Chapter 11, Problem 22RQ

One of the 14 Grand Challenges for Engineering as determined by a National Academy of Engineering committee is “Make Solar Energy Economical.” According to the NAE website: The solar “share of the total energy market remains rather small, well below 1 percent of total energy consumption, compared with roughly 85 percent from oil, natural gas, and coal ... today’s commercial solar cells ... typically convert sunlight into electricity with an efficiency of only 10 percent to 20 percent... Given their manufacturing costs, modules of today s cells... would produce electricity at a cost roughly 3 to 6 times higher than current prices ... To make solar economically competitive, engineers must find ways to improve the efficiency of the cells and to lower their manufacturing costs.”

The following graph shows a breakeven analysis for a company panning to manufacture modular photoelectric panels. A copy of this graph has been provided online; you may use one of these graphs or use graph paper as directed by you instructor.

1. a. What is the fixed cost incurred in manufacturing the photoelectric panels?
2. b. How much does it cost to manufacture each photoelectric panel?
3. c. What is the sale price of one photoelectric panel?
4. d. If the company makes and sells 30,000 panes, is the^-e a net loss or profit, and how much?

   While the company is still in the planning stages, the government starts a program to stimulate the economy and encourage green technologies. In this case, the government agrees to reimburse the company $250 for each of the first 10,000 units sold.

5. e. Sketch a modified revenue curve for this situation.
6. f. Using this new revenue curve, how many units must the company make to break even’ Be sure to clearly indicate this point on the graph.
7. g. Also using the new revenue curve, how many units must the company make and sell to make a profit of $1,500,000? Be sure to clearly indicate this point on the following graph.