How to Save the Planet, The Commercial Building Construction Industry, and SunPower Corporation
Alex Busque, Jiadi Lu, Gaurav Singh
New York University
Across the world, there are themes currently being examined by top political leaders, academics, and activists to help us understand how to approach today’s social, technological, and business trends and prepare ourselves for the future global economy. At this year’s World Economic Forum in Davos, Switzerland where prominent figures such as Greta Thunberg, Angela Merkel, and Winnie Byanyima were in attendance, seven themes were distinctly identified and are listed in the following: Beyond Geopolitics, Society and Future Work, Tech for Good, Fairer Economies, Healthy Futures, Better Business, and How to Save the Planet (World Economic Forum Annual Meeting Davos 2020, 2020). Each theme holds its merit and impacts our day-to-day lives and futures in both unique and somewhat overlapping ways, requiring specific, different modes of thinking to navigate its implications and lead us into success. In this research paper, however, we focus specifically on the theme, How to Save the Planet, and assess the impact of energy efficient buildings in business in particular, how this kind of green technology and innovation has changed our landscape, and how it will continue to do so.
Our research takes an inverted pyramid approach in assessing our theme, How to Save the Planet, and consists of three different sections. The first section of this research paper serves as an introduction of our selected theme and aims to familiarize our readers to the history of energy efficient buildings up until today and the financial benefits businesses may find in investing in energy efficient and green buildings. After providing historical context to our readers, our second section serves as an industry analysis of the commercial building industry (a heavy contributor of greenhouse gases) where we run various economic analyses (SWOT and PEST) to better understand the overall structure of our chosen industry and energy efficient buildings, and we make observations as they relate to the industry’s lack of greenness and energy efficiency. Lastly, our final section consists of a company analysis of SunPower Corporation, an American-based energy enterprise which focuses on providing solar-powered solutions to both residential and commercial buildings, helping them become green and energy efficient. In the final section, we, similarly to the industry section, run economic analyses, but we additionally make observations in the context of our chosen theme as to why SunPower is a positive force and provide recommendations for the company to consider as part of its industry to maintain overall success.
In recent news, developments and initiatives have been shared at the World Economic Forum in Davos on how to combat one of the world’s greatest crises: global warming. From the melting of ice caps, effects from carbon emissions, and changing climates, leaders such as Greta Thunberg, Al Gore, and others in various domains have joined together to identify such issues and generate plans on reducing the harm humans are causing to the environment (World Economic Forum Annual Meeting Davos 2020, 2020). In support of creating awareness of human activity on the environment, and prior to Davos 2020, the National Aeronautics and Space Administration (NASA) delineated on their website specific statistics providing evidence of the overall negative effect human activity has had on the earth. For example:
- The global average temperature since the 1800s has risen by about 1.62 degrees Fahrenheit, with 2016 being the warmest year on date.
- Ice sheets in Greenland have lost, on average, about 286 billions tons of mass each year between 1993 and 2016, and the ice sheets in Antarctica lost about 127 billions tons of mass in that same time period. The rate of mass loss, however, in Antarctica has tripled between 2006 and 2016.
- Global sea levels have risen by about 8 inches during the last 100 years. In addition, the rate of sea levels rising has accelerated slightly every year (National Aeronautics and Space Administration, 2020).
By consequence, these scientific insights have influenced civilians and leaders alike to make a more conscious effort in becoming green and saving our planet. This effort, however, is not necessarily novel to 2020 and has evolved over time, and as more information and perspectives become available the world has recognized various materials, systems, and people which may collectively bring a significant impact to decelerating the aftermath of negative ecological decisions and inspire more mindful attitudes. More specifically, however, technology and its advancements have played a major role in this evolution and continues to demonstrate itself as a partner in helping cities, citizens, and businesses become greener. With improvements in data analysis, algorithms, networks, the cloud, and with exponential improvements to digital hardware, the future holds promise for a more environmentally-conscious era, but resistance will always come on the part of businesses if they do not believe in green technology’s potential positive impact on their bottom lines (McAfee Brynjolfsson, 2017). This resistance, however, may dissipate over the next few years as innovative projects such as Stanford University’s solar powered, energy efficient buildings are projected to significantly cut costs, thereby aligning themselves strategically with a fundamental business goal. Since residential and commercial buildings account for over 40% of total American energy consumption, businesses not only have an opportunity to cut down on costs but also a chance to significantly contribute to the global green-revolution taking place today by investing in the capital of energy efficient buildings and using alternative forms of energy (Nesler, 2020).
