Marketing Essay Example: Market of Solar Panels in United Kingdom

Introduction

The demand for solar Panels in the United Kingdom has been rising since 2008. The government of U.K decided to provide an incentive to the citizens to tap solar power for use in the household. The dream to utilize the clean source of energy started 2006 in United Kingdom where 12 MW solar powers had been tapped. In 2011, the government had a vision of generating 74 MW of solar energy. As a result, the solar power projects in 2011 were 230,000 in U.K. Fortunately, in 2012, the power generated from the solar energy was 1000 MW, which was an achievement for the government of the United Kingdom. The EU agreement was to produce 15% of electricity from solar power by 2020 (Rezania, et al. 2014). The retailers in streets were stocking solar panels to meet the high demand from the household (Cubas, Pindado, & de Manuel, 2014). However, the question that remains is that, is the business of supplying solar panels still viable in the United Kingdom now? The essay seeks to assess the current market for solar panels in United Kingdom, nature of competitions and future market for solar panels in the country.

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Current market of solar panels in the United Kingdom

Ideally, there are favorable conditions that support the use of solar panels in the UK. According to the survey by the department of energy and climate change in the United Kingdom, the region has potential of harnessing a solar insolation of 1100 kilowatt-hour in every square meter (Cubas, et al. 2014). The assessment reveals the country of U.K has a potential of harnessing a solar insolation that can generate about 15% of the total energy in the country (Cubas, et al. 2014). The assessment regarding the possible amount of power from solar shows the power can meet the demand of the entire U.K. For example, the demand for power in Scotland is approximately 200, 000 MW which equals to the potential solar power in the area. The assessments were a source of information for the manufacturer of the Solar photovoltaic to increase the supply cater for the needs of the communities living in Scotland (Smith et al,.2014). Since 2006, the suppliers of the have invested in the business because of increasing in the markets for their products. Sharp is the eldest manufacturer of photovoltaic in U.K. Ideally, the government subsidies on the solar power generation has seen the demand for the solar power rising in the country. The Feed-in tariff of 2010 is still imperative in the market for the photovoltaic market in U.K (Winter et al. 2012). At moment, there are thousands of homes anxious to reduce their monthly electricity bill by installing the solar panels.

The advantages that motivate the rapid installations of solar power in U.K is that solar power is free, a clean source of energy and relatively cheaper. The homeowners require the capital for installations and enjoy a free power supply in homes. The U.K government sustains the vision of harnessing the solar power amounting to 15% of the total energy supply in U.K by 2020 (Mazumder et al.2013). The goal is a motivation for the government to regulate the prices of the solar panels further for the household. The homeowners with the potential of generating power that sustains the household can sell the excess of the power to the government to the main grid.

The collaborations of the government and the local people to boost the solar power venture increase the demands for the solar panels and installations in the country (Muhammad-Sukki et al.2013). Newark-on-Trent is the largest solar park in U.K. It produces approximately 4.9 MW-h and sells 560 kW to the national grid. Since 2011, the companies that produce solar power has increased and thus the venturing into business for the production of solar power is not a lucrative business in the present (Nugent, & Sovacool, 2014). Ideally, in the present, the prices for the PV are lower compared to 2010. The government pays the farms producing solar power at a rate of 8.9p/kWhr (Hirth, 2013).

The solar energy has employed above 30, 000 workers in the last few years. Ideally, the total investment in the solar power in 2015 was $161bn globally. With the rise in the rates of investments in the sector, it expected that the U. K would reach 100GW peak solar deployment in a year. In U.K, an approximate 800,000 homeowners are enjoying solar power (Greening,& Azapagic,2014). Last year, the government of United Kingdom gave a financial assistant to the solar firms and thus increasing the demand for the solar panels. Now, there is a high demand for roof-mounted solar, which is creating a large market for solar panels in the streets of U.K.

The government subsidy in the installations of solar panels is one of the forces creating opportunities for the suppliers of the photovoltaic (Edmunds et al. 2014). The government support to reduce the installations of solar power is massive and it will be hard for a future generation to reduce the cost further. Solar power, receive more government support in U.K than all other competing sources of energy. Survey shows that the European countries are allocating 12millin euros to the solar and a 1.5% supports the alternative sources of energy (Edmunds et al. 2014). The U.K markets for solar is facing competitions because the government support makes the prices for installations of solar panels affordable for people of different levels of income. It estimated that solar plants get small profits margins from the sale of solar power because the government pushes for relatively lower prices for the solar power.

