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Renewable Energy Business Plan

Due to the environmental impact, the surge in renewable energy products and services is on the rise. So, by starting this business you are not only earning profits but also a social identity for doing something for the environment.

Anyone can start a new business, but you need a detailed business plan when it comes to raising funding, applying for loans, and scaling it like a pro!

Need help writing a business plan for your renewable energy business? You’re at the right place. Our renewable energy business plan template will help you get started.

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• Fill in the blanks – Outline
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How to Write A Renewable Energy Business Plan?

Writing a renewable energy business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products and services:.

Highlight the renewable energy services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of renewable energy company you run and the name of it. You may specialize in one of the following renewable energy businesses:

• Solar energy business
• Wind energy business
• Biomass energy business
• Geothermal energy business
• Hydropower business
• Energy storage business
• Hydrogen fuel business
• Energy efficiency & consulting business
• Describe the legal structure of your renewable energy company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established renewable energy business, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your renewable energy business plan::

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your products & services:

Mention the renewable energy products & services your business will offer. This list may include:

• Solar panels
• Wind turbines
• Energy storage systems
• Monitoring systems
• Consultancy & feasibility studies
• System design & engineering
• Installation
• Project financing & funding

Quality measures:

This section should explain how you maintain quality standards and consistently provide the highest quality service.

Additional Services

In short, this section of your renewable energy plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your renewable energy business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your renewable energy business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & machinery:.

Include the list of equipment and machinery required for renewable energy, such as for solar energy; solar panels, inverters, racks or frames, solar tracking systems, solar charge controllers, etc are needed.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your renewable energy business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your renewable energy services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your renewable energy business plan should only include relevant and important information supporting your plan’s main content.

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This sample renewable energy business plan will provide an idea for writing a successful renewable energy plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our renewable energy business plan pdf .

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Frequently asked questions, why do you need a renewable energy business plan.

A business plan is an essential tool for anyone looking to start or run a successful renewable energy business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your renewable energy company.

How to get funding for your renewable energy business?

There are several ways to get funding for your renewable energy business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your renewable energy business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your renewable energy business plan and outline your vision as you have in your mind.

What is the easiest way to write your renewable energy business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any renewable energy business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

How do I write a good market analysis in a renewable energy business plan?

Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:

• Stating the objective of your market analysis—e.g., investor funding.
• Industry study—market size, growth potential, market trends, etc.
• Identifying target market—based on user behavior and demographics.
• Analyzing direct and indirect competitors.
• Calculating market share—understanding TAM, SAM, and SOM.
• Knowing regulations and restrictions
• Organizing data and writing the first draft.

Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.

How detailed should the financial projections be in my renewable energy business plan?

The level of detail of the financial projections of your renewable energy business may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a complete view of your financial performance.

Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Energy Conservation Business Plan

Start your own energy conservation business plan

Green Power Consultancy

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Green Power Consultancy is a start-up organization in Burlington, VT that offers designs and advice to architects and consumers regarding environmentally sensitive buildings as well as energy consumption recommendations. Green Power has identified three keys to its success. The first is the need to only offer solutions which are based on market demand. The second is to ensure that all of its offerings are based on economic justifications; the solution should make sense beyond the environmental considerations because it has long-term economic value.

Green Power will be targeting architects and individual consumers. Green Power will work closely with several architects providing them the ability to offer environmental solutions to their customers. This group is growing at 7% and there are 23 potential customers in the area. The second customer group is individual consumers; an environmentally conscious group that have sought out a service provider to help them implement their personal ethics into the design of their new or existing structure.

Green Power is an environmental energy consultancy that offers a wide range of services: advice regarding passive heating, grey water usage recommendations, renewable energy considerations and employee transportation options.

Green Power will be led by the seasoned management team of Dan and Sue Lang. Dan received a degree in environmental studies, business, and a Masters in architecture. Dan has several years of work experience within the industry. The second part of the team is Sue Lang. Sue has an MBA and work experience with the Bonneville Power Administration in their renewable energy department. Through a combination of excellent education and good work experience, Green Power’s management team will be able to successfully execute on its business plan.

Green Power has conservatively forecasted sales of $202,343 for year two, rising to $238,402 for year three. Net profit will be reached in the second year. Through a combination of a proven business model, a strong management team, and this comprehensive energy business plan to guide the organization, Green Power will be long lasting, profitable business.

It is Green Power Consultancy’s mission to provide the finest green energy solutions for new constructions as well as existing building owners/lessors. Through careful analysis, attentive customer support, and cost effective solutions, Green Power will become a stable business serving the Burlington community.

Keys to Success

Green Power has identified several keys to success that will be instrumental in creating a sustainable business.  If these keys are followed, the likelihood of success will significantly increase.

• Offer solutions that are demanded by customers.
• Ensure all of the solutions have economic considerations built into the respective models.
• Only provide 100% customer satisfaction.  All customers must have their expectations exceeded.

Green Power has identified three objectives that it will pursue for the long-term success of the business:

• Proven cost-benefit analysis environmental approaches to structure building, maintenance and energy consumption.
• Become the premier environmental energy consultancy in the state within five years.
• Reach profitability within three years.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Green Power is a Vermont-based L.L.C green energy consultancy. Green Power offers its services both to architects who are constructing new businesses as well as existing building owners/users who are looking to make their existing structure more environmentally sound.

Start-up Summary

Green Power will require the following equipment in order to begin operations:

• Computer system including three workstations, standard laser printer as well as a wide mouth printer, Internet access, and assorted software such as Microsoft Office, QuickBooks and CadArchitect (the premier architect industry software).
• Three work areas including two drawing tables and the assorted office supplies for the standard workdesks as well as the drawing tables.
• Various bookshelves, lights, and couches (for clients).
• Bike storage unit/locker.
• Refrigerator, microwave, and assorted utensils for the lunch room.

Company Ownership

The two principal owners of Green Power is Dan and Sue Lang.

Green Power offers a wide range of environmentally-conscious energy solutions related to new and existing structures. The main areas of consulting that Green Power will offer are:

• Passive heating: This applies to the construction of the new structures, designing the structure to capture and utilize heat that is either generated naturally or as a by-product of the building. Examples of passive heating include specific placement of the heating vents, the design and placement of the building and the windows.
• Grey water: This is the capture and utilization of grey water.  Grey water is water that has been used for some other source such as in the faucets or rain water that can no longer be offered as potable, but still can be used for toilet flushing or land irrigation.
• Renewable energy: This service offers customers the information needed to make intelligent decisions regarding the use of renewable energy sources. Renewable energy sources can be defined as sources of energy where the rate of energy depletion is not faster than the production rate.  Examples include: wind power, photovoltaics, hydro power, biomass, solar energy.
• Employee transportation: This service is to reduce the energy consumed by employees traveling to work. Typical aspects of the plan are outlining public transportation options, developing a company subsidized public/alternative transportation voucher, building covered bicycle lockers and shower facilities as well as other activities designed to increase the number of employees using bicycles as their main source of transportation to work.
• Efficient building construction: This focuses on the use of local building materials thereby decreasing energy needed for transportation as well as the utilization of recycled materials for construction decreasing energy demands for the manufacture of new building materials.