The history of energy efficient buildings and houses and solar power begins long before the 20th century, but the deliberate use of technology and science to create such infrastructure can be specifically traced back to the 1890s. At that time, scientists were studying topics such as the thermal insulation effect during heat transfer, multilayer configurations of windows, and the transportation of moisture in building walls, and homeowners were becoming more acquainted with the ventilation process of homes by convectively circulating preheated air from their basements to the upper levels of their homes (Ionescu et al., 2015). Collectively, this research and these practices help set the technological and theoretical frameworks for scientists during the early 20th century, where innovations such as electric air conditioning came to fruition. These innovations naturally led to the concept of, and desire for, energy efficiency in buildings, but it was not until the 1930s that anyone had narrowed the focus in their studies or innovated in this domain. During the 1930s, two individuals named George F. Keck and Hoyt C. Hottel respectively built the “House of Tomorrow” and the “MIT Solar House 1,” which were two energy efficient houses that were strategically designed and constructed to optimally capture heat from the sun. A large part of their success is due to the thermal designs of different components and equipment like solar collectors, but this kind of innovative momentum stagnated during the 1940s as the world plunged into World War 2. By the 1960s, the momentum picked up again as researchers focused on seasonal energy storage systems and, more importantly, the computer-ran processing of thermal load data (Ionescu et al., 2015). Through computer technology, scientists were, for the first time, able to evaluate the amount of cold and hot water and steam that buildings “used for air conditioning in a district heating and cooling (DHC) system (Sakawa, 2016).”
Following the research conducted during the 1960s, the oil crisis in 1973 further influenced the rising interest in energy-efficient buildings. The energy crisis spurred citizens and researchers alike to learn more about, and consequently improve, areas such the air tightness in buildings, super insulation, heat recovery in ventilation systems, triple pane windows and other technologies meant to capture thermal energy from the sun (Ionescu et al., 2015). It was during this time as well that New Zealand architects, Brenda and Robert Vale, introduced their new theories of self-sufficient houses, autonomous houses, and green houses and applied them in building a self-sufficient home in Nottinghamshire, England from recycled materials like concrete blocks made from waste ash and the firing of bricks for external walls with landfill gas from decomposing garbage (Jia, 2009; Ionescu et al., 2015). After the oil crisis, scientists progressed by defining the concept of sustainable development, whereby architects and builders adopted sustainability principles to define new design strategies. Buildings which integrated themselves into their surrounding landscapes and communities, while also adhering to other sustainability principles, became labeled and recognized as being “sustainable buildings (Ionescu et al., 2015).” As more energy-efficient buildings were constructed during the 1970s such as the “Phillips Experimental House,” the “Saskatchewan Conservation House,” the “Leger House,” and the “Lo-Cal House,” attention towards energy efficiency increased leading to the first tech-influenced, “intelligent” energy efficient buildings in the 1980s (Ionescu et al., 2015).
General progress continued in the 1990s as the first energy autonomous house was built and designed by the Fraunhofer Institute for Solar Energy in Freiburg, Germany. The house, using solar technology and strong insulation, was able to supply its own energy needs without depending on external sources, thus setting a foundation for future solar energy/energy-efficient projects such as Stanford University’s (Ionescu et al, 2015). More progress, however, was completed in relation to improving the technology in intelligent energy efficient buildings, and Wang (2010) breaks down the “intelligent building age” into four distinct phases: buildings using integrated single function systems (1980 – 1985), buildings using integrated multifunction systems (1985 – 1990), buildings with building level integrated systems (1990 – 1995), buildings with computer integrated systems (1995 – 2002), and buildings with enterprise network integrated systems (2002 – present) (Ionescu et al., 2015). In the 1980s, automated systems in energy efficient buildings were each specifically dedicated to a single machine such as for heating, but as time progressed, technology evolved to the point where a single system could monitor and control all functions like heating, air conditioning, and electricity. Control of these systems prior to the third phase could not be done remotely, but with the introduction of the internet, remote control was achievable. It should be noted, however, that control of building systems was at a building level (a great advancement from being at machine level), but with the advancements in information technology like Web Services, helpdesk management, and XML, the limit on this control changed. In the latest and current phase, intelligent building systems can be “integrated and managed at enterprise level or city level,” thus giving businesses better control over their buildings’ efficiency and energy both on-site and remotely (Wang, 2010).
