Goals of Subsizing Green Energy

Objective: To support the growth of ecologically sustainable companies that operate at economies of scale (large scale production) because that is a solid long term investment.

Economies of Scale- "The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods" (Economies Of Scale Definition | Investopedia).

3 Factors of Economies of Scale

• Specialization

• Technological advancement

• Dimension factor-large quantity

Solar City Business Model

"The company installs and owns the solar systems and then sells the electricity to the private companies that manage military housing at a discount of about 10 percent compared with utility prices, according to the company.

Solar City, for example, has installed solar systems at Davis-Monthan Air Force base in Tucson, Ariz., and it is working on a project at the joint Navy-Air Force Base Pearl Harbor-Hickam near Honolulu.

Lyndon Rive, the CEO, says by installing lots of solar panels in one area, the company has shown it can save money and turn solar power into a reliable business.

'It worked extremely well. It also allowed us as a company to get economies of scale on a concentrated area,' Rive said. 'There's a lot of inefficiencies when you have to go back and forth to different homes in different communities'" (Big Solar Project Moves Forward Without Uncle Sam : NPR).

Symbiotic Long Term Relationships

"Lend Lease, the company that manages the housing at both bases, says it's saving lots of money that it can use to build more housing and update existing units" (Big Solar Project Moves Forward Without Uncle Sam : NPR). Both the supplier and the consumer are benefiting from the relationship. The consumer saves money while the supplier earns a wage for producing a product that is good for the environment. Everyone wins.