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Business Plan for solar installations

Analysis of Solar Energy Industry in India & Its Future Prospects:

The Indian solar energy sector has been growing rapidly, in the past few years, majorly due to Government’s initiatives such as tax exemptions and subsidies. Due to technical potential of 5,000 trillion kWh per year and minimum operating cost, Solar Power is considered the best-suited energy source for India. Todaythe Solar power, has an installed capacity of 9.84 MW which is about less than 0.1 percent of the total installed renewable energy of India’s~ currently total installed renewable energy stands at 13,242.41 MW as per MNRE. India's power sector has a total installed capacityof approximately 1,46,753 Megawatt (MW) of which 54% is coal-based, 25% hydro, 8% is renewable’s and the balance is the gas and nuclear-based. Power shortages are estimated at about 11% of total energy and 15% of peak capacity requirements, which is likely to increase in thecoming years. The cost of production range is Rs 15 to Rs20 per unit for the solar energy, which is very high whencompared to, Rs 2 to Rs 5 per unit for other conventionalsources in India. Much of the country does not have an electrical grid, so solar power will indeed be a boon forwater pumping, to begin replacing India's four to five million diesel powered water pumps, each consuming about 3.5 kilowatt of off-grid lighting. Solar energy technology consists of solar thermal technologies, which utilize sun’s energy and solar photovoltaic technology, which convert solar energy directly into electricity. According to the 11th five year plan, the government of India projects a massive expansion in installed solar capacity, and aims to reduce the price of electricity generated from solar energy, to match that from fossil fuels like coal and diesel by 2030. MNRE has set up target to add 14500 MW by 2012, from new and renewable energy resources out of which 50 MW would be from solar energy. India has received committed investments to the

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tune of US $7 Billion and additional to come in through the FDI and private sector route.India has been ranked 7th worldwide for solar photovoltaic (PV) cell production and secure 9th rank in solar thermal power generation. This capacity is growing rapidly due to the entry of various private players in manufacturing of solar energy equipment. According to theauthors, the Indian solar energy sector is estimated to grow at 25% year on year in next few years. With this rate the global market is likely to exceed the annual production mark of 12 GW during the year 2012. Likewise, the Indian market demand is expected to reach 200MW by the year 2012. The implementation of the three-phase planfor solar PV capacity expansion is expected to begin thisyear in 2010, with the Indian Government spending approximately US$20 billion over a 30 year period.

India’s Mission In solar energy:Announced in November 2009, the Government of India

proposed to launch its Jawaharlal Nehru National Solar Mission under the National Action Plan on Climate Change with plans to generate 1,000 MW of power by 2013 and up to 20,000 MW grid-based solar power, 2,000 MW of off-gridsolar power and cover 20 million sq. meters with collectors by the end of the final phase of the mission in 2020.[18] The Mission aims to achieve grid parity (electricity delivered at the same cost and quality as that delivered on the grid) by 2020. Achieving this target would establish India as a global leader in solar power generation.

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Jawaharlal Nehru National Solar Mission:

Goals: The objective of the National Solar

Mission is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The immediate aim of the Mission is to focus on setting up an enabling environment for solar technology penetration in the country both ata centralized and decentralized level. The first phase (up to 2013) will focus on capturing of the low hanging options in solarthermal; on promoting off-grid systems to serve populations without access to commercial energy and modest capacity addition in grid-based systems. In the secondphase, after taking into account the experience of the initial years, capacity will be aggressively ramped up to create conditions for up scaled and competitive solar energy penetration in the country.

Timeline:The Mission under the aegis of Ministry

of New and Renewable Energy [5] will adopt a 3-phase approach, spanning the remaining period of the 11th Plan and first year of the 12th Plan (upto 2012-13) as Phase 1, the remaining 4 years of the 12th Plan (2013–17) as Phase 2 and the 13th Plan (2017–22) as Phase 3. At the end of each plan, and mid-term during the 12th and 13th Plans, there will be an evaluation of progress, review of capacity and targets for subsequent phases, based on emerging cost and technology

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trends, both domestic and global. The aim would be to protect Government from subsidy exposure incase expected cost reduction does not materializeor is more rapid than expected.

Solar resource in India:From the Indian solar resource map below it can be

observed that it had a great capacity to produce up to 6Kw per day per every meter in some areas and on an average the power that can be harvested is around 3.5-4Kwper each meter per every day. And almost 75% of the country’s geographical construction is very favorable to solar power harvesting, this proves the limitless opportunities for every one thinking solar and this is

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backed up by Jawaharlal Nehru national solar mission and MNRE.

ANDHRA PRADESH, which is the point of interest for first ten years of our company, has the capacity to generate 4.5 to 5 units per every sq. meter per every day. Which is a lot for residential and business customers.

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Aims(0-8 years): Sell and Install solar power packages to

local customers Expand the business to industrial level

customers. Responsibility towards servicing and subsidy

factors Be the best and biggest solar supplier in NEW

ANDHRA. Gaining Trust, Goodwill, Experience for

vision to make it real.Company will not make customer to work for any thing including subsidies and any other factors that may involve.

Vision (8- life span): To install solar power plants and to have at

least 10crore turnover each year. Nationally recognizable company and provide

best services all over country.