Market Analysis Summary how to do a market analysis for your business plan.">

Green Power has segmented the market into two distinct target market groups. The first group is architects who are building a structure either speculatively (infrequently) or for a client (generally). The second customer group is individual customers who desire environmental elements designed into their building. The niche that Green Power has chosen to participate in is a fairly new field. Green Power faces competition from eco-architects as well as from the local utilities that may have a small department that offers green energy consultation advice. The industry often operates to satisfy clients; it is the end customer that typically requests green energy designs and they either seek out a specific architect or they request their architect to receive guidance from firms such as Green Power.

Market Segmentation

Green Power has segmented its target market into two different customer groups, both equally attractive.

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• The architect firms typically have two – nine partners.
• Offer both residential and commercial design work, however 67% of their work is commercial.
• The firms typically have only a handful of service providers that they work with. This means that once they find someone they trust, they develop a long-term relationship with that service provider.
• Yearly revenue ranges from $200 thousand – $5 million.

Individual customers This segment contains consumers who are either having a residential home, or a commercial structure, designed. Due to their personal environmental concerns and a recognition that it can be cost effective to have building decisions with environmental considerations, they have requested Green Power’s assistance. They are generally working directly with Green Power for their design needs and will likely then take this design criteria to their builder.

• The individual is an environmentalist and they take into account how their action will impact the environment.
• The age range of clients is 35-49.
• Average household income is $65,000. Please note that while the overriding concern in using Green Power’s services is the positive impact on the environment, a cost benefit analysis indicates that in the long term it is cost effective to adopt green energy considerations.
• 89% of the group have at least an undergraduate degree, 26% have a graduate degree.

Target Market Segment Strategy

Green Power has chosen these two market segments for compelling reasons. The architects have been focused on because they are the service providers that do the bulk of the design work for residential and commercial structures. The architects are used as sales people for Green Power’s services, they are the ones that can then sell these services to their customers. It benefits the architects because they are able to offer a wider range of value-added-services to their customers without spending capital of learning the information themselves. By aligning itself with architects, Green Power is able to offer their services to a larger group of people.

Green Power will also serve individual customers. These are people who know that they want environmental considerations made in the design of their structure and will seek out a firm such as Green Power to have this work done. Burlington is a wonderful place to locate Green Power as there is a high population of environmentally-conscious people in this city. This provides Green Power with a large market of interested customers. Additionally, this market group is attractive because people that have environmental tendencies are often vocal about their commitments or causes. By offering green energy services, Green Power allows this group of people to act on what they believe in on a personal level, adhering to the wise saying think globally, act locally.

Service Business Analysis

The environmental power consultancy industry is fairly new. Only recently has there been an emergence of firms that offer these services. This can be explained by several factors. First, people are becoming more environmentally aware these days, a function of many things including the recent problems with the Middle East and Fundamental Islamists. These recent problems have forced people to reconsider America’s dependence on oil and the need to maintain good relationships with Saudi Arabia only because of their oil. Another factor that has contributed to the growth of green power is that it has become increasingly cost effective to make business decisions while taking into account the decisions impact on the environment. For years an environmental decision was based on personal consciousness and ethics, not overriding economic factors. Now money can be saved when environmental impacts are taken into account. Please read the following section which will indicate the different players within the industry.

Competition and Buying Patterns

The competition generally takes two different forms:

Eco-architects These are architects that specialize in environmental design considerations. Typically their entire practice is based around structures that have environmental elements. Green Power could actually be within this industry niche, however they are able to serve a larger customer baser, therefore earn more revenue as well as make a positive impact in our world by offering its services to both end consumers as well as regular architects as opposed to the business model of only serving one set of customers.

Local utility The local utilities often have a department that offers free consultation for environmental design considerations. There are incentives for the utilities to attempt to curb their customer’s use of their energy. These incentives take the form of not needing to make as many capital expenditures to develop the power delivery infrastructure to accommodate the increased load for energy demands. Therefore, the more the utility is able to get their customers to conserve, the less money they have to spend on infrastructure improvements, the more money they earn. That being said, the utility often has a small department that offers tips on energy conservation. While these tips can be quite helpful, since they are offered for free for the power customers, they are not nearly as comprehensive as they could be. So while they provide good initial tips, the local utility is not a strong competitor to serve a client who is committed to making as much of a positive environmental difference as can be achieved by using a specialized firm.

The buying pattern for consumers is currently being defined as we speak, a function of how new the industry is. Currently, purchasing decisions are based on customers typically making requests for these services from their architect or they do a bit of research to determine who offers these services. As the industry becomes more mature, firms will become more established and reputation and visibility/awareness will shape buying decisions. Since there is a wide range of options regarding implementation, price is less of a consideration for the decision since most of the service providers can offer a wide range of inexpensive to expensive options.

Strategy and Implementation Summary

Green Power’s business strategy recognizes and will leverage the fact that a lot of business will be transacted through networking and word-of-mouth referrals. With this in mind, Green Power will work diligently to build alliances with architects who can co-brand their services with Green Power thereby increasing Green Power’s potential qualified customers.

Green Power will rely on its competitive edge of adopting a cost effective environmental solution so in addition to meeting environmental concerns of the customer, Green Power’s services will save the customer money over time.The marketing strategy will highlight both environmental attributes as well as economic ones.The marketing campaign will recognize the existence of two distinct market customers. Lastly, the sales strategy will offer a compelling economic analysis of how the customer can save money by adopting Green Power’s designs.

Competitive Edge

Marketing strategy.

The marketing strategy is based on developing an awareness regarding Green Power’s services to both architects and the end use consumers. Green Power will strongly use networking as a means to develop relationships with many of the city’s architects. Although Burlington is a reasonably-sized city, the architect community is fairly close knit. If one wanted, it is easy to develop active relationships with many of the different architects in Burlington. By developing these relationships, Green Power will allow the firms to become familiar with not only the services offered by Green Power, but also the personalities involved, recognizing that much of business is transacted by who you know. Advertisements will be placed in the local architect newsletter.

To reach the end user customers, Green Power will use Advertisements in the local paper as well as within the yellow pages. As a means of increasing visibility of Green Power, GP will participate in several community-based seminars that serve as a free source of information for the citizens of Burlington. Green Power believes that participating in the seminars will be an effective way of meeting many of the potential customers and allowing them to become familiar with Green Power expertise.

Sales Strategy

The sales strategy implicitly and explicitly takes into account the philosophy that the reason that many of the people are attracted to Green Power is because of its personal environmental ethics. The sales strategy will leverage this desire with the fact that environmental decisions can have positive economic impacts in the long term. Therefore the sales strategy will leverage the competitive edge of economic justification as the method for turning sales leads into customers. For this strategy to be effective, Green Power will present customers case studies and quantifiable data proving economic justification.

Sales Forecast

Green Power has adopted a conservative sales forecast for the business plan. By adopting a conservative prediction, it is easier to hit sales goals and increase the likelihood that the business plan is relevant to the business. If the sales forecasts was wildly off, it casts doubt on the application of the plan for the business.

