III. Industry Analysis
Over the next five years, revenue within the Solar Farm industry is expected to grow tremendously. In general, the capital costs associated with developing and constructing a new solar farm are expected to fall substantially over the next five years due to an excess supply of solar panels as well as general improvements and advancements in solar power technology, which will reduce the per kilowatt-hour (kilowatt of electricity generated in one hour) cost of solar power. The key industry drivers include:
- Tax credits for energy efficiency-Tax credits generally encourage private investment into solar technologies by making development of solar energy projects cheaper. Demand for solar farm development will increase while the tax credit is in effect.
- Electric power consumption-Demand for solar power hinges primarily on the level of electric power consumption throughout the United States. Increased demand typically translates into growth in renewable energy implementation.
- World price of steaming coal- The price of steaming coal generally reflects demand for coal to produce electricity. An increase in the price of steaming coal leads to higher demand for alternative sources, including solar energy, to the benefit of solar farm developers.