Business Plan for Solar Installation Project Assignment Sample

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1.0 Introduction

1.1 Overview of the Organization

In the present time, India has been engulfed by the scarcity of energy that is certainly casting a negative spell over the industrial, economic and social aspects of the nation. Therefore, in order to overcome such issues the authorities have shown inclinations towards the utilization of renewable energies such as solar energy. In this regard, many solar energy plants have been established in different states of India. Green Global Solar Private Limited can turn out to be such an instance. Its foundation stone is situated in the Trisshur district of Kerala. This organization intends to provide solar electricity to the inhabitants of Kerala that is in a later phase subjected to be distributed to the other districts as well.

1.2 Offering Product and Services

Green Global Solar Private Limited has planned to enter the industry with a variety and products and services so that the customers can be convinced to trust the farm and buy their products. The first and foremost service that this proposed farm plans to offer is the providence of solar energy to the homes of Kerala with the hope that people will prefer solar power as it is cheaper in price. Moreover, the proposed company has the intention of availing the people with solar water heating systems, solar operated air conditioners, solar water pumps, solar lights etc. that can come handy in their daily purposes.

1.3 Financial Consideration

While setting up a business in any industry a handsome amount of money is under utmost necessity to be invested in the first place. Solar energy sector is no such exception. Therefore, Green Global Solar Private Limited has estimated an amount of 10 billion Indian Rupees that the farm is planning to invest in this year so that a strong base on the part of the farm can be formed. Furthermore, the proposed organization has a design in mind of investing 50 million and 30 million Indian Rupees respectively in the financial years 2018-19 and 2019-20. The following chart provides a graphical presentation of investment plans:

Figure: 1. Investments Plans of Green Global Solar Private Limited for next Three Years

(Source: Author)

2.0 Mission Statement

The prime mission of Green Global Solar Private Limited is to offer solar energy amid Indian citizens for reduce electricity consumption rate. 

3.0 Vision of the Proposed Business

In order to underline the vision of this proposed firm is to build India ecologically sustainable through reduce uses of renewable energy, which may help India to address its energy security associated challenges.

4.0 Objectives

4.1 Marketing Objectives

Through introduce of solar installation services Green Global Solar Private Limited is intended to make Kerala completely solar city. At the same time, the proposed business firm also wanted to expand its solar services around entire India by offering uninterrupted solar electricity services. The below stated objectives will underline the prime marketing objectives of Green Global Solar Private Limited:

• To make Kerala almost 80% solar city
• To build 20% of total India solar energy dependent

4.2 Financial Objectives

Similarly, in order to underline the financial objective of the proposed business; it can be stated that the organization will try to reduce the cost of solar energy. In this context, Green Global Solar Private Limited will precisely focus towards establishment of cumulative photovoltaic capacity in case of its solar installation process, which will increase the solar energy produce capacity by 40 Giga Watts (GW) and it also increase the supply of solar energy by 1% than that of average capacity. The following points will define the financial objectives of this proposed business firm:

• To reduce the cost of solar electricity by 10%
• To enhance profitability by 20% in every Fiscal Year (FY)

4.3 Socialite Objectives

Moreover, in order to highlight the socialite objectives of this proposed business, it can be stated that the solar firm is intended to reduce the consumption of renewable energy and make India ecologically sustainable. The prime socialite objectives of Green Global Solar Private Limited:

• To enhance the production of solar energy
• To reduce the consumption of renewable energy

5.0 Current Market Situation Analysis

5.1 Internal Analysis

Internal analysis is the best possible way for understanding the prospects of proposed business plans in relation of the internal environment of a farm (Timilsina, Kurdgelashvili and Narbel, 2012). Therefore, for keeping symmetry between the proposed business and its available resources the SWOT analysis tools have been used thoroughly in the following manner.