The excessive government support had a great impact on 2013 when the government demanded a reduction in the prices of the solar panels (Greening,& Azapagic,2014). Now, there is an evidence of the advancement in the technology of in U.K making it possible to store solar power. The falling cost of installations of solar power and the increased capacity for storage increases the supply of the solar power in U.K. Besides, people are innovative in the solar industry following the increased in the government support for research on better ways of increasing the supply of solar power. For this reason, the suppliers of the solar panels are receiving relatively lower profit margins following the prices restriction by the government.

Viability of the market

The market for solar panels supply and installations is viable in U.K. Several factors promote the solar power business in the region. First, the government is focusing on beating the 2020 target. Second, it is the hope of the EU members to use 20% of energy from solar power (Ellabban, et al. 2014). Third, the government is pumping resources to the solar farms more than other sources of power. The domestic companies dealing in the supply and the installations of solar power in U.K are in advantageous positions because of the government support. For example, the U.K government is demanding for a reduction of prices of solar panels from China (Davis, & Martin, 2014). Ideally, when the government fixes the prices for solar panels, the Chinese solar panels are losing the markets because of small profit margins. However, it is advantageous for the local producers because of the support from the government. The productions cost for the solar panels in U.K is low because the government is monitoring the solar firms and proving the support they need to continue producing.

The majority of the households afford the solar panels in U.K. It is a parent that technology has made solar panels efficient for the population of U.K. As a result, many people are opting for the solar power, which further creation of a market for solar panels (Da Graca, et al. 2012). Now, the government of U.K encourages the people to use the clean source of energy. The government buys the excess of the solar power from the households. As a result, many households are investing the solar power generation to earn money from the government.

Solar power is relatively cheaper than other sources of energy. For example, the homeowners incur the installations cost and enjoy the supply of power for ages. The solar panels last for long before they become less efficient (Da Graca, et al. 2012). For this reason, the citizens of U.K are upholding the usages of solar power. It is predictable that the population of U.K will increase just like other countries around the globe. The rise in population is an indication of the increase in the market for the solar panels in U.K

Competitions

There are alternative sources of power in U.K that share the market with solar power. Despite the increase in the government investment on the solar power, the population uses the other sources of power such as coal, oil, windmills and hydroelectric power. The suppliers of the solar power are many in U.K following the government subsidy in the sector. The government is the only entity fixing the prices for the solar panels to make it affordable for all the households (Aman et al. 2015). The business has been lucrative following the creations of new markets in within the locality. There are domestic and foreign companies that supply and install the solar panels in homes within the United Kingdom. Since 2006, many companies have ventured the supply and installation of solar power. For example, in the market, many retailers sell solar panels to the households. The most popular retailer is Curry, Sharp, and the Chinese suppliers.

The venture has been lucrative since 2010 since the launching of feed-in-feed that made the photovoltaic affordable for the U.K citizens (Aman et al. 2015). Many homeowners began the installations of the solar power because of the solar panels available in many retailers stores. Some of the solar parks in U.K include language solar park, Westmill solar farm, and Martin Solar Farm and Toyota plant.

Future market Demand for solar panel

Ideally, following the current demand for the solar power in U.K, there is hope for a further increase in demand. In the last decades, the solar power in European countries has been developing. The government has put more resources on the development of solar power. The investors in the production of solar panels and installations have had their cost of production declined. Besides, many investors have invested in the industry because it has been the most attractive business opportunity in the region (Bahrami et al. 2016). There is anticipation of more investors in the sector following the increase in the number of firms buying solar plants and solar farms. The support from the government in the form Feed-in Tariff. The number of the supplier of the solar panels is expected to increase with solar panels that are more efficient. For example, the Chinese governments are increasing the production of solar panels to cope with price restrictions by U.K government.

There is anticipation that the technology involved in the production of solar panels will improve leading to the introduction of new solar panels that will replace the existing. Ideally, development in technology will create more markets for the solar panels (Desideri et al. 2016). The government of U.K aims to reduce the emission of carbon from the oil products. For this reason, it is expected that in the future, there will be an increase in the range of application of solar power. An increase the areas of application of solar power create more market for solar panels. For this reasons, the suppliers of the solar panels need to be optimistic and adapt to the new technology. In the past, storage for the solar power has been challenging in the solar power producing plants. However, with the creativity and innovation in the industry, there is hope for discovery for gadgets with better storage capacities (Bahrami et al. 2016). Consequently, th...