Sales will be slow for the first several months, a function of Green Power being a start-up organization. As Green Power increases their customer pool and more architects become familiar with GP’s services, business will grow. Growth will be forecasted and preferenced as steady. The steadier it is, the easier it will be to deal with the incremental growth in work. Please view the following table and charts for a graphical representation on monthly and yearly sales.

Cost of sales for a consulting company are negligible, however, cost of architects sales will be 20%, since we will pay commissions to the architects for referrals.

Green Power has identified several milestones as a way of setting achievable goals. Performance is likely to be improved through the quest of reaching the goals. This phenomenon is well documented and is used in large corporations such as GE’s Seven Sigma Program as well as many state’s benchmarked-based assessment testing systems. Green Power has identified the following milestones:

• Business plan completion;
• 10th customer;
• Revenues exceeding $50,000;
• Profitability.

Web Plan Summary

The website will be used as a marketing tool. It will offer a description of the services offered as well as a listing of different clients served.

Website Marketing Strategy

The plan for marketing the site is fairly simple: submission to search engines such as Google and listing the website on all of the company’s correspondence and printed marketing/sales media.

Development Requirements

Green Power will utilize a local programmer to build the site.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The company will be lead by the husband and wife team of Dan and Sue Lang. Dan grew up in Oregon and attended the University of Oregon for his undergraduate education. Dan’s major was environmental studies and business. After graduation Dan worked for a year at an environmental testing company. Through general networking, Dan was introduced to one of the three principals of a company called The Seal Company. The business model for this company was to make assessments for private and public companies as to their environmental impact. His position with The Seal Company provided him with wonderful insight into the industry of environmental assessment and helped provide him with a foundation of knowledge regarding green energy, just one of the areas of assessment. After a year of this Dan enrolled into the University of Oregon’s Master’s Architect program, taking course work in environmental design. This degree would provide Dan with the skills to make a larger impact in his community.

Sue went to the University of Burlington for undergrad and then moved out to Oregon to attend Willamette University’s MBA program. After her degree Sue moved up to Portland and worked for the Bonneville Power Administration where she worked in their renewable resource division. Much of her projects were marketing based, trying to gain public acceptance of renewable energy sources.

Personnel Plan

For the first three months of business the organization will be quite lean, consisting of just Dan and Sue. Dan will be responsible for most of the business-related issues as well as doing research and helping out with the work projects. Sue’s responsibilities will be marketing and sales based. She will work hard on developing visibility for the company as well as working with prospective customers. Green Power has forecasted that on month four it will need administrative assistance. The duties will be answering the phone, some input accounting, and other clerical functions. Initially this person will be part time but will move to full time at the beginning of year two.

Financial Plan investor-ready personnel plan .">

The following sections will outline the important Financial Assumptions.

Important Assumptions

The following table details important Financial Assumptions.

Break-even Analysis

The Break-even Analysis is indicated below.

Projected Profit and Loss

The following table and charts will indicate Projected Profit and Loss.

Projected Cash Flow

Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Business Ratios

The following table contains typical Business Ratios of both Green Power as well as the industry as a whole.

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• Custom Fields: Capture important information in three custom fields, including Reference, Approved, and Section. Keep all your business plan details organized and easily accessible.
• Custom Views: Gain different perspectives on your business plan with five unique views. Use Topics to focus on specific areas, Status to track progress, Timeline to visualize milestones, Business Plan to see the big picture, and the Getting Started Guide to help you navigate the template.
• Collaboration Tools: Collaborate seamlessly with your team by assigning tasks, leaving comments, attaching files, and utilizing ClickUp's powerful integrations.
• Project Management: Plan, execute, and track your solar energy business plan with ease using features like Goals, Gantt Chart, Board View, Recurring Tasks, Automations, Calendar View, Table View, Dashboards, Whiteboards, Milestones, Email, AI, and Workload View.

With ClickUp's Business Plan Template, you'll have everything you need to create a comprehensive and compelling solar energy business plan.

How To Use Business Plan Template for Solar Energy

If you're ready to create a business plan for your solar energy company, follow these 6 steps using ClickUp's Business Plan Template:

1. Executive Summary

Start by writing a compelling executive summary that outlines the key details of your solar energy business. This section should include your company's mission, vision, target market, competitive advantage, and financial projections.

Use Docs in ClickUp to create and write your executive summary in a professional and concise manner.

2. Market Analysis

Conduct thorough research on the solar energy market to identify trends, customer segments, and competitors. Analyze the demand for solar energy in your target market and identify any barriers or opportunities that may exist.

Utilize the Table view in ClickUp to organize and analyze your market research data and present it in an easily digestible format.

3. Product and Service Offering

Clearly define the solar energy products and services you will offer to customers. Explain the unique features and benefits of your offerings, such as solar panel installation, maintenance, and energy storage solutions.

Use custom fields in ClickUp to outline and categorize your product and service offerings, ensuring that all key details are captured.

4. Marketing and Sales Strategy

Develop a comprehensive marketing and sales strategy to reach your target customers and generate leads. Outline your pricing structure, promotional activities, and distribution channels. Identify key partnerships and collaborations that will help you expand your reach.

Use tasks in ClickUp to create a step-by-step plan for executing your marketing and sales strategy, assigning responsibilities to team members and setting deadlines.

5. Financial Projections

Create detailed financial projections that outline your revenue streams, expenses, and projected profitability. Include a break-even analysis, cash flow projections, and a timeline for achieving financial milestones.

Utilize ClickUp's Dashboards to visually track and monitor your financial projections, allowing you to make data-driven decisions to drive business growth.

6. Implementation Plan

Develop a detailed implementation plan that outlines the steps and timeline for launching and growing your solar energy business. Include key milestones, staffing requirements, operational processes, and any regulatory or compliance considerations.

Use Goals in ClickUp to set specific objectives and track your progress towards implementing your business plan, ensuring that you stay on track and achieve your desired outcomes.

By following these steps and utilizing ClickUp's Business Plan Template, you'll be well-equipped to create a comprehensive and effective business plan for your solar energy company.

Get Started with ClickUp’s Business Plan Template for Solar Energy

Entrepreneurs or companies entering the solar energy industry can use the Business Plan Template for Solar Energy in ClickUp to create a comprehensive plan for their solar energy business, attracting investors and securing funding for their venture.

To get started, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a solid business plan:

• Use the Topics View to outline and organize different sections of your business plan, such as executive summary, market analysis, financial projections, and implementation plan
• The Status View will help you track the progress of each section, whether it's complete, in progress, needs revision, or still to do
• The Timeline View will give you a visual representation of the project timeline, allowing you to set deadlines and milestones
• The Business Plan View provides a comprehensive overview of your entire business plan, allowing you to easily navigate between sections and make edits
• The Getting Started Guide View will provide you with a step-by-step guide on how to use the template effectively and create a compelling business plan
• Utilize the custom fields: Reference, Approved, and Section, to add additional information and track the status of each section
• Update statuses and custom fields as you make progress and receive feedback from stakeholders
• Monitor and analyze your business plan to ensure it meets the requirements of investors and effectively communicates your solar energy business vision and strategy.
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Steps to Create Your Company’s Renewable Energy Strategy

August 1, 2018

Denielle Harrison

Former Manager, BSR

At the Global Climate Action Summit this fall, stakeholders from around the globe will meet in San Francisco to discuss how we can take climate ambition to the next level . Business can play a significant leadership role in accelerating the transition to a lower-carbon economy, and as we have seen through initiatives like the Renewable Energy Buyers Alliance (REBA) , renewable energy can be a key component of climate action efforts.