Although there is a clear, established history of energy-efficient buildings, and that these buildings are environmentally friendly, the most important part, again, for businesses is knowing how such an investment could positively contribute to their bottom lines. It may not be enough to know about the energy efficient houses built during the 20th century or that other companies like H-E-B Mueller (a grocery store) in Austin, Texas or the Center for Sustainable Landscapes in Pittsburgh, PA have already made investments in buildings using solar power and reclaimed water (Weller, 2016). Both the National Renewable Energy Laboratory (NREL) of the US Department of Energy and Energy Star (a US Environmental Protection Agency program) point out that energy-efficiency investments can help businesses by: cutting down operating costs, helping them receive better financing terms, improving their public image and commitment to social responsibility, and commanding higher rent for energy efficient commercial real estate properties (Energy Star, 2020; NREL, n.d.). Firstly, in terms of cutting down operating costs, Energy Star provides the example of when Kimberly Clark Group invested $350,000 to replace the lights in one of their fabric mills with light-emitting diodes (LEDs). This project yielded significant energy savings of $160,000 per year, thus paying for itself in just a few years. Secondly, Energy Star argues that research on commercial mortgages has brought evidence to light that there is a lower default risk in energy efficient buildings. Consequently, companies with energy efficient buildings enjoy better loan terms and lower-interest rates. Thirdly, by demonstrating a commitment to becoming, and being, environmentally friendly, businesses create an opportunity to gain customer preference, loyalty, and trust, thereby potentially enlarging their customer base and boosting revenue. Lastly, Energy Star describes how studies have shown that office buildings with their certification (indicating that they are energy efficient) have gained higher rental rates and higher occupancy rates, as tenants are putting a premium on energy efficiency (Energy Star, 2020).
Given their strategic alignment with the fundamental business goal of cutting costs and their positive impact on the environment and their communities, energy efficient buildings are a smart, efficient, and competitive investment for companies in the United States. By cutting costs as much as Kimberly Clark Group, companies may additionally find indirect positive results from using energy efficient buildings such as improvements in their products and services. Most importantly, however, by using energy efficient buildings businesses have the chance to decrease the percentage of total American energy current residential and current buildings consume (41%) and contribute towards a healthier, greener future (Nesler, 2020).
According to the Environmental Protection Agency, the largest sources of toxic emissions by sector are: Electricity (29%), Transportation (28%), Industry (22%), Commercial and Residential sector (12%), and Agriculture (9%). One of the sectors which is directly affected by all of us, however, is the commercial and residential sector. Every day, we use appliances, we heat water, use electricity, and dump waste - all these activities are directly, or indirectly, connected to the deterioration of the environment. If the emissions from the generation of electricity required for households are taken into consideration, then the commercial and residential sector accounts for 33% of total US greenhouse emissions, making it the largest sector in terms of harmful emissions (Agency E. P. A., 2019). Using eco-friendly methods, however, businesses and every individual at the most basic level can contribute to a significant reduction in those emissions.
Greenhouse gas emissions from this sector come from direct emissions including fossil fuel combustion for heating and cooking needs, management of waste and wastewater, and leaks from refrigerants in homes and businesses as well as indirect emissions that occur offsite but are associated with use of electricity consumed by homes and businesses. Also, the construction of those buildings and offices account for heavy pollution which can be reduced by using sustainable methods. Emissions from natural gas consumption represent 89.0 percent of the direct fossil fuel CO2 emissions from the residential and commercial sectors. Organic wastes produced in the sector release CH4, wastewater treatment causes CH4 and N2O, and hydrofluorocarbons are produced by air conditioners and refrigerators. Almost all of the activities involved are related somehow to the discharge of greenhouse gases into the environment. Such is the condition of our theme that, if immediate and corrective actions are not taken, then it would be too late to save the planet in the future. In this section, we will discuss the future trends and the methods that we can deploy to create a significant impact in the coming future. We will also perform a SWOT and PEST analysis to gain a better view of our chosen sector.
