Sunpower Simulation Paper

Introduction

This assignment is aimed at the analysis of various simulations that are completed for the SunPower Company over a period of 18 years. The data points that will be analyzed include the production price, investment cost for process improvement and current data on the company’s place in the market. Similar to the previous 2 assignments we will have 4 decision points; 2008 – 2012, 2013 – 2017, 2018 -2022 and 2023 – 2025. However for this simulation, Sunpower will face new competition that has entered the industry.

Background

With sustainable, alternative sources of energy such as wind and solar PV panels being produced they are contributing more and more towards the public overall demand. The solar energy in the US and other nations are increasing at a rapid pace, in terms of

The resulting graphs for module price and unit direct cost are shown in Figure 1 below:

Figure 1: Module price ($/kWh) and unit cost ($/Peak Watt) during 2008-2012. Red corresponds to Sun Power and blue corresponds to all other competitors It can be seen that module price of competitors varied slightly, remaining near $0.15, unit cost for Sun Power decreased gradually to $2.47 while that for other competitors decreased to $2.04 by year 2012. Sun Power market share increased to 4.82% over these 5 years, which is to be expected given reputation over the competitors. One new competitor entered the market offering a lower unit cost of $2.02 and gained a 0.88% market share. Entry of the new competitor signified that the market conditions were favorable during this period and they were able to successfully develop the PV technology (process development cost for the competitor was significantly higher than Sun Powers cost of $29 million), which contributed to increasing the competition in the market. A few key metrics during this period are shown in Table 1