Corporate renewable energy procurement should be guided by a defined strategy based on available options, key priorities, and ambition. To create your strategy, you must identify your company’s motivations for procuring renewable energy, adopt supporting goals and commitments, and identify available internal human and financial resources to aid execution.

These are the steps we would suggest to help you get started.

1. Assess Your Options

The first step is to assess the landscape of renewable energy sourcing options available on the market to determine what is feasible. This will ultimately determine the renewable energy options available to you.  

Current and future policies will impact renewable energy costs, incentives, and availability. The Climate Policy Tracker can be a useful tool in assessing how regulations will impact your renewable energy choices in various jurisdictions.

After narrowing procurement options based on geography, your company must consider specific site constraints. Here are some questions to consider:

• Is your real estate portfolio suitable for onsite renewable energy generation? Leased assets often pose a challenge for onsite generation, requiring companies to liaise with their landlords; however, renewable energy availability also poses a challenge. For example, a company that leases retail space in an urban locality with poor solar energy potential may not have the option of leveraging onsite renewable energy, despite a supportive landlord.
• If your real estate portfolio is suitable for onsite generation, what is the energy capacity of potential projects/installations? Companies with owned or leased assets that support onsite renewable energy generation should consider the energy capacity of any potential projects/installations and use this to calibrate their local procurement implementation. Asset type and energy capacity should be significant considerations when negotiating contract terms with potential project developers.
• What is your time horizon? Long-term contracts should not be considered for sites that are likely to be eliminated from the real estate portfolio before the termination of the power generation contract.

2. Create Your Strategy

Once you’ve determined what your renewable energy options are, the next step is to determine your ambition level and define your strategy for renewable energy. To ensure adoption and integration within your company, this should complement both your business and sustainability strategies. A company with existing energy intensity, greenhouse gas reduction, and business growth goals should design a renewable energy strategy that complements existing objectives and initiatives to facilitate execution. Available financial resources should factor prominently into this and will ultimately dictate the realistic level of ambition your company can set.

Your strategy should reflect your company’s motivation for renewable energy procurement. For example, a company seeking to grow the renewable energy market and illustrate private-sector demand for clean power may prioritize options like new onsite or regional solar installations and choose to only purchase renewable energy attributes (e.g. RECs) that are bundled with renewable power. One example of this is Intuit’s Purely Green Program , which the company launched in part to show market demand for wind energy in Texas for its business partners, employees, and customers. Adobe’s renewable energy strategy prioritizes onsite installations and PPAs, supported by energy efficiency and policy advocacy, to meet its 100 percent renewable energy goal. Anheuser-Busch InBev’s strategy aims to source roughly 75 percent of its electricity from direct PPAs and roughly 25 percent from onsite installations.

3. Identify Opportunities to Collaborate

While renewable energy procurement variables can be complex to navigate, you do not need to work in isolation. Collaborating with other companies can help you achieve your strategic renewable energy objectives and minimize the barriers to entry for procurement.

For example, you could consider partnering with a group of companies with regional operations who are willing to enter into a shared procurement contract. This approach, known as consortium aggregation, is both feasible for companies with energy demands that are typically individually too small for project developers and companies with significant energy demands that can appropriately distribute the project load. For example, AkzoNobel, DSM, Google, and Philips leveraged this approach in the Netherlands—each company assumed an equal stake in a wind PPA there. The shared contract can also be anchored by a company that assumes the majority share of the energy, leaving smaller companies to assume small shares of the overall project load.

Initiatives like the Future of Internet Power and REBA can also provide the resources and tools for companies to execute against their renewable energy strategies together. Contact us if you’re interested in learning more about how you can help increase your climate ambition with renewable energy in advance of the Global Climate Action Summit.

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Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals .

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How to Start a Profitable Solar Energy Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a solar energy business plan., 3. develop a solar energy brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for solar energy., 6. open a business bank account and secure funding as needed., 7. set pricing for solar energy services., 8. acquire solar energy equipment and supplies., 9. obtain business insurance for solar energy, if required., 10. begin marketing your solar energy services., 11. expand your solar energy business..

When embarking on a solar energy business venture, it's crucial to understand the market landscape you're entering. A thorough market analysis will inform your business strategy and allow you to identify opportunities and threats within the solar industry. Here are key points to consider in your market analysis:

• Assess the current demand for solar energy solutions in your target market, including residential, commercial, and industrial sectors.
• Analyze the competitive landscape by identifying existing solar energy businesses, their market share, and their product offerings.
• Examine government policies, incentives, and regulations that could affect the solar energy market, such as tax credits, subsidies, or import duties on solar panels.
• Identify trends in solar technology advancements and how they might influence market dynamics and your business strategy.
• Understand the customer profile, including their motivations for switching to solar, their purchasing power, and the factors that influence their decision-making.
• Consider the geographic factors that may impact the solar energy potential, such as average sunlight exposure and weather patterns in your target regions.
• Explore the supply chain for solar components and assess the reliability and costs of sourcing materials and equipment.

Are solar energy businesses profitable?

Yes, solar energy businesses can be profitable. According to the U.S. Energy Information Administration, the cost of solar energy has declined significantly over the past few years, making it a more accessible and attractive option for businesses. With a variety of incentives available to businesses who install solar systems, including tax credits and other state incentives, this renewable resource continues to be a profitable and practical choice for business owners across the country.

Embarking on a solar energy business venture requires a well-crafted business plan to navigate the competitive landscape and chart a path toward profitability. A comprehensive plan will serve as a blueprint to guide your operational, financial, and marketing strategies. The following points should be included in your draft:

• Executive Summary: Summarize the business objectives, mission statement, and the basic information about your company's leadership team, employees, and location.
• Market Analysis: Conduct research to understand the solar industry, customer demographics, market trends, and competitor strategies.
• Organization and Management: Outline your company's organizational structure, details about the ownership, and profiles of your management team.
• Services or Products: Describe the solar products or services you plan to offer, including details on product life cycles and research and development activities.
• Marketing and Sales: Develop a strategy for how you will attract and retain customers, including your sales approach and marketing channels.
• Funding Request: If you are seeking financing, specify the amount needed, potential future funding requirements, and strategic financial plans.
• Financial Projections: Provide an analysis of the financial forecasts, including balance sheets, income statements, cash flow statements, and budget for capital expenditures.

How does a solar energy business make money?

Solar energy businesses make money through a variety of different sources. These include the sale of solar panels, installation services, and maintenance services. Additionally, many solar businesses offer additional services such as energy auditing and system monitoring. An example target audience for an air duct cleaning business would be homeowners as they are often looking to improve their indoor air quality, increase efficiency, and reduce their carbon footprint. They are also less likely to want to do the labor themselves, so they will be looking for a reliable and competitively priced service provider that they can call on whenever necessary.

