utilities should charge consumers fairly for the electricity they consume and make the same rate choices available to solar customers that are available to other customers

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Industry Experience Increase Returns Making electricity directly from sunlight using

silicon-based solar cells was patented by .M. Chapin, C.S. Fuller and G.L. Pearson, of Bell Laboratory in 1954

Solar must be at or below the cost of fossil fuels if it is going to play a major role in the market

Solar PV market has been studied until 2012 by EPIA Global Market Outlook for PVs, the solar PV market has been successful over the last years and it is expected more successful in the coming years In the coming years it is expected that the rate

of annual growth will exceed at 30 percent

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Industry Experience Increase Returns (cont.) Markets for solar panels are in Europe (Germany, Spain, Italy,

Greece, France, Portugal) and also USA, China, Japan, South Korea, India In 2006 the largest market for solar PVs was in Europe United States ranks 4th in the world for installing solar power

after Germany

2020 goal for the Solar Program Cost of solar energy to be competitive with fossil fuels

Solar industry estimates that growth rates above 25% annually

are possible, resulting in a $27 billion market by 2020 Market growth would result in a United States solar industry

that could employ 150,000 people by 2025 Growth means new jobs, a stronger economy, and increased

energy independence

Demand for solar PV cells now outpaces demand for computer chips

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Accelerate Market Acceptance

Policy to ensure deployment of solar energy

Financial incentive which ensures market stability and cost reductions• Continued incentives and supply chain efficiency will help make the cost

of solar competitive with fossil fuels• Federal government has shown support for solar energy in recent years

with the passage of Energy Policy Act of 2005, which provides tax credits for investors in solar power systems

• Starting in 2008, home builders offer solar panels as one of the options for new homes in California. Customers who install the system will pay a time-of-use rate, increasing their savings further. Customers will sell back excess electricity to the electrical utility at retail prices.

In the last 5 years, home solar electricity installations have seen a large increase due to Increased education on climate change Increasing electricity bills

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Available Complementary Goods

Producing solar panels has two technologies Solar panel Thin file

Solar panel is based on silicon as raw material Global silicon market is limited and closed Price of silicon increases constantly By 2010 it is expected that the silicon will reach 8-10 GWp. For some years silicon was the bottleneck of the PV industry Solar panel is expensive because of the high costs of raw materials and the

cost of the production, cost estimated at 3,5 Euro per W.

Thin File Expanding rate of Thin Film capacities is faster than other technology. By 2010 is expected that approximately 4GW of Thin Film capacity will be

available Estimated cost of thin film per WP is 90 cents Eur One major advantage of thin film is it uses less silicon absorber material

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Conclusion

The strategy for the timing of market entry for home solar panels was first-mover

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Questions?