Introduction The energy and economic crisis has intensified the search for viable alternative power source. The search has opened the door for new business opportunities, for instance; the development and installation of wind turbines; electric vehicle charging stations; and a myriad of solar business opportunities. There are several solar industry opportunities to choose from; retail and wholesale distribution, after-market products, installation and repair, and other service oriented businesses. To aid in our entrepreneurial decision making in entering the solar industry, we have researched the following macroeconomic areas; GDP growth rate, interest rates, level of unemployment, business cycle, fiscal policy, monetary policy,
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However, there is a long way to go before the U.S. can substantially narrow the gap with Germany. The ideal GDP growth rate for the U.S. is between 2-3%, for 2013 the rate was 1.9%, a decline from 2.8% the prior year. The solar industry alone may not have a large influence on GDP, however, as a whole, renewable energy may have an effect on GDP (Taverberg, 2012). Since 2010 the GDP rate in the U.S. has been 2.5, 1.8, 2.8 and 1.9 respectively, a stable and suitable average. Caution, too much growth can have a dangerous effect because it will most likely come with an increase in inflation.
Interest Rates Interest rates play an important part in decision making, whether it’s a new business owner requiring a loan or an established business trying to maximize its profits. High interest rates can eat into profits, delay borrowing for capital projects and prevent hiring new employees. Falling interest rates on the other hand means that consumers will have more money in their pockets to spend. The increase spending will increase the demand for goods and services. To keep up with the increased demand, businesses will borrow to improve capabilities. The current low interest rate is another reason why the time is favorable for solar industry expansion.
Graph 4 Graph 4 shows the relationship between the interest rate and inflation rate, the rates are linked. The Federal Reserve controls the interest rates, the lower