Developing a brand for your solar energy business is crucial as it sets you apart from competitors and communicates your company's values to customers. A strong brand resonates with your target audience, fosters loyalty, and enhances recognition. Here's how you can build a compelling solar energy brand:

• Determine your brand's core values and mission statement to reflect your commitment to sustainability and customer service.
• Choose a brand name that is memorable, easy to pronounce, and reflects the solar energy industry.
• Design a logo and visual elements that are distinctive and convey clean energy and eco-friendliness.
• Create a brand voice and messaging that consistently communicate your brand's benefits and values across all marketing materials.
• Identify your target audience and tailor your branding to meet their needs and preferences.
• Ensure all branding materials maintain a consistent aesthetic and message for strong brand cohesion and recognition.
• Consider trademarking your brand name and logo to protect your brand's identity.
• Use storytelling to connect with customers and share the impact of solar energy on the environment and their lives.

How to come up with a name for your solar energy business?

When coming up with a name for your solar energy business, start by brainstorming words that symbolize the energy and goals of the business. Consider words like “sun”, “breeze”, “light”, and “power”. Once you have a list of words that resonate with you, combine them with other positive keywords to come up with an exciting and effective business name. Check online to make sure that the name you decide on has not already been taken. Additionally, consider visiting your local library for resources to help guide you in the process of picking the perfect title for your new enterprise. With some thought and creativity, you can come up with a memorable and fitting name for your solar energy business!

Starting a solar energy business requires not only technical know-how and market knowledge but also making sure your venture is legally recognized. Formalizing your business registration is a key step in legitimizing your operations and protecting your interests. Here's how you can navigate this crucial stage:

• Choose a business structure suitable for your needs, such as sole proprietorship, partnership, limited liability company (LLC), or corporation, and register with your state's Secretary of State or equivalent entity.
• Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes, especially if you plan to hire employees.
• Register for state and local taxes, including sales tax, use tax, and property tax, if applicable to your business operations.
• Acquire the necessary business licenses and permits specific to the solar energy industry from local, state, and federal agencies.
• Ensure compliance with local zoning laws and regulations, especially if you're operating a physical office or installation service.
• Consider registering your business name as a trademark to protect your brand and identity in the marketplace.

Resources to help get you started:

Tap into valuable materials designed specifically for solar energy entrepreneurs aiming to stay ahead in market trends, optimize operations, and pursue strategic business expansion:

• Solar Energy Industries Association (SEIA) Reports: Comprehensive industry data, policy updates, and market research critical for strategic planning. Visit SEIA .
• GreenTech Media (GTM) Research: In-depth analysis and news on solar energy technologies and market trends. Great for staying informed on the latest in solar innovation. Visit GTM .
• International Energy Agency (IEA) Solar PV Roadmap: Strategies and analysis to understand the global solar PV market's future and its implications for entrepreneurs. Visit IEA .
• National Renewable Energy Laboratory (NREL) Publications: Peer-reviewed papers, data sets, and analysis tools on solar technologies and financing. Visit NREL .
• Renewable Energy World: A hub for news, articles, and reports on the broader renewable energy market, including solar. Ideal for entrepreneurs looking for a wider perspective. Visit Renewable Energy World .
• Solar Power World: Offers news, technical articles, and reviews on solar technology and installations, suitable for keeping up with industry best practices. Visit Solar Power World .

Starting a solar energy business requires strict adherence to various legal requirements including licenses and permits. These are crucial to ensure compliance with local, state, and federal regulations. Below is a guide to help you acquire the necessary documentation:

• Research Local Requirements: Investigate the specific licenses and permits required in your area by contacting the local city or county government. Solar installation often requires a general contractor's license or a specialized solar contractor's license.
• State-Level Permits: Check with your state's department of business licensing or professional regulation for any state-specific permits and how to apply for them.
• Federal Compliance: Ensure you understand the federal requirements, which could include obtaining an Employer Identification Number (EIN) for tax purposes and adhering to the Occupational Safety and Health Administration (OSHA) guidelines.
• Building Permits: Get familiar with the process of obtaining building permits, as most solar panel installations will require them.
• Electrical and Plumbing Licenses: Depending on the scope of your services, you may need to obtain specific licenses for electrical and plumbing work related to solar installations.
• Specialized Solar Training and Certification: Although not always a legal requirement, obtaining certification from entities such as the North American Board of Certified Energy Practitioners (NABCEP) can enhance credibility and may be required by some jurisdictions.

What licenses and permits are needed to run a solar energy business?

In order to run a successful solar energy business, you will need the appropriate licenses and permits. Depending on the type of business you’re running, you may need to obtain a local business license, a certification of authority to do business in the state, an occupational license, and any other applicable permits that are required by your local or state governments. You may also need to obtain an electrical contractor’s license if you are installing and wiring solar panels, as well as any applicable certifications that are required by your state or local government to handle hazardous materials, such as batteries.

Starting a solar energy business requires careful financial management from the outset. Step 6 is crucial for keeping your business's finances organized and obtaining the necessary capital. Here's how to tackle it:

• Research banks and credit unions that offer business banking services. Look for institutions with experience in renewable energy financing and favorable terms for small businesses.
• Prepare the necessary documents, which typically include your business plan, EIN (Employer Identification Number), Articles of Incorporation, and possibly a business license or certificate.
• Open your business bank account by completing an application with your chosen financial institution. This will help you manage your expenses, revenues, and taxes effectively.
• Explore funding options such as business loans, solar-specific grants, government incentives, or venture capital. Consider the pros and cons of each to decide which best suits your business needs.
• Develop a comprehensive financial plan that outlines how you'll use and repay any borrowed funds, ensuring sustainable growth for your solar energy business.
• Regularly consult with a financial advisor who specializes in renewable energy to keep your business on track and make informed funding decisions.

Setting the right price for your solar energy services is crucial for business success. It involves striking a balance between being competitive and ensuring profitability. Consider the following guidelines to help structure your pricing strategy:

• Assess Costs: Calculate all your expenses, including equipment, installation, maintenance, and overheads. Ensure your prices cover these costs and yield a reasonable profit margin.
• Market Research: Analyze your competitors' pricing. Offer competitive rates without undervaluing your services to attract customers while maintaining quality.
• Value-Based Pricing: Consider the value your solar solutions provide, such as energy savings and environmental benefits, and price accordingly to reflect this value.
• Incentives and Rebates: Take into account any government rebates or tax incentives for solar energy that you can pass on to customers, potentially allowing you to adjust your pricing.
• Flexible Options: Offer different pricing packages or financing options to cater to a variety of customers. This can include leasing, loans, or power purchase agreements (PPAs).
• Clear Communication: Ensure that your pricing structure is transparent, with no hidden costs, to build trust with potential clients.

What does it cost to start a solar energy business?

Initiating a solar energy business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $159000 for launching such an business. Please note, not all of these costs may be necessary to start up your solar energy business.

