Econ_545_Proj_Two_Final - Keller Graduate School of...

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Keller Graduate School of Management DeVry University Course Title: Econ 545 (Business Economics) Topic: Macroeconomic Analysis of the Solar Panel Industry Submitted by: Amos N. Sando Daniel Stump Dave Steve Evelise Felis John De La Cruz, Joseph Clervaux, Ketankumar Patel Margaret Baez Mohsin Khan Siddhi Surv Date: October 11, 2016
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Table of Contents Topics Page 1. List of Figures: ..................................................................................................................................... 2 2. Introduction .......................................................................................................................................... 3 3. Gross Domestic Product ....................................................................................................................... 4 4. Business Cycles .................................................................................................................................... 5 5. Unemployment ..................................................................................................................................... 6 6. Inflation ................................................................................................................................................ 7 7. International Comparative Advantage .................................................................................................. 8 8. Exchange Rates .................................................................................................................................... 9 9. Monitory Policy and Interest Rates ...................................................................................................... 9 9.1 Effect of the Interest Rate on the Solar Panel Industry ................................................................. 9 10. Fiscal Policy ....................................................................................................................................... 10 11. Demographics ..................................................................................................................................... 11 11.1 Gender Impact ............................................................................................................................. 12 12. Conclusion and Recommendations .................................................................................................... 13 13. References .......................................................................................................................................... 15 1
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1. List of Figures: Title Page Figure 1: Annual Value Added by Utility as a Percentage of GDP ............................................................. 4 Figure 2: Increased in the Consumption of Solar Energy ............................................................................ 5 Figure 3: Rate of employment growth in the solar industry 2010 to 2014 .................................................. 6 Figure 4: Annual Solar PV Installations and Prices ..................................................................................... 7 Figure 5: The Rise and Fall of Federal Reserve interest rates ................................................................... 10 2
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2. Introduction This paper is a product of an investigation into existing data from the solar panel industry. The intent of the research was to ascertain the impact a solar panel installation business can make on the overall productivity of the economy and how it is affected by the business cycle. The outcome of the research gave the team an incentive to draw up a logical conclusion and recommendation for its client on the feasibility and profitability of the solar panel industry. Specific macroeconomic variables that were examined are Gross Domestic Product, Unemployment, Inflation, Monetary Policy, Fiscal Policy, Demography and International Trade. An in depth discussion of these variables make up the body of this project. 3
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3. Gross Domestic Product The Gross Domestic Product is the market value of all final goods and services produced and sold in a country during a period of time, typically a year. Its measures include only final goods. Solar Panel is a subset of products that make up the utility industry of the United States. Solar Panel is categorized as utility producing commodity because it is used to provide energy that lights up homes and businesses and power working equipment. The utility industry to which the solar panel belongs is a major component of the GDP of the United States. Its percentage of value added to real GDP has steadily is shown by the below figure. Figure 1: Annual Value Added by Utility as a Percentage of GDP Source: Bureau of Economic Analysis The graph shows the value added by the utility industry as a percentage of GDP for eight years from 2008 to 2015 inclusively. In the year 2008, 1.6% of the nation’s real GDP was contributed by the utility industry. In two years, the percentage rise to 1.8, it remained unchanged for another two and fell back to 1.6% in 2012, which has remained stable at this proportion until 2015.
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