Emission Trends and Projections
From 1990 to 2015, emissions deriving from the combustion of fossil fuels from commercial and residential buildings increased 7.8% and 20.3% respectively. Most of the emissions are the result of indirect emissions from electricity generated to power those buildings. Most of these indirect emissions can be associated with population growth, increased demand for housing leading to construction of new buildings, and the use of electronic devices and their energy consumption. To put it simply, the world population grew from 1.6 billion in 1990 to 7 billion in 2018, directly increasing the amount of electricity required for people. By consequence, this led to more indirect emissions generated offsite to meet the needs of citizens and businesses, which explains the 11.9% spike in indirect emissions since 1990 - a statistic to increase in the future. Looking ahead, energy use from this sector is expected to increase by 0.3%, but the total direct and indirect emissions from the residential sector is expected to decrease by 12.3% from 2016 to 2050 and emissions from the commercial sector are expected to increase by 0.9%. Most of these increases are related to indirect emissions, which can be reduced by using better energy and eco-friendly devices. In essence, when energy demand goes down, emissions related to production goes down. While most of the future direct emissions are expected to decrease, the indirect emissions in both the commercial and residential sector are expected to grow at an alarming rate. Convincing people to move from using fossil fuels to a clean energy source is a difficult task; there are social barriers and norms that they are not willing to break. To help convince them, they have to be shown that it is actually healthier if they switch to a green source of energy rather than the existing one.
Major opportunities to decarbonize the buildings sector include the substitution of direct fossil-fuel combustion for electricity and improved energy efficiency, the reduction in direct emissions is widely through wider deployment of “intelligent efficiency” technologies (c2es, 2020). Major challenges include upfront costs and long payback periods and “split incentives” among builders, owners, and occupants . Having a better understanding of the industry and its consumption will give us a close prediction of the future and the practices that we need to focus on to reduce the harmful emissions. To understand the challenges and the functioning of companies performing in this sector we will conduct a thorough SWOT and PEST analysis, which will give us a look into the intricate details of the industry.
Performing a SWOT analysis will give us a detailed view about the strengths, weaknesses, opportunities and threats of the companies that work in this industry. Knowing each of these for their respective industries could help any business shape up, find areas to grow, and recognize their mistakes and loopholes early on in their lifecycle.
- Eco-friendly and long lasting. The fact that the green technologies or companies working in this sector aim to reduce the total harmful emissions from the residential and commercial sector, many people will provide their support for a noble cause.
- Government support towards the green movement
- These homes and appliances are 20-30% more efficient than normal buildings as they utilize natural methods and energy star appliances, which use a significantly lesser amount of energy.
- Lack of skilled labor and expertise in the market. Since this is a new and developing field there is a shortage of skilled workers available in the market.
- Lack of awareness among the public regarding green technologies and efficient construction methods or regarding the impact of green buildings/constructions.
- Misconception of cost, that only high technologies and expensive techniques are related to green technologies. A block in the quicker acceptance of green building concepts and methods (Prezi, 2019)
- Marketing efforts are not having the impact that they should.
- Government support for industries trying to provide carbon neutral methods for building, transportation or any other sector. Projects that meet measurable and verifiable green building goals often qualify for tax exemptions/credits.
- Well recognized and national brand name for doing something good for the environment and the world. Also, goodwill in the eyes of the public will make your business more popular than your competitors’.
- Increasing cost of oil and coal which will result in more expensive electricity generation. This rise in price will shift a lot of consumers towards using renewable and eco-friendly methods.
- Grant programs or subsidies are also available for developers of energy-efficient technologies as a way to encourage builders/owners to follow practices that aren’t harmful for nature.
- The research and development cost behind the making of energy efficient devices is very high. With new innovation taking time and cost it makes the whole process an expensive one.
- High waste management fees.
