The paper will briefly explain the technology and analyze the impact on GDP, jobs/wages, productivity, demand, supply and any other economic principal or law that can be applied to this advance in technology.
Data and or quantitative analysis should be provided to support and prove your reasoning or position taken in the paper.
You are to apply economic principals and laws to explain the overall effect on our economy of the chosen technology. Your paper should be based on the economics surrounding the technology not on the technological specifications.
As it is apparent from the term, Solar Energy, it is energy generated by harnessing Sun’s radiation. It is one of the alternative methods or systems to generate energy. Recently, there has been an extraordinary emphasis on generating energy through renewable means (alternative means), such as solar-tidal-wind, as it has minimum impact on the physical environment. A large group of scientists claims that because of the excessive use of carbon-based fuel, there has been an adverse impact not only on the environment, but also on society and economy; the economic-social cost of production. Therefore, it is imperative to focus on alternative means to generate energy for the needs of the economy and society.
As the emphasis on alternative means of generating energy has increased, the efficiency of these systems has also increased. The changes in the design and evolution of technology have allowed devising a more stable system for the generation of energy, which has yielded new economic and social opportunities. For instance, the primitive designs had conventional heating systems with panels, rather than boilers, which are used in contemporary designs. These new solar systems can work efficiently at lower radiation zones because of their improved batteries and less energy wasteage It implies that these contemporary systems are cost-effective and no more limited to particular regions of the world (Keith, 2017).
Need For Power from Economy’s Perspective (Challenge)
Power is essential for the Industrial activity, which is directly linked with the growth of Gross Domestic Product (GDP). From a systematic study of economics we have learned that in manufacturing countries or emerging economies, power outages can badly affect GDP growth and may result in high unemployment. Also, because of the reduced production, imports increase that adversely affects Balance of Payment and foreign reserves. Therefore, large emerging economies are investing hugely in power infrastructure, so that they could accelerate their economic growth.
Challenges Associated With Conventional Means of Power Generation
The emphasis is on inexpensive conventional means of energy generation, such as hydropower projects; however, because of certain limitations, such as time and capital investment, governments are now opting for stand-alone solar systems. Also, conventional systems require transmission lines, which is also a cumbersome and lengthy process. Because of such limitations, many governments are not able to provide electricity to different regions of the country. For instance, because of these limitations, Kenya could not provide electricity to around 14 counties. These marginalized counties did not have access to necessities and because of that overall economy of Kenya was being affected adversely. It pushed the government to collaborate with the International Development Association, which financed the project of stand-alone solar systems to uplift these marginalized societies (The World Bank, 2017).
Statistics and Studies
According to the statistics, there are around 600 million people, Sub-Sahara region, who do not have access to electricity. It also implies that in this region, there is no industrial activity and people may rely on a primitive form of agriculture for a living. It contributes very less to the economy and may of the natural resources, which cannot be exploited because of the lack of industrial activity, are in idle form. Similarly, in countries like Djibouti, Eritrea, Ethiopia, Ghana and Haiti 46.7%, 45.8%, 27.2%, 78.3% and 37.9% of the total population have access to electricity, respectively. If we compare the size of GDP, of these countries, with those countries that entire population has access to electricity, we will learn that the size of GDP, of the mentioned countries, is quite small (Enerdata, 2017).
Studies reveal that there is a direct/positive correlation between economic growth and electricity. Studies assert that electricity or power plays a major role in economic growth. A study by Development Impact Evaluation (CDC) has inferred that because of power outages, South Asian countries’ economies have suffered a lot (CDC, 2016).
Solution
Numerous studies have suggested that conventional means of electrifying marginalized regions, within in a country or the region, will take enormous time, as conventional means are infected with bureaucratic delays, mobilization of resources and further investment in supplying electricity from the grid through transmission lines.
The most effective means could be offering stand-alone solar systems or Solar PV systems. There is a range of benefits of opting solar power. The foremost benefit is that these systems are ready/easy to install and take very little time in developing an independent power infrastructure. The second reason is that installing of off-the-grid Solar PV system will modernize power infrastructure, allowing developing countries to develop better and more modern means of generating electricity. It is evident that alternative means of energy, such as solar power, is a reliable future source of power generation, which is why this investment will pay good dividends. The third reason is that it can start providing stable power in the shortest of periods, which implies that it can have a direct impact on the economy in a very small period. It will give a boost to the economy and productive employment, because of industrial activity. The fourth benefit is that it will allow private companies to participate in the large economic activity.
With time, technology is evolving, which is making these renewable energy systems more stable, which is why they are now cost-effective and has little impact on the environment.
Conclusion
It is apparent from the studies that economic growth is linked to power and as the power infrastructure develops and modernizes, electricity is produced in large quantities at low cost (economies of Scale). Also, the expansion in size of the economy produces employment, which facilitates a country with stable both politically and economically. Solar Power alternative can produce desired results quickly and because of its efficiency, its applications are enormous. These systems have become stable and can produce electricity, in low radiation regions, at low cost without compromising on efficiency.
References
CDC. (2016, January). What are the links between power, economic growth, and job creation? Retrieved from http://www.cdcgroup.com/Documents/Evaluations/Power%20economic%20growth%20and%20jobs.pdf
Enerdata. (2017, November 1). GLobal Energy Statistical Yearbook 2017. Retrieved from https://yearbook.enerdata.net/electricity/world-electricity-production-statistics.html
Keith, J. (2017, October 1). Maximizing Solar Panel Efficiency and Output Power. Retrieved from http://www.electroschematics.com/8280/maximizing-solar-panel-efficiency-and-output-power/
The World Bank. (2017, July 26). Kenya: Off-grid Solar Access Project for Underserved Counties. Retrieved from http://projects.worldbank.org/P160009?lang=en
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