Embarking on the journey of starting a solar energy business is a commendable stride towards a sustainable future. Step 8 is crucial as it involves acquiring the right equipment and supplies that will form the backbone of your service offerings. Here's a guide to help you navigate this stage:

• Research Suppliers: Find reputable manufacturers and distributors of solar panels, inverters, batteries, and mounting systems. Consider factors like price, warranty, and technical support.
• Quality Matters: Opt for high-quality, durable products that meet industry standards to ensure the longevity and efficiency of your installations.
• Purchase Essential Tools: Acquire the necessary tools for installation, such as solar PV wire, conduit, meters, and safety equipment.
• Invest in Software: Consider software for design and simulation of solar installations, customer relationship management (CRM), and project management.
• Training and Certification: Ensure that you and your team are trained and certified, if required, to handle the equipment safely and competently.
• Stock Management: Set up an inventory management system to keep track of your equipment and supplies.
• Logistics: Establish a reliable logistics network for the timely delivery of equipment to project sites.

List of software, tools and supplies needed to start a solar energy business:

• Solar Panels: Approximate cost range from $200 to $400 per panel.
• Inverters: Approximate cost range from $1000 to $3000 per unit.
• Mounting Systems: Approximate cost range from $500 to $1500 per system.
• Battery Storage Systems: Approximate cost range from $800 to $3500 per system.
• Power Control Systems: Approximate cost range from $500 to $1000 per system.
• Cables, Connectors and Wiring: Approximate cost range from $100 to $250 per item.
• Software Design Tools: Average cost of software tools is around $100.
• Installation Service/Labor Costs: Average labor costs are around 20-50 percent of the project’s total cost.
• Photovoltaic System Maintenance/Repairs Costs: Average maintenance costs are around 5-10 percent of the project's total cost.
• Miscellaneous Supplies (e.g., protective gear, snow rakes, etc.): Cost varies depending on type and quantity of supplies needed.

Starting a solar energy business involves several critical steps to ensure it runs smoothly and is protected against various risks. One of these essential steps is obtaining the right business insurance. Below are some key points to consider when looking for insurance for your solar energy business:

• Identify the types of risks associated with your solar energy business, including property damage, general liability, and professional liability.
• Consult with an insurance agent or broker who specializes in renewable energy to understand the specific coverage needs for your solar business.
• Consider purchasing general liability insurance to protect against third-party claims of bodily injury or property damage.
• Look into professional liability insurance, also known as errors and omissions insurance, which can cover claims related to professional advice or services provided.
• Assess the need for workers' compensation insurance if you have employees, to cover medical expenses and lost wages in case of work-related injuries.
• Explore business property insurance to protect your equipment, inventory, and office space from damage or loss due to events like fire, theft, or natural disasters.
• Review your policy options and compare quotes from multiple insurance providers to find the best coverage at a competitive price.
• Ensure that you understand the terms, conditions, and exclusions of your insurance policy to avoid gaps in coverage.
• Maintain compliance with any state or local insurance requirements for solar energy businesses.

Starting a solar energy business requires not only a strong understanding of solar technology but also an effective marketing strategy to reach potential customers. Your goal is to create awareness of your brand, educate your target market on the benefits of solar energy, and convince them to choose your services. Here's how to get started:

• Develop a Strong Online Presence: Create a professional website with clear messaging, and engage with customers through social media platforms to build trust and community around your brand.
• Content Marketing: Use blogs, videos, and infographics to educate your audience about solar energy benefits, system installations, and financial incentives, positioning yourself as an industry expert.
• Local Networking: Join local business groups, attend community events, and partner with other businesses to gain local visibility and referrals.
• Customer Referral Program: Encourage satisfied customers to refer friends and family with incentives, such as discounts or service upgrades.
• Targeted Advertising: Use targeted ads on platforms like Google and Facebook to reach potential customers who have shown an interest in renewable energy or home improvements.
• Collaborate with Builders: Partner with construction companies and contractors who can recommend your services to homeowners during the building or renovation process.

Once your solar energy business is up and running, expanding your reach and services can help you tap into new markets and increase profits. Here are some strategic steps to consider for growing your solar business effectively:

• Explore New Markets: Research and target new geographical areas or sectors that could benefit from solar energy, such as commercial or industrial clients.
• Diversify Your Services: Consider offering additional services such as solar panel cleaning, maintenance, or energy storage solutions to add value for your customers.
• Form Strategic Partnerships: Partner with other businesses, such as construction companies or home developers, to integrate solar options into their offerings.
• Invest in Marketing: Enhance your online presence, utilize social media, and consider SEO strategies to increase visibility and attract new customers.
• Stay Updated with Technology: Keep abreast of the latest solar technologies and innovations to offer cutting-edge solutions and maintain a competitive edge.
• Offer Financing Options: Make solar energy more accessible by providing financing plans or partnering with financial institutions to help customers afford installations.
• Expand Your Team: As your business grows, hire additional skilled staff or train your existing team to handle the increased workload and maintain high service standards.

How to Start a Solar Company

Starting a solar company can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful solar company.

Importantly, a critical step in starting a solar company is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Solar Company :

• Choose the Name for Your Solar Company
• Develop Your Solar Company Business Plan
• Choose the Legal Structure for Your Solar Company
• Secure Startup Funding for Your Solar Company (If Needed)
• Secure a Location for Your Business
• Register Your Solar Company with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Solar Company
• Buy or Lease the Right Solar Company Equipment
• Develop Your Solar Company Marketing Materials
• Purchase and Setup the Software Needed to Run Your Solar Company
• Open for Business

1. Choose the Name for Your Solar Company

The first step to starting a solar company is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your solar power business:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your solar company.

2. Develop Your Solar Company Business Plan

One of the most important steps in starting a solar company is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your own solar business.
• Company Overview – this section tells the reader about the history of your solar company and what type of solar company you operate. For example, are you a solar panel manufacturer, system installer, or a project developer? 
• Industry Analysis – here you will document key information about the solar industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your solar company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing efforts.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your solar company make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

3. choose the legal structure for your solar company.

Next you need to choose a legal structure for your solar installation business and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the solar company and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a solar business together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a solar company include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a solar company is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your solar company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Startup Funding for Your Solar Company (If Needed)

In developing your solar company business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a solar company to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a solar company that they believe has high potential for growth.

5. Secure a Location for Your Business

When you’re looking for a physical location for your new business, it’s important to think about the following factors:

-The climate: You’ll want to find a location that gets a lot of sun.

-The cost of land and property: You’ll need to find a location that is affordable.

-The zoning regulations: Make sure the location you choose is zoned for commercial use.

-The availability of utilities: You’ll need to make sure the location has access to power and water.

-The local economy: Make sure the location you choose is economically viable.

Once you’ve considered these factors, you can start looking for locations that fit your needs.

6. Register Your Solar Company with the IRS

Next, you need to register your solar energy business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your solar energy business’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your solar company to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

In order to start a solar panel business, you will need a few licenses and permits. You will need a business license and a contractor’s license, which allows you to work in the construction industry. You will also need a permit before installing solar panels, which is issued by your city or county government. You may contact your local government to learn more about the specific licenses and permits you will need.