5.1.1 Strengths

• Kerala being a tropical region has no scarcity of bright sunlight making the main resource easily accessible
• As the operations will be generated by farm's own production the overhead cost will eventually turn low
• No need or any power grids in solar plants will reduce the overall cost of the farm
• In a polluted country like India solar plants have great prospects as they do not produce CO2 during production
• Jawaharlal Nehru Mission Scheme's 30% capital subsidy scheme will function in advantage of the proposed farm
• Less involvement of big corporate in solar industry enhances the growth rates of new farms
• No abundance of resources will help the proposed farm providing never ending supply of solar energy

(Source: Ansari et al., 2013)

5.1.2 Weaknesses

• Installation of solar energy is quite costing making it a choice of the rich people
• Production cost of solar energy is higher in comparison to other energy sources
• In rainy seasons solar energy cannot be produced
• People are not much aware of the use of solar energy in households
• Maintenance cost of solar plants is very high with regular intervals

(Source: Ansari et al., 2013)

5.1.3 Opportunities

• High cost of oil resources will force the government to rely on solar power for producing electricity
• Protests against nuclear power plants will enforce dependence on solar plants
• Government awareness campaigns and provided subsidies on solar use convince the public to give though over using solar services
• Indian Government's investment of over 20 billion US Dollars in this industry will open up more opportunities for the proposed farm

(Source: Ansari et al., 2013)

5.1.4 Threats

• Comparative lower standard to solar cells produced in India may force the proposed farm to buy Uranium from Australia or Germany
• Indian farms are facing massive competition from the Chinese farms as they are more acute in nature
• People will not be interested to switch to solar energy as the conventional energy producing farms seem not to have any trouble in the near future

(Source: Ansari et al., 2013)

5.2 External Analysis

In case of conducting the external analysis the tools of PESTLE analysis has been used in the following way:

5.2.1 Political Factors

Though significant development in the solar energy sector in India has been noticed in the last 10 years, Kerala has turned out to be state that in spite of having abundant resources and possibilities has not progressed in this field. The lack of government enthusiasm on the subject is the key factor behind this situation (Timilsina, Kurdgelashvili and Narbel, 2012). The central government's investment of 20 billion US Dollars was supposed to be distributed among all the states evenly. Therefore, the responsibility of such situations can be put on the shoulders of the state government. This low allocation of budget and facilities by the government in Kerala can affect the farm. However, if the government cooperates with the farms efficiently in applying the policies and financing then this proposed farm has great potential to grow in Kerala.

5.2.2 Economic Factors

Kerala being a great location for industrialization, industrial expansion has largely taken place here. This has eventually increased the per-capita income of the sate and thus providing its inhabitants the financial flexibility to choose the type of energy production according to their preference (Timilsina, Kurdgelashvili and Narbel, 2012). The growth of GDP during the fiscal year 2010-15 may work in favor of the proposed farm. Moreover, the power consumption in states like Kerala has undergone huge increase in recent years and is likely to increase more in coming years due to industrial expansion. Therefore, to satisfy such demand of power Green Global Solar Private Limited can find itself in profitable state.

5.2.3 Social Factors

Kerala has a better literacy rate in comparison to the other states of India. The people here are more liberal and modern in accepting new technologies and alternatives. Hence, Kerala is provided with better possibilities to enable a solar energy farm to grow. Usefulness of solar energy can thus be interpreted and imbibed well by the public (Timilsina, Kurdgelashvili and Narbel, 2012). Now, if the awareness programs can be organized in the right manner then the attention of a large population of Kerala can be gained and by doing so the chances of running the business to this proposed farm will increase. The issues of joblessness and insecurity of food can also be handled by providing jobs in Kerala.

5.2.4 Technological Factors

At the present time power generation organizations are facing major problems in reducing the exhaling of Carbon-di-Oxide into the environment (Timilsina, Kurdgelashvili and Narbel, 2012). In such circumstances, a huge advantage can be achieved by the solar farms as they do not produce any CO2 during their production procedures. Therefore, it can be said that Green Global Solar Private Limited has immense potential to grow in this sector in Kerala because of such production process. Moreover, the urgent need of exploiting natural resources can also be satisfied through this type of production that the farm operates.