- Breakeven costs are long. In the long run, these projects are profitable, but it takes time for that profit to kick in. For a typical green building project, it would take approximately 10 years before it breaks even its operating costs or construction costs (Khoshbakht, 2017).
- Large competitors get a majority of the market share in the current scenario as there are not many companies operating in this specific part of the industry.
These points give us a brief understanding about the challenges that every company has to face in the industry to survive the tough competition. Below, we perform a PEST analysis to learn about the political, economic, social, and technological factors affecting the industry.
- Government policies and regulations regarding green policies.
- Pressure from the government on spreading awareness regarding the benefits of green buildings/ technologies. Governments all across the globe are pressuring companies to adapt to green technologies so that they will have a lower carbon footprint.
- Tax exemptions save a lot of money for these companies. Government provides subsidies and exemptions from paying tax if you comply with the energy efficient standards (leanovationinno58h, 2016).
- Increasing pay/income is a positive trend. It means people will be willing to pay more in the upcoming year and beyond. People will pay more for a better quality of life.
- Lower cost of construction if sustainable methods are used. Many construction companies do not implement recycling techniques. They are not just good for the environment, but greatly cut down on costs too.
- Economically green technologies are very profitable and, in the long run, they start returning money on an investment.
- Lack of acceptance of any other source of fuel other than natural gas or fossil fuel by the general public.
- Varying demographic structure of population. Older individuals are generally not keen on changes of practices and prefer to continue their traditional ways as adapting to new ideas can be difficult.
- Education levels of people and their care towards the environment also play a role in the total gas emissions from this sector.
- Since most of the companies in this sector are relatively new, the costs of research and development of new efficient devices are relatively high.
- Finding skilled and experienced laborers for the development of new products is difficult.
- New technologies are being developed constantly to make methods more reliable and more efficient. Scientists, researchers and engineers are also trying to make discovered methods work. For example, fusion energy at the moment cannot be produced on a large scale, but when the technology is developed enough, we may someday produce all of the world’s energy through fusion power (Viaintermedia.com, 2010)
These research methodologies gave us an inside look into the makings and working of the industry. We now know the challenges and hardships one might face working here, or the sectors that we can tap into and develop even further.
Major Players in the Industry
The threat from internal rivalry is low amongst the companies working in this industry. In seeing how trends are changing, however, governments across the world are encouraging the use of different sources of combustion other than fossil fuels. There are many viable substitute sources to create energy now, all it needs is effort and commitment. There is wind, hydro, solar, and nuclear energy, with the support from citizens to use these forms of energy being high. Support from both customers and the government attracts new companies into the fold, thus increasing the threat of substitute products. We have already divided the emissions into direct and indirect emissions; now, it would give us a better understanding if we look at the companies working in this industry in the same way.
As we know, direct emissions result from daily household usage and waste, so companies like Philips, General Electric (GE), and several others are developing smart technology to combat these issues. Philips is developing efficient smart lightning systems that switch off when they detect no human presence, refrigerators which do not release CFCs, while GE, on the other hand, is developing ways to make efficient transmission of energy between homes. Energy Star, a company mentioned in the introduction of this paper, gives information on how much we can save on appliances and emissions and its label can be found on more than 75 different certified product categories, homes, commercial buildings, and industrial plants. Companies targeting the indirect emissions sector, however, include Leed and SunPower. Leed is a green building program that certifies projects according to how eco-friendly they are. They provide programs and plans for all types of projects whether it be home, interior design, community or school-related, and they offer guidelines which lead to better buildings and higher standard of living to its residents. SunPower is a company that focuses on developing commercial solar energy panels. They also plan on all levels and for all types of houses, whether they be small village houses or resorts. They also offer plans to power whole communities or businesses, and they take up responsibility all the way until installation and manage the maintenance beyond that point. Both Leed and SunPower are top companies in their sector, and their products have helped save millions in electricity bills across the country and reduce its indirect emissions. Their solar panels offer a way for individuals to actually give energy back to the grid. All of the companies mentioned above target a different sector/ aspect of the theme that we chose, however, tackling different ways in how to bring down those pollution levels.
With competition and awareness growing amongst people, competition is going to only grow in the commercial building construction industry. For the existing companies, it is upon how they use their strengths, tackle their weaknesses, how they handle their threats, and whether they are able to take advantage of any opportunity coming their way. Political and social factors will also play a huge role in shaping the future of this industry.
