5 Remarkable Things McKinsey Said About Solar Power And The Solar Industry | Exploring Markets

5 Remarkable Things McKinsey Said About Solar Power And The Solar Industry

McKinsey is one of the most popular and also renowned consulting firms in the world.

That is why it's hugely important to pay attention to what they say.

We recently stumbled across an article they published about solar and their comments were incredibly optimistic. Here are the 5 notes you have to see from their report:
1.) "Wal-Mart Stores has stated that it will switch to 100 percent renewable power by 2020, up from around 20 percent today. Mining and defense companies are looking to solar in remote and demanding environments. In the hospitality sector, Starwood Hotels and Resorts has partnered with NRG Solar to begin installing solar at its hotels. Verizon is spending $100 million on solar and fuel-cell technology to power its facilities and cell-network infrastructure. Why are companies doing such things? To diversify their energy supply, save money, and appeal to consumers. These steps are preliminary, but if they work, solar initiatives could scale up fast."

2.) "Google has been an active tax-equity investor in renewable projects, deploying more than $1 billion since 2010. It also will be interesting to track the emergence of solar projects financed online via crowdsourcing (the best example is Solar Mosaic, which brings investors and solar-energy projects together). This approach could widen the pool of investors while reducing the cost of capital for smaller installations, in particular."

3.) "The utility sector represents a fascinating example of the potential for significant disruption as costs fall, even as solar’s scale remains relatively small. Although solar accounts for only less than half a percent of US electricity generation, the business model for utilities depends not so much on the current generation base as on installations of new capacity. Solar could seriously threaten the latter because its growth undermines the utilities’ ability to count on capturing all new demand, which historically has fueled a large share of annual revenue growth. (Price increases have accounted for the rest.)"

4.) "As solar becomes more economic, it will create new battlegrounds for business and new opportunities for consumers. When a solar panel goes up on a homeowner’s roof, the installer instantly develops a potentially sticky relationship with that customer. Since the solar installation often puts money in the homeowner’s pocket from day one, it is a relationship that can generate goodwill.

5.) "...Companies in a wide range of industries may benefit from innovative partnerships built on the deep customer relationships that solar players are likely to own. Tesla Motors already has a relationship with SolarCity, for example, to develop battery storage coupled with solar. It is easy to imagine future relationships between many other complementary players. These possibilities suggest a broader point: the solar story is no longer just about technology and regulation. Rather, business-model innovation and strong management practices will play an increasingly important role in the sector’s evolution and in the way it engages with a range of players from other industries."

- Source: The disruptive potential of solar power: As costs fall, the importance of solar power to senior executives is rising