5.2.5 Environmental Factors

Social energy being a renewable energy does not create any industrial waste or pollution that helps in keeping in check the levels of water, earth and air pollution. Such power generator plants never affect the flora and fauna of the region and avoid all possible commotion with the environmental laws (Timilsina, Kurdgelashvili and Narbel, 2012). For such several reason the proposed farm can certainly attain success.

5.2.6 Legal Factors

The constitution of India consist such acts and laws that provide solar power plants high advantage. The National Electricity Policy of 2005 and National Tariff Policy work in favor of solar plants (Timilsina, Kurdgelashvili and Narbel, 2012). Hence, the proposed farm has great prospects in this state. The desired implementation of Jawaharlal Nehru Solar Mission in this state will ensure new opportunities for farms as such. The proposed farm will not face major legal issues as it is not dangerous to environment.

5.3 Industry Analysis

Porter's Five Factors model has been used for the purpose of conducting an apt Industry analysis. The process is described below.

5.3.1 Bargaining Power of Suppliers

A company's success depends largely on the bargaining power of the suppliers. The more the suppliers will charge money for their supplies the more the overhead cost of the company will increase. As in solar power sectors there exists low number of suppliers therefore the suppliers do not bargain much as that would affect their business (Timilsina, Kurdgelashvili and Narbel, 2012). A solar plant only has to deal with the suppliers in an initial stage of buying the production equipments. Hence, as Green Global Solar Private Limited has already set a huge budget for their initial operations they will eventually get rid of the issues of supply and their business will run in smooth consistency.

5.3.2 Buying Power of Customers

As solar power sectors in not a popular power generation sector therefore the producers always try to keep the price of the products and services to minimum level so that the customers can be attracted. Kerala being an economically stable state comparatively due to its different business fields enables the people a standard buying capacity (Timilsina, Kurdgelashvili and Narbel, 2012). Moreover, the growing per-capita income has also enhanced the buying power of the customers in the region. Hence, the people of Kerala can switch to solar energy if they find it suitable.

5.3.3 Competitive Rivalry

Competition in the market place determines the future possibilities of success for a solar firm. In present circumstances the abundance of solar power plants in Kerala may help the proposed firm attain success (Timilsina, Kurdgelashvili and Narbel, 2012). As there is minimal rivalry in the market the company will be assured of getting a major number of possible customers if it ensures quality service. Hence, this farm's venture has real possibilities of achieve success. Lesser number of competitors will also ensure a handsome market share in favor of the proposed firm.

5.3.4 Threat of New Entrants

In a highly competitive market the new entrants pose more severe competition to them as they will bring intense changes in their products and services to attract the attention of customers (Timilsina, Kurdgelashvili and Narbel, 2012). However, in an industrial sector like solar power plant where the competition is low in itself, the issue to new entrants reduces to minimal. Therefore, if this proposed firm commences its business in Kerala it will not have to keep itself concerned with the new entries in the market as not many corporate are investing in solar sectors.

5.3.5 Threats of Substitution

The most common and heavily used electricity of the present time are thermal electricity, nuke electricity and hydro electricity (Timilsina, Kurdgelashvili and Narbel, 2012). Moreover, many organizations are involved in producing such electricity as their demand is very high. However, the production of these kinds of electricity is quite expensive in comparison to solar electricity. Therefore, Green Global Solar Private Limited will naturally get the advantage as their production cost is very low that may influence the people of Kerala as well as other destinations to switch to solar energy.

6.0 Strategic Analysis

6.1 Identification of Consumer Behavior and Buying Pattern

Formulation of strategies is the part that requires highest level consideration in order to determine the plans and policies that an organization will try to execute to achieve success (Ansari et al., 2013). Hence, it is necessary that the customer buying patterns will be thoroughly analyzed and strategies will be formulated on that basis so that the possible obstacles can be tackled well. Customers' buying is generally determined by four factors naming economic factors, psychological factors, influential factors and reason to buy. In this present case of solar energy only the reason-to-buy factors and economic factors are relevant. A person in Kerala will only switch to solar energy instead of conventional energy if he finds it suitable to his budget. Therefore, these two factors here are interlinked. Hence, Green Global Solar Private Limited may end up in a profitable state as the price attached to it is comparatively low that might be a reason for switching options.