10. Get Business Insurance for Your Solar Company

The type of insurance that is needed to operate a solar energy business can vary depending on the state in which the company is located.

Some business insurance policies you should consider for your own business include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

11. Buy or Lease the Right Solar Company Equipment

To run a solar company, you will need the following equipment:

• Solar panels
• Charge controllers
• Mounting hardware
• Installation tools

12. Develop Your Solar Company Marketing Materials

Marketing materials will be required to attract and retain customers to your solar business.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your solar business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional solar company website provides potential clients with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your solar company.

13. Purchase and Setup the Software Needed to Run Your Solar Company

The software you need to run a solar business is mainly accounting software and solar project management software such as SolarNexus or ENACT. Accounting software is necessary to keep track of your finances, while project management software can help you manage your projects more effectively. Other software that may be useful for solar businesses includes Customer Relationship Management (CRM) software and Computer-Aided Design (CAD) software.

14. Open for Business

You are now ready to open your solar company. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start a Solar Company FAQs

Is it hard to start a solar company.

No, it’s not hard to start a solar power business . There are plenty of resources available to help you get started, and the technology has become more accessible over the past several years. There are also incentives available to help make your solar panel installation business affordable.

How can I start a solar company with no experience?

If you're looking to start a solar power company but don't have any experience in the industry, there are a few things you can do. First, you can reach out to solar experts who are already in the solar business and ask them for advice. You can also attend trade shows and other events related to renewable energy to learn more about the industry. Finally, you can read books and articles about solar energy to gain a better understanding of how it works.

What type of solar company is most profitable?

The most profitable solar power companies are those that install solar panels for homeowners and businesses. These companies typically have a higher profit margin because the cost of the equipment is often covered by the customer.

How much does it cost to start a solar company?

The cost of starting a solar company will vary depending on the size and scope of the business. However, some rough estimates suggest that it costs anywhere from $10,000 to $100,000 to start a solar company.

What are the ongoing expenses for a solar company?

The ongoing expenses for a solar company can include marketing and advertising, employee salaries, rent or mortgage payments, and other administrative costs. It is important to factor these expenses into your business plan when starting a solar company, in order to ensure you are able to maintain profitability over the long term.

How does a solar company make money?

Solar companies make money by selling or leasing solar panels to homeowners and businesses. Aside from residential installation , they may also offer maintenance and repair services for the solar system. Some successful businesses also generate revenue by selling the electricity generated by the solar panels to utility companies. 

Is owning a solar company profitable?

Yes, owning a solar company is profitable. The main way a solar company makes money is by selling electricity, but they can also make money through government incentives , system installation and repairs, and other services. Solar companies have seen significant growth in recent years as the cost of solar technology has decreased and awareness of its benefits has increased.

Why do solar companies fail?

Many businesses fail because they are not able to generate enough revenue to cover their costs. In order to be successful, a solar company must be able to offer competitive rates while also managing its expenses. Other reasons for failure include poor management, a lack of innovation, and a failure to understand the market.

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Energy Strategy for the C-Suite

• Andrew Winston,
• George Favaloro,

Many companies spend millions or even billions of dollars on energy every year. This is not just costly, but also represents an often overlooked opportunity to reduce risk, increase resilience, and add value across the board. As environmental concerns grow more urgent and new technologies emerge, companies must respond to these shifts with a robust energy strategy. This article offers a five-step framework to revamp your company’s energy policy: Create a C-level mandate, integrate energy goals into the vision and operations, track progress companywide, tap new technologies, and engage stakeholders.

Energy is no longer merely a cost to be managed.

The Problem

Sweeping environmental, social, and business trends have propelled energy up the corporate agenda. But most firms still approach energy as merely a cost to be managed.

The Solution

Companies need a cohesive energy strategy that reduces risk, improves resilience, and creates new value.

Companies must create a C-level mandate, integrate energy goals into their vision and operations, track progress companywide, tap new technologies, and engage stakeholders. These steps are not revolutionary—but systematically applying them to a company’s energy use is.

Large companies spend millions, or billions, of dollars directly on energy each year—and millions more indirectly, on supply chain, outsourcing, and logistics costs. Yet outside the most energy-intensive industries, the majority of firms approach energy as merely a cost to be managed. This is a strategic mistake that overlooks enormous opportunities to reduce risk, improve resilience, and create new value.

• Andrew Winston is one of the world’s leading thinkers on sustainable business strategy. His books include Green to Gold , The Big Pivot , and Net Positive . AndrewWinston
• George Favaloro  is a managing director in the sustainability services group at PwC. Follow him on Twitter @GeorgeFavaloro.
• Tim Healy is the chairman and CEO of EnerNOC, an energy intelligence software provider.

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How to Become a Renewable Energy Entrepreneur

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

From photovoltaic solar panels to kinetic energy adapters that generate electricity from pedaling stationary bicycles, entrepreneurs are taking advantage of the green revolution by finding and marketing renewable energy solutions.

Since we use energy for almost everything, the recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals.

But is this just a fad? Or are there viable business opportunities for the long term?

Key Takeaways

• Not every entrepreneur is an investor. Consider opportunities for green services.
• Focus on the industries you're most familiar with.
• Consider government financing sources.

Renewables Are Here to Stay

As the global population rises, the reality of finite resources is sinking in. Our energy requirements cannot depend on fossil fuels forever. Advances in technology have allowed us to tap into reserves that were inaccessible in the past, but that only delays the inevitable.

These concerns, along with the negative impacts of burning fossil fuels, have created an environmentally and socially conscious mindset among different sets of economic actors, including consumers, investors, corporations, and governments. Companies and investors looking for profits have taken advantage of consumer interest in cleaner energy alternatives and government-incentivized green business initiatives.

With all these factors driving the shift towards renewable energy, now is the time to start looking for opportunities to help solve the world’s energy problems and, perhaps, make money doing it.

Recognizing the Opportunity

There are innumerable opportunities for implementing an innovative renewable energy solution. However, the best place to start looking is in your own area of expertise. Think about the industries you’ve worked in and how renewable energy could benefit them.

Also, remember that becoming a renewable energy entrepreneur doesn’t mean you have to build your own wind farm or hydroelectric dam. Renewable energy is about more than just electricity generation. It is also about storage, conservation, and distribution.

Product or Service?

You also don’t need to invent a new product or technology. You can get involved in installation, repair and maintenance, or consulting.

Think broadly, and focus on your areas of expertise.

Finally, brainstorm with friends, family, and colleagues about things that people want or need.

Some people build a business around an idea and then try to sell that idea rather than building the business around something people already want to buy. Green consumers are no different.

Green Consumer Challenge

Despite all the hype about environmental sustainability, the evidence suggests that green consumers look for the same things most consumers want: individual benefit at a low cost.

Although the environmentally conscientious market, labeled LOHAS (Lifestyles of Health and Sustainability), is growing, the green market is still relatively niche. Marketing to everyone else means educating consumers on the advantages of renewable energy, including showing them how it can add value to their lives at a lower cost.

