14 DAY TRIAL // Skeptics often forecast that solar industry is threatened to end up in a so-called “death spiral.” It's a fact that shrinking profit margins have created a hard time for small businesses to survive on the market, but experts say that this situation represents a normal stage of the entire evolution.
One of the most well-known companies which operates nowadays on the market of solar power, Canadian Solar (CSIQ) has announced on October 17th that, due to a significant growth in the industry and the popularity of some components, their profit is about to go to under 12% by the end of this year.
Despite this fact, officials estimate that their industry is expanding 10 times faster than the average rate of the entire US economy. Further more, they expect that their company will compensate what it is losing in profit with a considerable evolution in volume.
Needless to say that experts figured that this is the normal path for every field of activity which tends to increase its level of maturity.
In fact, most of the major companies which succeed to be competitive on the market manage to survive while reaching profit rates below 12%.
Fortune/CNN 2009 made a list that highlights the profit margins for every industry we might think of: from Internet services and retailing to airlines and real estate. Solar power isn't one of the fields of activity featured in this list.
If we take into consideration the numbers provided by manufacturers and important companies on the market which talk about their 12% profit margins, we would be able to place solar industry on the 6th position, among 52 other profitable fields of activity.
Which is actually quite impressive for an industry that is expected to enter a death spiral.
Scientists think that renewable power coming from the sun will most likely become one of cheapest sources of energy of any kind, by 2018.
Furthermore, experts warn that the companies which will be able to survive on the market will still face shrinking profit margins for a while, until this field of activity becomes more mature and better adapted to the present infrastructure.
Even though enterprises may experience difficulties surviving at this point in time, the public opinion should take into consideration that such kind of green energy implies the creation of 100, 237 for individuals in the US, and it still has a lot of potential to exploit, compared to the coal industry's limited abilities of employing only 80, 600 Americans.