6.2 STP Analysis

6.2.1 Segmentation Strategy

Market segmentation is a strategic tool that is used for dividing the market into specific segments according to their needs and demands so that different products or services can be produced accordingly. Different people of different social classes have different needs. Therefore, these economic situations and preferences are to be kept in mind while designing the products (Pandey et al., 2012). Considering the present situations of Kerala the target market should be divided into two segments like socio-economic class and high-profile class in order to take care of both classes. For attracting the socio-economic class the prices are to be reasonable so that they can think over the installation of solar products. Moreover, for grabbing the attention of the high-profile class the products can be designed in such a way that may influence the rich to buy them.

6.2.2 Selection of Target Market

Before setting up a business venture an organization must decide whom they are intending to sell their products to. The specifications of the products or services will depend on that particular group of people (Pandey et al., 2012). While this proposed firm is considering its target market in Kerala they can divide it in the following types: Homeowners and Commercial Enterprises. There is a certain group of people whose flexibility of buying power is low. These people intend to spend less money in different sectors so that an amount of money can be saved. These people may be interested in switching to solar electricity as that will save them money in their bills. On the other hand, the industrial sectors of Kerala are in a constant need of sufficient electricity to run their production. Therefore, by meeting these huge demands of electricity this farm can earn enough extra profit that can be later invested into their own business.

6.2.3 Positioning Strategy

Similarly positioning holds a place of immense importance from an organizational perspective. It is essential in order to gain competitive advantage in the marketplace (Pandey et al., 2012). For achieving a larger market share this proposed firm should ensure quality service to its customers and proper implementation of the pricing strategies so that company can start from better place.

Figure: 2. Positioning Strategy for the Proposed Business Firm

(Source: Author)

7.0 Marketing Mix Strategies

During introducing of a new business, it is essential to take into consideration certain marketing strategies, which may help the proposed business firm to meet increasing needs and expectations of the customers. In this study, during introducing of solar installation business; Green Global Solar Private Limited should consideration 4P's marketing strategies; those are underlined below for better comprehension:

7.1 Product/ Services

The proposed business firm is about to launch solar cells in Kerala, India for generation of solar energy, which will replace uses of renewable energy. In this case, for offering uninterrupted solar power; the proposed firm should pay greater attention towards its thin-film solar cell as well as crystalline (Khare, Nema and Baredar, 2013). Apart from that, allocation sufficient resource and equipment in terms of panels, inverters, transformers and batteries are also considered as crucial aspects for this proposed business, which may help the firm to generate solar electricity and also may help to satisfy the needs and expectations of target market consumers'.

7.2 Price

Based on the review of Indian market, it is viewed that the demand of electricity is high, whereas only few numbers of organizations are offering solar power services (Khare, Nema and Baredar, 2013). In this case, with an aim of grabbing the major market share within India; the proposed business firm should incorporate competitive pricing strategy, which may help the solar installation firm to gain better profitability. On the other hand, adoption of competitive pricing strategy also may help the proposed firm to attract the attention of price sensitive customers', as recently the cost of electricity is comparatively high as compare to solar power.

7.3 Place

Moreover, in terms of place; the proposed business firm has chosen Kerala primarily, as Kerala is almost virgin market, where overall comparative rivalry is very less as compared to other states in India such Mumbai, Pune, Rajasthan, Delhi and others (Khare, Nema and Baredar, 2013). In this case, the proposed business firm may witness monopoly advantages within the local and outside regions of Kerala. Simultaneously, it can be stated that selection of Kerala is also suitable, as the proposed business may easily gather or allocate its necessary resources, which is required for a solar installation project. In addition, the proposed firm will also target other premium locations of India such as Mumbai, Kolkata, Bangalore, Hyderabad, Mumbai, Delhi and others for expansion business.

