Regulus Solar Power Inc.: Price Demand Elasticities
(2 pages of text)
Case (Gen Exp)
Regulus Solar Power Inc., headquartered in Phoenix, Arizona, had continued to experience financial growth over the past decade, thanks in large measure to the environmental movement and declining solar panel prices. The expansion of renewable resources was one of the lynchpins of the environmental movement sweeping the United States. Since its founding in 2010, Regulus Solar Power Inc. had focused on installing solar powered systems throughout the Southwest United States, primarily on residential and commercial applications. By 2018, however, revenues had gone flat due in largely to the rapid expansion of the largest solar panel installer in the United States into Regulus Solar Power Inc.’s traditional marketplace. The company’s management team wished to examine the impact of lowering prices on revenues and assess the opportunities for more fully engaging environmental movement groups.
The case can be used in an undergraduate- or graduate-level course on economics or analytics. The case focuses on assessing the impact of solar panel installation price changes on overall revenues in relation to price elasticities, and examining the financial viability of a specific residential solar panel application. The instructor has considerable flexibility in emphasizing price elasticities, financial viability of solar power, and effects of the environmental movement. After working through the case and assignment questions, students will be able to
- recognize the growing demand for solar power;
- calculate price demand elasticity;
- understand the impact of price demand elasticity on revenue;
- develop a feasibility assessment for a given solar power residential application;
- establish a new pricing strategy;
- establish a plan to improve a company’s environmental movement image in the marketplace; and
- identify future trends in solar energy technology.
United States, Medium, 2018
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