As the world prepares for an impending energy crisis, fueled by soaring oil prices due to growing demand for energy and fewer resources, solar panels are becoming a more lucrative and attractive solution to fuel our hungry world for energy. As the price of fossil fuels increases and the cost to the environment becomes a major concern, solar panels are becoming more affordable and cost-effective – in the long run.
Solar panels create electricity by converting the sun’s energy into electricity. The energy that the sun provides is free, but transferring it to electricity is not free. In the past, solar panels were a useful but expensive method of providing power. However, as the market demands eco-friendly alternatives, and as more companies and individuals install solar panel systems in their homes and businesses, solar panels are being produced on a larger scale and thus are becoming much more profitable.
However, if we take into account the cost of damage to the environment, solar energy is by far a much cheaper, practical and economical solution for energy needs. Of course, solar energy is not the only solution to get away from fossil fuels, and is just one solution for many, but most local governments have rebates and tax incentives that make the cost of installing solar panels in homes and businesses still more attractive and financially rewarding.
Country like China has become the factories of the world in a few years. The China Development Bank is leading the way to lend to these China solar panels companies at the request of the government. The difference between the CBD and most regular commercial banks is that it raises most of its long-term bond funds, where lenders are unable to withdraw money until the maturity ends. This allows the CDB and the government to identify sectors such as solar energy, where long-term profits can be made and invested in them appropriately.
With government investment, these companies have been able to take advantage of economic principles, such as economies of scale, by buying in large quantities to reduce costs. The capital would have been used in research and development to look for ways to create better solar panels. With regard to labor costs in countries such as the United States, Germany and Spain, the Chinese labor force will be considerably cheaper.
All these factors allowed China to establish a strong presence in the solar industry and to be able to offer solar panels at prices never seen before. There has been an average fall of 33% this year and experts are predicting an even larger fall before the end of the year, so there was no better time to invest in relatively inexpensive photovoltaic solar panels. However, people may want to wait to see if other economies could be made from China’s dominance over industry and the opening of trade between countries.