7.4 Promotion and Distribution

During introducing a new business idea, promotion and distribution of offering products and services can be defined as one of the vital aspects for an organization, as it may influence the overall performance of a business firm in both ways. In this case, more precisely it can be argued that i.e. of introducing solar power services within a comparatively new market, an organization should pay greater attention towards its solar power supply and promotion. In this context, the proposed firm will take into consideration both online and offline approach, as it may help the firm to reach its target market consumers' in a more successful manner. In this regard, the solar firm will use social media, banner, hoarding and posters for brand promotion, where both official and website address will be promoted for grabbing new customers (Khare, Nema and Baredar, 2013). Moreover, the organization will also hire experienced marketing executives for solar power distribution in local market of Kerala and other premium locations of India.

8.0 Implementation and Control

During introducing of a new business, an organization should pay greater attention towards its strategy implementation and control associated factors. In this context, rationally it can be argued that failure of predetermined strategy implementation as well as control may lead an organization towards failure. Similarly, for a new start-up firm failure of strategic implementation and control also may demolish the existence of the firm. In this regard, it can be recommended that through taking into consideration McKinsey 7S framework; an organization may effectively execute its proposed business ideas. The following discussion will underline factors that the proposed solar business firm should take into consideration:

8.1 Skills

For effective implementation of this proposed business ideas; the firm should hire such skilled and efficient workforce, those who have at-least one year experience in on-site or off-site solar project. Apart from that, during the selection of workforce; the organization should hire such workers those who are highly responsible and has ability of working as a team (Khare, Nema and Baredar, 2013).

8.2 Style

Similarly, leadership style and tactics are being considered as one of the key aspects for an organization, which usually determine the future of an organization. Moreover, leaders do have huge impact on an organization in case of its success or failure (Sharma, Tiwari and Sood, 2012). In case of this proposed solar firm, it can be suggested that such leader should be chosen, who is having positive mind-set and confident frame of mind, which may help the firm to encourage its workforce in a more efficient manner.

8.3 Structure

Consequently, structure is also being considered as one of the crucial aspects for a firm, which also may drive business performance in both ways. Moreover, in the recent time; creation of adequate structure and hierarchy within a business may help an organization to execute its business operations in smoother manner (Sharma, Tiwari and Sood, 2012). In this context, the proposed solar power business firm should adopt "Flatter" structure, which may help the start-up business firm to ensure its long-term sustainability within the operating market.

8.4 System

System also can be defined as one of the core components i.e. of execution of business operations. In this case, it can be suggested that through incorporation of advanced tools and technology; the proposed business firm may enhance its effectiveness of operational process (Sharma, Tiwari and Sood, 2012).

8.5 Staff

Similarly, staff is one of the integral parts for a business (Sharma, 2011). In this case, during the selection of employees'; the proposed organization will also need to consider such workers as potential candidate, those who are proficient in communication and have the ability of speaking local languages.

8.6 Strategy

Apart from that, Strategy can be termed as one of the key aspects for an organization, as incorporation of inadequate strategy may help an organization towards greater failure (Sharma, 2011). In this context, it can be argued that the proposed organization should choose suitable leader for its solar project, as leaders usually make business decisions and strategy.

8.7 Shared Value

Moreover, shared value can be defined as core competencies and values of a business firm (Sharma, 2011). In this case, through introducing new solar project in Kerala; the proposed business firm intends to maximize its shared value for the society, which can be defined as positive aspects for the up-coming firm.

9.0 Operational Plan

Operations are being considered as one of the crucial aspects for an organization. In relation to this, it can be stated that during introduce of a new business; an organization should pay greater attention towards its operations, as it may persuade the overall performance of a business in both ways (Sharma, 2011). In this case, during introduce of solar installation project; the proposed business firm should determine its administration, management and business process, which may help the firm to execute its operations in smoother manner. Apart from that, with an intention of enhancing the efficiency of operational process; an organization should choose its necessary location, people, process and equipments, which usually plays an imperative role for an organization.

9.1 Formation of an Organization

For a start-up organization, formation is one of the vital aspects, which is required to be legally registered as an entity. In this context, that name should be unique and it must have permitted by the government (Patel, 2005). In this case, during introducing of solar installation project, the firm should be register by the government of India and it should have "No Objection" (NOC) certification. In this case, Green Global Solar Private Limited is registered as a private limited organization, which is a Limited Liability Company (LLC) enterprise.

