Emerging Management Paradigms, Spring 11

This morning NPR reported on a California company, Solar City, that now has a leasing program for solar panels. This program focuses on our class taxonomy’s so-called “sweet spot,” providing a good value right away to light-green customers. NPR reports that electric bills plus leasing costs are lower than what customers used to pay for just their electric bills. But like most of the other programs that we studied in this segment, Solar City still can’t make this program profitable for the customer without subsidies. Currently the program only offers the leasing program in areas that have tax breaks and governmental rebates – NY, NJ, PA, CA, MA. The goal is for “economies of scale to eventually kick in and make solar panels affordable without the incentives.” This example seems pretty analogous to our in-class example of municipal subsidies for ZipCar.

The question remains: are economies of scale enough to make these companies profitable without governmental help?