PanElectric Company
SWOT Analysis
Strengths
● Solar power is unlimited and free; one hour’s worth of sunshine provides
more energy than the world needs in a year.
● Because a large surface area is required to collect solar energy at a useful
rate, PanElectric intends on turning a building’s outer walls into a solar
farm.
● Business model is scalable and potentially can be replicated worldwide.
● PV panel installation costs are being reduced through manufacturing
efficiencies and technological advancements. A continuation of this trend
will make solar PV systems highly competitive with carbon-based generation
options.
● Unlike wind farms, no new transmission capacity is required (designed to
work with existing grid).
● Regulations – satisfies government-mandated green power requirements.
Weaknesses
● The amount of sunlight that arrives at the earth's surface is not constant
(depends on geography, latitude, time of day, time of year, and weather
conditions).
● Current PV panel technology is only 10-12% efficient.
● Company can only generate power during sunny periods.
● Each state has different regulations, there are no consistent federal standards.
● Technical knowledge requirement is significant, both about PV technology and
attributes of electricity industry/market.
● Large-scale financing (of $20 million or more) may be difficult, especially
under current market conditions.
● Perhaps difficult to protect business differentiation, model can be copied by
those with industry expertise.
Opportunities
•
Substantial market interest (“green revolution”), combined with significant
governmental incentives promoting alternative energy sources.
•
High public awareness about energy policy and growing momentum for
creating more alternative energy sources.
•
Growing interest in alternative energy generation at the household level
(rather than on large utility scale), including use of solar, wind, and biofuels.
•
Continued tax incentives.
• U.S. electricity demand is expected to increase by 30% over next 30 years.
•
Global warming concerns are nearly universally accepted, thus putting
intense pressure on reducing carbon emissions and carbon-fueled generation.
• National and state requirements for increased green power generation
• Increased use of carbon cap-and-trade offsets requires alternative energy sources.
•
Tremendous solar power growth potential as PV technology improves and
prices become more competitive with traditional generation.
• Solar power industry is projected to provide significant job growth, bolstered by
Obama
Administration policies to create new economic fundamentals.
Threats
• Customers could substitute other alternative energy or “green” sources,
such as wind, biofuels, hydroelectric, geothermal, and ocean waves
•
“Green” improvements for traditional generation sources, such as “clean”
coal, reusable nuclear fission, or natural gas, could prevent mainstreaming of
solar generation.
•
Emergence of new or currently unproven power generation technologies (ex.
space solar, nuclear fusion) could make current solar technology obsolete.