Porter’s Five Forces Analysis of Solar Industry 

Solar electricity and power is the method of converting solar and sunlight energy into electricity either directly or indirectly. The indirect method employs concentrated solar power and; the direct method of utilizing photovoltaic cells. However, the solar industry outlines the mass-scale production, distribution, and retail sale of solar panels. Today, we’ll discuss Porter’s five forces analysis of Solar industry; the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Substitutes and Competitive Companies in Solar Industry

• Momentum solar
• Green home systems
• Elevation solar
• Palmetto solar
• Blue Raven Solar
• Tesla SunPower
• First Solar
• SolarEdge Technologies
• Canadian Solar
• Jinko Solar Holding

Porter’s five forces analysis of Solar industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Solar industry Porter’s five forces analysis of renewable energy source market business as follows;

Porter’s Five Forces Analysis of Solar Industry

Let’s discuss the Porter’s five forces analysis of Solar Industry as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Solar Industry

The bargaining of suppliers is Moderate and lower in the Solar Industry as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Solar Industry Porter’s 5 forces analysis of renewable energy source market business are as follows;

I-Solar Production Material

Some of the main supplies and materials required for the production and manufacturing of solar panels are as follows;

• Silicon
• Solar back sheets
• Plastic
• Organic photovoltaic’s
• Cadmium telluride
• Amorphous silicon
• Glass
• Aluminum
• Photovoltaic cells
• Semiconductor material

II-Many Solar Suppliers

Solar panel production materials and supplies are easily available in various countries world. Semiconductors, aluminum, glass, plastic, and photovoltaic cells aren’t the rare material elements; they’re easily available to solar panel manufacturers. However, the easy availability of solar materials and supplies decreases the bargaining power of solar suppliers.

Bargaining Power of Buyers in Solar Industry

The bargaining of Buyers is Higher in the Solar business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Solar business Porter’s five forces analysis of the Solar industry are as follows;

I-Large Solar Market

The solar energy-consuming customer market is very large and solar companies are aware of it. They are employing different methods of solar panel production to decrease production and manufacturing costs. However, the easy availability of multiple solar suppliers gives significant bargaining power to the customers.

II-Access to Information

Customers have access to the internet and media; they can easily find and search the multiple solar panel manufacturers in their area; their prices and their material quality. As a result, customers could make the most effective and better purchasing decisions based on the key market insight.

Threat of New Entrants in Solar Industry

The threat of new entrants is lower in the renewable energy source market business and Solar industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the renewable energy source market business five forces analysis of Solar industry are as follows;

I-Tech Expertise & Investment

When it comes to manufacturing solar power panels, then it requires significant tech expertise, tech equipment, tools, and machinery. Collectively, when you combine all of these costs and expenses, then it becomes a significant amount of high capital investment. The new entrants won’t have access to the high capital resources; it discourages the new entrants.

II-Mass Scale Production

In order to make the solar panel business profitable; the solar panel manufacturers need to procure the raw supplies and produce it at a mass scale. The mass-scale production and sale would decrease the per-unit production cost and help the company achieve profitability.

Threat of Substitutes to Solar Industry

The threat of substitute products and brands is moderate in the Solar industry as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the renewable energy source market business five forces analysis of Solar industry are as follows;

I-Multiple Solar Providers

There are multiple solar panel manufacturers and suppliers operating their business in the market. They all offer the same type of solar panels at almost the same market-competitive pricing. No differentiation and easy availability of solar panels would increase the product substitution rate.

II-Quality & Price

It is significant to mention here there are some cheap solar panel-producing companies are also available in the market. Lower solar panel price impacts the quality of the product in the long term. The price-conscious customers would buy cheap solar panels; the quality-conscious customers would prefer the top quality solar panels.

Competitive Rivalry in Solar Industry

The competitive rivalry among Solar panel companies is very high in the Solar industry as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the renewable energy source market business five forces analysis of the solar panel industry are as follows;

I-Competition & Competitors

There are multiple solar power panel manufacturing companies operating their business in the solar industry. Jinko Solar Holding, Tesla SunPower, Momentum Solar, and Blue Raven are some of the top companies along with many others. They have earned a significant market share and growth rate in the solar industry market. Their market presence has made the retail solar business market highly competitive; it has become highly difficult for them to retain and increase their market share. It could only become possible if they develop the new low-cost solar power production technology.

Conclusion: Solar Industry Porter’s Five Forces Analysis |5 Forces Analysis of Solar Industry |Competitive Forces in Strategic Management 

After a careful study of Porter’s five forces analysis of Solar Industry; we have realized that solar power panel market is growing at an exponential rate worldwide. If you are learning about the Solar industry 5 forces analysis of renewable energy source market business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.