In Tom Randall’s Bloomberg article “Wal-Mart Now Draws More Solar Power than 38 US States”, Randall describes Wal-Mart’s newest strategic move to gear the company towards future success. Wal-Mart has begun to take advantage of the vast amount of space on the roof top of their monster stores to generate solar energy production. They had a 40% surge in installations in the second quarter of this year, and they now have access to more than 89 megawatts of capacity for solar energy capacity, which is enough energy to power 22,250 US homes.
The article compares Wal-Mart’s adoption of solar power generation to its decision to sell beer in its stores. When Wal-Mart decides that an endeavor is going to be profitable, they throw themselves head on into the movement. Prices of solar panels have fallen 60% since June 2011, and solar panel installation prices have fallen 30%. This means that Wal-Mart has taken advantage of the cuts in costs to be on the forefront of the mega store movement to produce solar power. With so many units already in place, the company is strategically positioned to sell solar power at reduced costs to consumers. Although this may cause other stores to not be able to produce solar power profitably, it would be good for the consumers who are buying cheap solar power. Could this be a monopoly that has greater consumer surplus than the alternative competitive market?