Business concept proposal - Solar Power Generator for independent houses

1. Business concept Proposal
N C SRIRAMAN

2. Business Idea 1: E Education for Indian schools
In India the school children are burdened with the curriculum and books they need to carry every
day. They need to study and carry back the books home for the home work. Especially for the
children from age 6 to 16 the burden is very high. The project is to simplify the Books and
replace the teaching curriculum with Smart Reading using Tablet PC
Advantages:
• Smarter way of learning subject
• can be interactive
• Teachers also can get benefited as they need to prepare the course material and keep update
every year. The work is simple
• we can look at Continuous assessment
Disadvantages:
• We need whole lot of infrastructure at school. Including the smart teaching tools. Today schools
lack even basic infrastructure
• End of the day final year exam students got to write the exams on paper and pen. If people are
used to Tablet replies it is difficult for them to write on one fine day.
• Enormous course material need to be digitized and collated and it needs lot of effort
• Summarize the competition.
• Outline your company’s competitive advantage.

3. Business Idea 2 : Solar Power for independent homes
Solar Power for residence (Hybrid)
To provide to independent houses Solar Based Hybrid power to the extent of 3KVA which
can take care of around 10 Lights 3 fans, Computer, 2 Air conditioners / Heater which is
good enough for a family.
Advantages
• + Low cost uninterrupted power for home
• + Govt Power takes control if the solar power is not sufficient to light the whole night (
Hybrid)
• + Save money due to high electricity cost by Govt or operators
Disadvantages
• Initial high investment ( one time though)
• Non sunny days if any we need to switch to normal power . This means we cannot
dispense away from Govt Supply or private operator power supply

4. Final Decision and Rationale
• Looking at the Pros can cons of both the proposal I decided
to go with the solar power generation for homes.
Reasons
a. The government plan to add 78,000 MW of power
capacity by the end of the 2020
b. Solar is ideally suited for India as we get more
sunshine in many part of India especially south India
all through the year
c. More Luxury constructions are coming up every year
especially villas which needs the alternate power
d. Power is priority sector for the Government and it
gives lot of Soft Loans to companies who work on
solar energy business. Bank gives the tune of 1000 K
Indian Rupees as unsecured loan for this sector

5. CVP – Solar Homes
Domestic needs are pretty different . We can classify the needs of the people under the following
category
• Independent Houses with single Phase 3 KV capacity
• Independent Houses with Three Phase 3 KV capacity
• Small Apartment for common lighting purpose ( without Lift) and water pump
• Medium Apartment with Common Lift and Lighting
• Large Apartment with multiple Blocks with common lighting and Lifts4
• Solar power for Club House in apartment complex
• Solar power for Club house for the tourist destination
The needs will be
• Clean Solar power with Capacity of 3KV and 24 Hours ( with out Back up)
• Hybrid Solar Power with capacity of 3KV and 24 Hrs backup with Normal Power as back up
• Coming to customer segment part of it
• High income Group with large villas
• Middle class and higher middle class segment whose buget to build a villa for 10000000 INR to
15000000 INR
• Budget Homes with Cost of villa purchasing power of 7500000INR to 10000000 INR
• 10 years warranty for the solar panels and one year warranty for batteries

6. Solar Homes – Target segment
For our consideration i am choosing the subsector with only following requirement
Independent Houses with single Phase 3 KV capacity
Hybrid Solar Power with capacity of 3KV and 24 Hrs backup with Normal Power as back up
Middle class and higher middle class segment whose buget to build a villa for 10000000 INR to
15000000 INR
The reasons are
Homogeneous segment
Purchase capacity of the product will be around RS 100000 to RS 150000 end price including
installation and commissioning
Target Price is around RS 100000 to RS 150000
Method of marketing is Direct Selling
Typical Target BOM cost INR 85000 ( including Batteries)
Installation Cost can be Rs 10000 per installation ( outsourced or Start a Service Arm)
Typical Target Margin will be around 30% on Gross Sales ( which is very good for a manufacturing unit)
.