According to the trends and emissions in this sector, the direct emissions are going to decrease in the upcoming years until 2050 due to development of new technologies and because awareness towards the environment is also spreading and people are committing to their social responsibility towards it. Indirect emissions, on the other hand, are expected to increase greatly since our population is increasing along with its demand for energy. The innovation and adoption of new technologies in this sector in the future is important; so, if we curb the emissions here, it will sustain for a long time eventually benefitting our future generations.
COVID-19 and its Impact
The war against climate change has long been going on, but the current crisis of COVID-19 seems to have had positive effects on the climate. Pollution levels all across the world are down, and so are the levels of greenhouse gases. Pollution levels over China have dropped by 25-30% since their lockdown measures have been imposed. Factories across the world have shut, driving levels of nitrogen dioxide to much lower levels. In New York, pollution levels are down by 8-10% and peak traffic by 15%, all of this leading to clearer skies. These lower levels of harmful gases, positive as they may be, need to be sustained over a long period of time so that it has a permanent effect over the environment. According to an article from The Economist, a study found that areas with higher levels of pollution had a greater number of cases of COVID-19 than those areas with a lesser amount of pollution. (The Economist, March 2020)
Similar patterns of low levels of contaminants were seen after the 2008 financial crisis, but past records show that those lower levels were not sustained. Every time after a crisis like this there has been a little bit of relief for the environment. But that relief is short lived as companies and industries go on a rampage to cover the losses they suffered during the economic shutdown. Such an increase could be attributed to governmental support to industries having a hard time trying to recover, such as construction, which causes a great amount of emissions. If the government tries, then they could enforce the money provided for relief to be used for efficient green technologies for our chosen sector so that they would have a lasting effect. Enforcements now will help in the future.
Subsequent analysis has shown that the rise of emissions after the crisis of 2008 was caused especially by rapid growth in certain large emerging economies, notably those of China and India. Low fossil-fuel prices were part of the cause, but there were also stimulus packages deliberately intended to promote carbon-intensive areas of business, such as construction. Sadly, there are signs of a similar pattern of environmentally inappropriate stimuli happening now. Canada, for instance, is preparing a multibillion-dollar bail-out for its oil and gas industry and, in general, airlines are clamoring for help too. Several Chinese provinces have announced plans to go on a 25trn yuan ($3.5trn) construction-spending spree, and other ideas that have been floated in China include vouchers to encourage people to buy cars (The Economist. 2020, March 28). It all depends on the course of actions we take from here and how do we react once this pandemic is over. The above two questions will be a deciding factor in whether we, as a global community, will be able to reach over goals set in the Paris accord for 2050.
In our current reality, where each activity ought to be considered from the ecological perspective, SunPower Corporation brings items and administrations which ought to be granted with the best acclaims. Introducing sun boards in the extraordinary lion's share of the homes and businesses all around the globe is an idea that will most likely diminish the hurtful exercises people do. SunPower Corporation is an organization that offers solar power services to the residents, organizations, and various companies that need energy to drive their multiple activities. The main reason behind the formation of the company is to protect the environment and to prevent the depletion of its resources. It is important to note that another alternative power is hydroelectric power, which depends on many activities for the productions.In the process of using hydroelectric, there are chances of harming the environment. The corporation is also a way of improving the use of green energy, which helps the general conservation of the situation. Since the establishment of the organization, the company has been manufacturing high-efficient solar technologies that are friendly to the environment (Kaygusuz, 2009).
SunPower Corporation, apart from conserving the environment through the use of clean energy, also employs workers from all over the world, making the company to be one of the companies that fully comply with the Corporate Social Responsibility (CSR) policies. Moreover, the company takes part in taking care of the environment to ensure that their primary goal of conserving the environment is achieved. The company serves customers from residential to commercial contexts. Through the solar module technology as well as the solar power systems, the company has been generating electric power for over 25 years. The company as well uses integrated smart energy software solutions that help the customers to manage the corporation (SunPower, 2019).