Life span, Market and profitability:The life span of the company will be endless

as the requirement of power will always be there and due to exhaustion of natural resources the point of interest now will become need and necessity for future and this continuous demand of power and increase in population will be the life of this company.

Profitability is expected to be high in the business due to high market, government interest and development of Guntur as new capital will lead to many projects which need high volume of solar power backed by less hydro power which is

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result of state division. Both INDIA and ANDHRA PRADESH are ready for this change now as the failures of previous business people is due to the state being not ready for this big change. The new PM and CM are both promising in development and solar power which is observed from Gujarat state development. And the awarenessof people and rise in literacy rate will act as fuel for our company.

Success Strategy: The only way to obtain success is to provide best service obtain people confidence and publicity there are no big solar power suppliers in New Andhra Pradesh we have to be the new big company to gain success. There is no margin for compromise or failure. Main plan is to employ my knowledge and experience obtained from abroad andreading peoples psychology. With the help of experience and feedback from local people, the first few months includes installing sample street lamps in important places to gain peoples interest.

Detailed strategy will be provided after first installment of investment is provided.

Project Justification:Advantages to the customer -

1) Save on bills paid for power consumption of the entire household or commercial building.2) The excess Watts generated by the solar equipment can be sent back into the grid. The

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Government might pay for this under certain conditions. This would bring in long-term passiveincome.3) Contribute to a greener environment.4) Get free rewards for referring another customer who closes a sale.5) Involve in a noble cause, where part of the profits would be used to set up free panels in Government hospitals, schools and police stations.(Marketing Strategy)

Project timeline and key milestones: Name registration of the company renting

office should be dealt by 2nd week of JULY. Stock and Marketing, Recruitment elements

should be dealt by AUGUST. First orders should be expected by end of

AUGUST. Start installing products and gaining trust

and favor are main elements till December will providing various services and installations.

Expected to start big orders by January Next year.

Setup a high-quality website, complete with images, blogs, articles and other useful information.

Launch an online marketing campaign with Google AdWords and Bing Ads.

Launch offline promotional campaigns to spread awareness and market the products.

Hire an experienced law firm to research and negotiate Government subsidies for the supplier and the customer.

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Start installations and create customer profiles to maintain long term relationships,collect feedback and research

COMPETITIVE ADVANTAGE:There are 10 solar companies In whole of

Guntur which are very small and not efficient or sufficient to meet the requirement of vast population of Guntur. However, with effective marketing and awareness-building initiatives, we can cater to the increasing demand of the urban market.How will our company be different:

We will offer high-quality equipment with excellent services. The existing companies are not effectively marketing to interested crowd (such as online searchers) and convertible crowd (a MNC employee who does not mind investment, when the benefits are explained). The profits will fund other innovative projects such as Solarcharging points, free installation in Government buildings expecting a favor for starting a Solar power plant based on reflective technology. The Indian Government is keen on building such alternate power sources and has special schemes as well. TO achieve all there shouldn’t be any compromiseor external interference and the rules set beforestarting must be accepted, respected and followed.

Advantage Sustainability: competitors can be dealt with and success can be repeated if marketing is done smartly. The increasing number of buildings in Guntur and Andhra Pradesh and the high-

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spending corporate culture will appreciate savings in electricity bills if advertised based on their unique situation. If we can also help them to earn passive income by sending excess power to the grid, this will help more word-of-mouth marketing.

RATIONALE FOR THE DEAL:Opportunity: Upscale market and real estate boom in the city is very open to green technology. Apart from residential installations, we could also branch out into corporate deals since most MNCs are already involved in green initiatives. There is a large demand for more powerful solar equipment that is not available in India.Revenue: Sell the Solar panels and other accessories. Imported inverters that can serve asenergy back up are always in demand. Lease & Rent-to-OwnFinance offer options will be considered so that some customers will enjoy the benefits of a solar energy system without having to purchase up front. Our sales representatives will look into a finance option that is tailored to customer's needs, including low to no down payment and low monthly installments.Other Players: No other companies in India markets products such as we do and we should always be innovative.Experience: I have experience in designing and marketing field as I spent my 6 years of life dedicated to designing and 1 Year of marketing inUK. Sure the odds are high but favorable in our side I will give my 100% and promise success whenI am responsible and the final decision is mine.

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I do not have experience and am immature while dealing with government matters and need guidanceand help in this field. Recruitment in this fieldmay be considered.

Investment Plan: Costs included in registering a company Costs for renting an office for the period of

at least 6 months. Costs for staff and transport, Advertising,

Marketing and miscellaneous 5 Lacks for first3 months.

Cost of equipment and customs for 20 KW 15 Lacks

Promotional Installation costs 2 Lacks. After proven success using local suppliers,

more funds are required to import quality equipment and advertise them. International shipping, warehouse, dedicated team of engineers, experienced staff, website, law firms and other such requirements need additional funds.

Sale price will be 130 INR per watt until 2 Kw, 110 INR per watt until 4Kw and 80-100 for higher based on power requirement and battery.

62.5% of total investment should be released after making partnership deed, into company bank account. (25 Lacks) and second installment will be taken with in 4 months time.

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Opportunity to Investor:25% share in the company will be awarded which will

promise ROI with in maximum of 3 years and profits from there on till company lasts. If the investor is interested in debt investment we can look at an ROI of 18%annual interest with an expected payback periodof 5 years. Total investment required will be 40 Lacks.

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