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Business planning: solar installations take off amid trade issues

Business planning can get complicated, and it is often important to go with the flow, whether in New Jersey or elsewhere. Sometimes, when one side of a business or industry is in danger, another side offers an opportunity to succeed. That may be the case with solar panels. There have been many news stories over the last year about foreign solar companies, assisted by their own government's subsidies, imposing financial pressure on U.S. companies not able to compete with the below cost foreign production. Indeed, a group of U.S. manufacturers have brought a trade case, arguing that the claimed improper subsidies are simply part of an organized business planning effort to conquer the American market, and then raise prices.

But while U.S. solar manufacturers may be under attack, another side of the business seems to be thriving. Solar installations have taken off, in part by using the cheap foreign made panels with which U.S. manufacturers cannot compete. By utilizing foreign production in combination with available tax breaks and creative financing plans, solar installers are thriving in New Jersey and the west coast.

One New Jersey homeowner signed up for a solar installation at Home Depot after discovering the solar panels would cost him nothing other than a 20-year contract for energy services at a cost less than what he had been paying his local utility company. While the system would remain the property of the solar company, who would thereby be able to take advantage of tax incentives, the homeowner essentially ends up with a free service. And that may be business planning at its best. To be sure, there are murky waters ahead as the trade case against cheap Chinese solar manufacturers makes its way through government review, but in California alone it is said that more than 70 percent of residential customers have opted for a solar system this year by agreeing to rent the equipment or buy it over time.

Source: The New York Times, "Solar Installers Offer Deals, Gaining Converts," Diane Cardwell, May 9, 2012

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