9.2 Management and Organizational Structure

In order to underline the management and organizational structure of this proposed business firm, it can be stated that Green Global Solar Private Limited will execute its business operations by the assistance of marketing, sales, human resource, financial and information technology associated department (Patel, 2005). Apart from that, a legal attorney and a chartered accountant will also remain connected with this proposed business firm for providing legal and financial assistance. Similarly, in order to underline the proposed organizational structure; it can be mentioned that the organization will be directed by its board of directors. However, it can be specified that each department of this proposed firm will be lead by its specific departmental leaders, which can be termed as "Flatter" organizational structure.

9.3 People and Process

For installation of solar project in Kerala; the proposed business firm will need skilled and efficient workforce. At the same time, the solar installation organization will also need advanced technologies and tools; otherwise it may affect the operational efficiency of the firm. In this regard, it can be recommended that allocation of Q-Cells may help the proposed business firm to enhance its operational efficiency (Patel, 2005).

10.0 Financial Plan

10.1 Cash Flow

Cash-flow can be defined as an organizational total amount of liquidity money. In this case, it can be stated that through establishment of cash-flow for the upcoming period, a start-up firm may estimate its expected working capital as well as fixed capital for the proposed business idea. The following table will underline the expected cash-flow of proposed solar business:

Table: 1. Cash Flow of the Proposed Business Firm

(Source: Author)

10.2 Profit & Loss Projection

During introducing a new business, an organization should estimate its chances of profit or loss through preparing profit & loss account. In this case, preparation of profit and loss account may help a start-up organization to estimate its expected indirect expenses as well as revenue for the upcoming fiscal year. The following table will highlight the expected profit & loss amount for the proposed business idea:

Table: 2. Projected Profit & Loss for the Proposed Solar Installation Firm

(Source: Author)

10.3 Brake-Even-Point Analysis

Similarly, Break-Even-Point (BEP) analysis signifies the specific point, when a start-up firm may able to surpluses its expenditure by acquisition of profit. On the other hand, failure of that specific point can be defined as loss or collapse for a start-up organization. The following table will underline the BEP point of this proposed solar installation firm:

Table: 3. Projected Break-Even-Analysis

(Source: Author)

Figure: 3. Break-Even-Point Analysis

(Source: Author)

11.0 Conclusion

Based on these above assumptions, it can be defined that through concentrating on marketing mix strategies, operational plan and implementation and control of those above discussed aspects the solar installation firm may ensure its success within the local market of Kerala and other premium locations of India. 

12.0 References

Ansari, M.F., Kharb, R.K., Luthra, S., Shimmi, S.L. and Chatterji, S., 2013. Analysis of barriers to implement solar power installations in India using interpretive structural modeling technique. Renewable and Sustainable Energy Reviews, 27, pp.163-174.

Khare, V., Nema, S. and Baredar, P., 2013. Status of solar wind renewable energy in India. Renewable and Sustainable Energy Reviews, 27, pp.1-10.

Pandey, S., Singh, V.S., Gangwar, N.P., Vijayvergia, M.M., Prakash, C. and Pandey, D.N., 2012. Determinants of success for promoting solar energy in Rajasthan, India. Renewable and Sustainable Energy Reviews, 16(6), pp.3593-3598.

Patel, M.R., 2005. Wind and solar power systems: design, analysis, and operation. CRC press.

Sharma, A., 2011. A comprehensive study of solar power in India and World. Renewable and Sustainable Energy Reviews, 15(4), pp.1767-1776.

Sharma, N.K., Tiwari, P.K. and Sood, Y.R., 2012. Solar energy in India: Strategies, policies, perspectives and future potential. Renewable and Sustainable Energy Reviews, 16(1), pp.933-941.

Timilsina, G.R., Kurdgelashvili, L. and Narbel, P.A., 2012. Solar energy: Markets, economics and policies. Renewable and Sustainable Energy Reviews, 16(1), pp.449-465.