SunPower Corporation helps in the production of the solar-driven equipment and provides for the solar panels made from different materials in embracing the technology. The homeowners, as well as the utilities, are now able to use solar energy at a cheaper price and have the installation done in a way that is effective. SunPower Corporation is as well considered to be the only solar company operating globally that offers both commercial and utility portfolios. It provides financial support, services, and energy to drive various activities in different industries. As of today, SunPower Corporation manages close to 950 commercial and utility systems of various sizes. This means that the company is reducing the use of unclean energy by about 5%, which is a very good percentage in the conservation of the environment (SunPower, 2019). Despite the massive challenge, many people are again driving their activities using coal energy, which is less environmentally unfriendly. The increased incorporation of solar power in operation will help in creating a safer environment..
There are several customers’ needs that the company is meeting. The first one is that not everyone is capable of installing electricity in their homes; thus, the customers who are not able to access electricity can use the solar energy plan that is cheaply provided by the SunPower Corporation. The high cost of electricity that comes due to increased monopoly in hydroelectric power is a problem to which customers need to find a solution. The SunPower Corporation provides an alternative power source that evades the high cost. These strategies are various such as providing good power at lower prices because it is something that will last longer once installed. Apart from supplying power, the company offers services such as financial services to the upcoming entrepreneurs who want to invest in the solar industry. Thus, apart from providing power at low prices, the company as well helps customers in starting their businesses by providing the starting capital (SunPower, 2019). However, it has to be noticed that there are some warranty issues due to supply constraint of the company. Many customers are complaining about the delay of the component replacement.
Failure to compete successfully may affect the company’s operating profit. “Global solar cell and panel production capacities have been growing, and solar cell and solar panel manufacturers currently have excess capacity. Overcapacity and industry competition have led to substantial downward pressure on solar cell and panel prices. Increased competition may also result in loss of sales or market share. Such price cuts or loss of sales or loss of market share may harm revenue and earnings and affect cash flow” (Sunpower Corporation, n.d.). One of the most critical factors that can be considered is the competition of SunPower Corporation and perceive how every one of them is contrasting with this firm. Among the most overwhelming contenders of SunPower Corporation, the ones that merit referencing are Canadian Solar Inc., JA Solar Holdings Co., Kyocera Corporation, Sanyo Corporation, and Trina Solar Limited. Canadian Solar Inc., however, is unquestionably the most undermining contender of SunPower Corporation., as they send out their items to American residents at lower costs. Be that as it may, as indicated by an announcement created by its officials, the organization does not concur with the U.S. appeal recorded by the American International Trade Commission. This, and the way that customers need to stand by longer to get their items, are two significant determinants that have brought down the intrigue of Canadian Solar Inc. (Paddon, 2018).
The other two important competitors, Trina Solar Limited and JA Solar Holdings Co., face an issue that SunPower Corporation has been fortunate not to have. They have poor requests of sun-oriented boards because of two reasons: the significant expenses that are accessible from the company and the Chinese endowments they bring to the table (Zacks Investment Research, 2018). SunPower Corporation has different steadfast clients who have been very satisfied with the items and administrations and who have continually enlightened their colleagues and companions regarding the organization. This is the reason why SunPower Corporation centers on creating stable relations with its customers. Their prosperity relies upon how individuals see the company. As of recently, their picture is, by all accounts, one that can be trusted as an ever-increasing number of individuals go to them instead of their rivals.
SunPower Corporation has advantages on quality conformance and design, and it must maintain this competitive performance to help the company gain more profit. However, it has competitive disadvantages in after sales Support. SunPower Corporation must invest more resources to improve the competitive power of this area, in order to improve its competitive performance.
To establish the working system in the organization, it becomes imperative to effectively determine the factors that serve as strengths and those which serve as weaknesses in the organization. The business has a number of strengths including having well-established strategies. The strategies that they have in place will help the company to come as one of the best solar power suppliers in India. A highly-skilled workforce is another critical strength that the company is using to achieve its goals and objectives effectively. The company can recruit employees who are highly trained in responding to situations pertaining to customers and market research (Sunpower Corporation, n.d.).
