ENGINEERING ECO ANALYSIS W/STUDY GUIDE
ENGINEERING ECO ANALYSIS W/STUDY GUIDE
13th Edition
ISBN: 9780190693053
Author: NEWNAN
Publisher: Oxford University Press
Question
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Chapter 14, Problem 1QTC
To determine

How does deflation differs from declining price of solar technologies?

Expert Solution & Answer
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Explanation of Solution

In spite of inflation increasing more prices, the price of solar power is declining. Also, in contrast to fossil fuels, the cost of generating electricity from solar energy is driven by the infrastructure costs instead of the cost of the natural resources. Therefore, the costs and prices are more stable, particularly for large-scale electricity generation.

Historically, solar technologies have had high upfront infrastructure costs but low operating costs.

It is expected that within next two decades, the cost of solar technologies will be lower than the costs of conventional fossil fuel electricity technologies. These lower electricity prices can decrease inflation and contribute to increase economic activity and growth.

Deflation is decrease in the prices of goods and services thus leading to an increase in the purchasing power. So, the above mentioned is the reason why the deflation differs from the declining price of solar technologies.

Conclusion:

So, above is the difference between deflation and declining price of solar technologies.

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ENGINEERING ECO ANALYSIS W/STUDY GUIDE

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