N EDISONPEST and Porter's Five Forces AnalysisPEST AnalysisThis section applies the PEST analysis framework to understand the macroenvironment and considers the renewable energy industry as a whole complex within the current political and economic context, socio-cultural and technological landscape. Political/Legal Factors The future of the U.S. solar energy industry will be shaped not only by economic growth, but also by the rate of decline of petroleum resources and global awareness of the consequences of human-induced climate change. Policy responses to this realization in the United States include; new policies, laws and tax incentives for both businesses and private households to promote growth and investment in the solar energy sector. U.S. policy and legislative developments regarding solar energy include the SunShot Initiative, the American Recovery and Rehabilitation Act (ARRA) of 2009, and the Energy Improvement and Extension Act (EIA) of 2008. The SunShot Initiative is was enacted in February 2011 and aims to "make the total cost of solar energy fully economically sustainable for everyday use, so that all Americans can benefit from this clean energy." renewable energy source.”1 ARRA has invested $114 million in the solar energy sector for research and development of photovoltaic systems, solar energy concentration and deployment of high-penetration solar energy.2 ARRA and the EIA have created tax credits for homeowners and businesses for their investments in solar energy.3 Implementation of these policy and legislative initiatives promotes the growth and development of the solar energy industry and therefore has a positive impact on Sun Edison. Economic Factors Economic factors affecting the solar energy industry are... middle of paper... ....giving away crystalline silicon and vertically integrating their manufacturing process, thus further weakening the bargaining power of suppliers. Threat of substitutesThe threat of solar energy substitutes is very high. Solar energy is mainly used for electricity generation, making the range of replacement products quite broad as many types of energy sources can also generate electricity. The major substitutes for solar energy are nuclear energy and fossil fuels: coal, oil and natural gas. While these are not renewable energy sources, they are considered substitutes for electricity generation. Solar energy also faces many substitutes in the renewable energy sector. Wind, hydroelectric, bioenergy and geothermal energy are all substitutes for solar energy in electricity production. Intensity of Competitive Rivalry Sun Edison operates in the semiconductor industry