This is a business concept proposal for a manufacturing business that will produce very low cost solar panels based on carbon nanotube technology. We will manufacture low cost, very affordable solar panels, to enable very poor households in Africa to access electricity for the first time in their lives. The solar panels are cheaper than any other alternative, yet so robust that no skilled installation or maintenance are required.
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Solar businessconcept2
1. Concept proposal for a
low cost solar panel
manufacturing business
Enabling poor African households to access electricity generated by
their own rooftop solar panels
2. NEED FOR LOW COST SOLAR PANELS IN
AFRICA, AND WHAT WE OFFER
• 200 million households in Africa has no access to electricity
• 100 million has electricity access but supply are very unreliable
• Currently there are a huge demand for small household solar panels to
power 3 key appliances (just enough to power a phone charger, a light
bulb and a kitchen appliance).
• We developed a very low cost solar panel system based on patent
protected technology (based on carbon nanotubes).
• Market research and actual market testing indicated at least 2 million
households are likely to purchase our units per year.
• Many low income customers will now for the first time enjoy privileges
of electricity.
3. MARKETING STRATEGY
• Market segment: low income African families who are home
owners (rather than renters) of informal or semi-formal (rather
than formal) houses, in off-the-grid rural areas or areas otherwise
deprived of reliable electricity supply.
• Positioned against competitors as:
• much lower priced
• more robust, durable, no maintenance or skilled installation
• In Africa it is very difficult to access and afford maintenance and repair
services, therefore robustness is essential
4. MARKETING PLAN
• Product features that stands out and important to target market:
• low cost
• easy to install and maintain even by laypeople
• linked to long life battery to ensure power supply at night and when cloudy.
• Price
• The cost price informed our price floor (must not be lower otherwise no profit will be made),
i.e. at least US$ 11 per unit.
• The highest price customers are willing to pay determined our price ceiling (must be lower)
i.e. $ 38 per unit as revealed by market research.
• Ideal price informed by positioning relative to competitors (we are positioned as lowest cost
option), i.e. around $ 24 per unit since the lowest competitors price are significantly above
this.
• Therefore ideal price is approximately $18 per unit, which were determined by the above
factord and demand curve (to maximise profit).
• Distribution
• In larger cities to be sold through home improvement stores, and in smaller towns and rural
areas through general dealers.
• E-commerce too poorly develooed in Africa for physical distribution, however, information and
promotional material will be distributed via chat services incl. Whatsapp and Wechat.
• Promotion
• Advertising on radio, i.e. main media to reach African customers, especially in rural areas.
• Publicity via radio and state TV programs related to technology, lifestyle and general interest
(electricity problems are major issue in Africa therefore will receive lots of publicity)
• c) Sales promotion techniques to adopt:
• Cash rebates to customers who recommend our solar panels to friends.
• 3 units for price of 2 for extended families (common in Africa).
5. CAPTURING VALUE AND INTELLECTUAL
PROPERTY
• Solar panel based on novel carbon nanotube technology protected
by patent.
• Global protection
• Monopoly by law and by trade secrets as well
• Not only illegal but also difficult to copy due to complex manufacturing processes
and advanced technology (therefore also protected by complex processes and bing a
trade secret)
• Exclusive distribution network arrangements
• Each local distributor will have exclusive rights at neighbourhood or local
level to keep them motivated to stock our panels
• Local distribution monopoly will avoid channel conflict
6. ADDITIONAL RESOURCES NEEDED
• Key relationships:
• Already have good relations with various senior African government
officials.
• Still need angel investors with experience in African energy markets,
distribution and regulatory environment related to building/solar pannel
installation.
• Team members
• Already have strong skills in solar panel design and manufacturing,
marketing and distribution.
• Still need skills in finance.
7. FINANCING NEEDS
• Already have $200 000, still need $300 000.
• Will be sourced from angel investors (angel investors to receive no
more than 60% equity).
• Cash positive in year 2.
• Breakeven in year 3.
• Return on invested capital: 22% year-after-year.
8. ALTERNATIVES CONSIDERED
• Several alternative business concepts were considered
• Solar panels on car rooftops, however, market too immature and demand
too small (market not ready yet)
• Solar panels for utility companies to generate large scale electricity for the
national power grids, however, this market is too specialised but we intend
to enter it at a later stage.
• Solar panels for poor households – this is the most viable alternative which
we decided to focus upon.
9. NEXT STEPS
• Development of full business plan.
• Complete patent registration.
• Approach angel investors and negotiate equity position.
• Opportunity exploitation roadmap:
• From year 2 we will enter market for solar panels in South
America, India and China.
• From year 4 we will exploit opportunities in solar technology for
commercial electricity generation by major power utilities in
developing world.