Another strength that the business has is increased product awareness. The solar power plant is becoming more prevalent in India, and in fact, a large number of people in the country are aware of solar power and are already using it. They are planning to create more awareness campaigns making the business gain popularity. Moreover, the company has a good return on expenditure, meaning that they get more returns on their investments, helping them be in a position to deal with their daily obligations effectively. The automation of activities, which is brought about by the use of sensors and the operation robots, improves production in quality, quantity, and saves time that is spent in the production process. The company also has strong support from the environment's agencies since it promotes the use of green energy that is highly recommended in its day-to-day operations (Sunpower Corporation, n.d.).
Despite the strengths, there are some weaknesses that the business faces. These weaknesses include the lack of proper interaction with the customers since this business is just beginning; they have not yet had an opportunity to reach as many consumers as they should. This may make it challenging to address several issues facing the clients as a result and they may end up losing a number of them. Another weakness is the availability of the already established solar plants. These already-established businesses may have loyal customers who may be very difficult to convince and, thus, it presents a massive weakness for the company. There is a need to invest in the new technologies which can be used to enhance the use of more sophisticated techniques to help in the operation of the organization (Sunpower Corporation, n.d.).
With the coming of new environmental policies in the field, the company is supposed to come up with several modifications that can help them to effectively address the environmental issues and help in the effective operation of their business. Another strategy that the company needs to adopt for effective operation is the expansion of the market into rural areas and consider revising their price strategies to help meet the competition. The current situation for SunPower Corporation is still difficult to promote solar energy into the rural areas on a large scale. There is still no way to compare the cost of solar energy with thermal power generation, and it is not very stable in rural areas. The company is taking various initiatives to drive its growth, however. Technologically, the company should consider the use of light-sensitive nanoparticles, which is useful in the conversion of light energy to solar. Another technology that can be regarded as is the use of Gallium Arsenide material on their solar panel, which can be used to triple the solar PV system efficiency (Wielgosz et al, 2019).
“Our objective was to bring the cost down without sacrificing too much high efficiency,” said co-founder Dick Swanson during a recent podcast. SunPower Corporation’s focus on solar energy innovation has resulted in an impressive 600 patents being awarded worldwide over the last three decades, from the fabrication of solar cells to electronic components to mounting systems. Today it still holds the world record in the lab for large-area high-efficiency silicon solar panels: 24.1 percent; announced a third-generation platform for solar energy power plants that enables more efficient installation and operation, and energy management software that can provide powerful insights about energy use and financial savings (SunPower, 2017).
Other than the favorable budgetary position of saving money on vitality charges, introducing sunlight-based boards is a decent method to ensure nature. Since carbon emanations have arrived at record highs in many nations, sun-based vitality is a successful method for lessening these nursery gases. An Earth-wide temperature boost has caused a large portion of the atmosphere changes that the world is experiencing. With that being said, there are chances that the company is likely to enter the market and gain much more market share in the next five years. The future for SunPower Corporation is bright, but the road is not exactly paved.
Over the course of the semester, we conducted an in depth analysis of the current state of our environment while going over the main sources of harmful greenhouse gases and identifying its root causes. We decided to move ahead with the commercial and residential sector, as it is the largest contributor of harmful gases if you take the generation of electricity required to meet those needs. Taking a deeper look, we divided the sources into direct and indirect emissions. Most of the increase in global warming and greenhouse gases can be attributed to indirect emissions. We found out through our research that there are social barriers which prevent people from switching to newer technologies. To overcome this problem they must be given incentives to participate. Government does encourage people and companies to widely adopt green technologies and thinking and is a good sign towards the whole cause. They provide tax exemptions, provide full support whenever needed.
There are a majority of companies targeting different aspects of this industry. We researched the majority of them and, in the end, we chose SunPower to specifically see how they are tackling the issue of climate change through their products and services. They provide solar installations for all types of constructions whether it be home, corporate offices or big residential complexes, they design, install and provide after installation service for their products. Through their simple design and easy to install panels they have been able to penetrate the market easily. Also, their products enable their users to not just save electricity, but in fact, give it back to the grid, thus creating more energy than before. Their products bring that incentive that needs to be offered. They have been able to reduce indirect emissions by a significant amount and it is due to the effort of people and companies performing in these industries that we might be able to meet our goals set for 2050.
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