7. Customer Benefit Typical ROI work out
To simplify the arithmetic we have assumed the following
– Investment Gives 4% interest from Indian Bank
– Life of infrastructure is infinite but we consider first 10 years
– Maintenance charges are not considered
– Govt Subsidies are not considered
– ROI based on Straight Line method
The customer will get ROI in 6 Years and after that his power generation is really free
comparison to alternatives?
• Alternatives is use normal Power from the Govt or private supply and pay the bll every month
• Other alternatives like Wind power is not possible for simple residences and BioGas based plant is not
possible for individual residences
Customer cost
one time investment 100000
Year 1 Year 2 Year 3 year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
expected intrest from Bank / Year 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000
Min Power needed / Year 2400 2400 2400 2400 2400 2400 2400 2400 2400 2400
pojected cost / year 6400 6400 6400 6400 6400 6400 6400 6400 6400 6400
Customer Savings in
Monthly Bills @ Rs 2000 per month 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000
Net possible Savings minimum 17600 17600 17600 17600 17600 17600 17600 17600 17600 17600
Possible ROI 5.681818182 years

8. Market entry & Value Capture
Market Entry
• I plan to approach independent House builder and add the cost of the Solar
energy product into his construction cost itlsef
• Advantages
• You get Bank Loan for the entire property including the solar set up. This will solve the down
payment issue
• Start with a place near my place of residence Bangalore India ( Silicon Valley of India) where
there is abundant solar energy and people with paying capacity and real estate is booming
• Test the product in one construction and then go for mass deployment
Value
I want to integrate our Smart Lighting solution the algorithm can be
patented and cost of the same can be recovered as part of
installation and commissioning

9. Financial Plan
We will need seed capital of Rs 200000 for the project this will cover the basic cost of
first installation at your own home as part of trial run and also run as model set up
• Projected cash flow
T0 1 2 3 4 5 6 7 8 9 10 11 12
Seed Capital 200
expense
Office expenses 20 20 20 20 20 20 20 40 40 40 40 40 40
BOM 140 350 350
Total Expense 160 20 20 20 20 370 20 390 40 40 40 40 40
projected revenue 0 0 0 0 0 100 100 200 200 200 100 100
Cash Flow 20 -20 -20 -20 -20 -270 80 -190 160 160 60 60 -40
Cumulative cash flow NEED 20 0 -20 -40 -60 -330 -250 -440 -280 -120 -60 0 -40
Months in thousand Indian Rupees

10. Assumptions
• We make two prototype and show as Model House for marketing
• We are need to sell 10 units first year with 50% cash advance and 50% against installation
• Installation time is 30 Days
• BOM is 70% of the cost
• We will give to agency the erecting and commissioning of the equipment at extra change from
the customer so commissioning expense is not included in the computation
• Partners don’t take any salary for the first year
Management structure
• Director and Founder = Responsible for the engineering
• Director and Founder responsible for All others
• Admin or purchase assistant 1
• Directors are hands on
• Installation and commissioning need to be handed over to a Agency who are well versed
with the UPS installation and commissioning

11. Cash Flow requirement
We will need 200K INR as seed money which the
partners will bring we will need atleast 500 K as
loan & Crowd Marketing

12. Risks and Rewards
RISKS
• Risk of product failures like Solar Cells will cost money
• Reliability of the product as it is expected to work 24 X 7 ( including Night)
• Weather conditions and damages : Typhoons and Ice Showers ( Thunder Showers) and
high wind effects
• Risk on technology itself on life
REWARDS
• WILL BE THE FIRST TO ENTER AND CAPTURE BIG MARKET
• GROWTH CAN BE VERY HIGH AS THE NEED FOR THE POWER IS ALWAYS HIGH
• WE CAN LOOK AT SOLARBASED CAR CHARGING STATIONS AS BATTERY BASED
CARS ARE ON RAISE
• WE HAVE PLENTY OF MARKET IN PUBLIC PLACES AND MARRIAGE HALLS ETC

13. Growth Plan for the next 5 years
0
50000000
100000000
150000000
200000000
250000000
1 2 3 4 5
Projection next 5 Years
Projected Sale turn over Projected operating cost Projected Profit Margin