Beyond the LOHAS

Consumers are not the only group that one needs to consider when looking for the right opportunity. Think about how the product or service will affect or be affected by others, such as suppliers, the government, the competition, and financing organizations like banks.

All of these actors could have an impact on the success of your business, so it is helpful to think about the role they will play while you’re in the development stage .

Developing a Business Plan

In devising a business plan , it is helpful to determine if there are other businesses in other regions of the world that are already offering a similar product or service. Look at the fundamentals of those businesses and use them as models for developing your own plan.

The percentage of entrepreneurs who invest some personal savings in the early stages.

Regardless of how extensive you decide to make your business plan, you definitely need to do some initial market research and summarize a business concept. You will want to analyze costs, make revenue projections, and set out some key milestones for developing and launching your business.

Talk to Potential Customers

Remember to conduct interviews with potential customers in order to get a sense of the demand for your product or service and how best to introduce it to the market.

Also, contact suppliers to get price quotes on materials and services that you will need to manufacture your product or deliver your service.

Once you’ve completed your business plan, it is time to figure out how you are going to finance your business.

Financing Your Business

Every business succeeds or fails on the basis of its ability to sustain itself financially, but it could take some time before revenues are large enough to cover costs.

Although there are a number of financing options for new businesses and startups, the research shows that almost 90% of entrepreneurs invest some personal savings at the early stages of their business. And more than 74% said that personal savings were the primary source of initial financing. Using your own savings may also show other potential investors that you are serious about the future of your new venture.

The Options for Financing

Some entrepreneurs obtain financing from banks, venture capital , angel investors, or the government. The first two options may be harder to obtain in the early stages as they tend to demand to see an existing company with strong growth potential before forking over the money. Angel investors, those who offer new and fledgling businesses capital in exchange for equity, are also possible funding options, but tend to offer smaller amounts.

While it can take some time to receive approval and not all businesses are eligible, government funding could be a good way to go given the numerous incentives for cleaner, more sustainable technologies and services.

Visit the U.S. Department of Energy site for current energy efficiency and renewable energy funding opportunities and the National Renewable Energy Laboratory (NREL) site for renewable energy project financing information.

The Bottom Line

Once you’ve had an idea, made a plan, and figured out how to finance your business, you’re on your way to becoming a renewable energy entrepreneur.

But the work has just begun. Now you’re going to have to convince consumers to spend money on your product or service. This is not easy, but it can be rewarding, especially considering that you're sustaining not only your livelihood but that of people all over the world for generations to come. Renewable energy entrepreneurs may just save the planet yet.

RetailMeNot. " 4 in 5 Consumers Think Eco-Friendly Products Cost More 'Green .'"

Eric Koester. " Green Entrepreneur Handbook: The Guide to Building and Growing a Green Business ," Page 88. CRC Press, 2016.

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• Business Plans Handbook
• Business Plans - Volume 08
• Energy Solutions Company Business Plan

Energy Solutions Company

BUSINESS PLAN     ABAKA ENERGY SOLUTIONS

1200 Manistee Way Portland, Oregon 97209

Abaka Energy Solutions will empower the world's underdeveloped communities through the application of solar and wind energy technologies. The company will become the world's leading provider of renewable energy (RE) products and services, with projects potentially spanning all seven continents by 2014. This business plan was provided by Jason P. Spellberg and Gaspar V. Makale, and was compiled in conjunction with the business plan preparation courses at the University of Colorado.

EXECUTIVE SUMMARY

Company overview, products & services, industry & marketplace analysis, marketing strategy, operations strategy, development strategy, management team, financial summary.

• APPENDICES & FINANCIAL STATEMENTS

Company Overview

Abaka Energy Solutions will empower the world's underdeveloped communities through the application of solar and wind energy technologies. The company will become the world's leading provider of renewable energy (RE) products and services, with projects potentially spanning all seven continents by 2014.

Industry & Marketplace Analysis

One third of the world's population has no electricity. The majority of these people live in rural, remote areas of the world's poorest nations. Global development is a multi-billion dollar industry, with the World Bank providing huge sums of money to fund large-scale projects. In the past ten years, global electricity demand has grown by 40 percent. During this time, the use of RE has expanded at ten times the rate of fossil fuels. Experts predict that the world's electricity demand could triple by 2020, a colossal increase that will be fuelled by the industrialization of developing countries. As a specialty provider and integrator of RE systems designed for developing communities, Abaka will position itself to capitalize on this explosive trend. Abaka will establish its first project in Karagwe, Tanzania, which lies near the western shore of Lake Victoria, deep in sub-Saharan Africa.

Products & Services

Abaka will introduce affordable electricity to Karagwe by offering attractive financing options for solar electric systems. This will enable families to make purchases in small monthly installments, in the same way that a consumer would buy an automobile in the United States. In addition, Abaka will construct a 15,000-watt solar/ wind power station and community center, where services such as electric coffee processing, water pumping, refrigeration, computing, telecommunications access, and Internet browsing will be sold. This community center will also serve as a nucleus of education, where Karagwe residents will be exposed to a contagious spirit of entrepreneurship. The services provided here will enable, motivate, and educate people to start new businesses. In this way, Abaka's presence in Karagwe will substantially boost the region's economic prosperity.

Marketing Strategy

Karagwe is a dispersed farming community of 350,000 people. The area is so remote that power lines may never be extended there, and only 2 percent of the population has electricity. Abaka's target customer is a Karagwe family that earns about $700 per year. A basic solar electric system will be priced at $288, or $24 per month. Market research conducted in Karagwe strongly suggests that this price is feasible, despite the fact that it represents 45 percent of a typical family's annual income. Currently, Karagwe families use crude and dangerous kerosene lamps to light their homes, and expensive dry-cell batteries to power their radios. A solar electric system is safer, more reliable, provides better lighting, and promises better value than the alternatives mentioned above. Construction of the power station and community center will advertise Abaka's dedication to a sustainable, long-term presence within the community. Abaka has partnered with a local company called the Seattle Solar Electronics Workshop (SSEW). Working with SSEW, Abaka will sponsor informational forums to educate customers about the economic benefits of financing, the technology behind solar electricity, and the use of electricity in cultivating a prosperous economy.

Operations and Development

In October 2000, Abaka will begin building the power station and community center.

An expert in the RE field has been recruited to design this station, and to oversee its construction. SSEW will run all operations of the business in Karagwe, including inventory handling, payment collection, product distribution, and maintenance repair. All power systems will be sold to customers as pre-packaged kits, assembled by SSEW employees.

Management Team

Liam Stiller, Abaka's founder, is completing his M.B.A. in Entrepreneurship at the University of Oregon. He has traveled extensively in East Africa, and has forged a business partnership with Ghin Patel, owner of SSEW. As permanent employees, the founders will seek, identify, and finance lucrative new project opportunities all over the world. Mr. Patel will also oversee Abaka's operations in Karagwe.

Summary of Financials and Offering to Investors

In Karagwe, solar kit financing will generate almost $800,000 of net income, and $2.7 million in accumulated cash, by 2006. Abaka will seek $1 million in a single round of seed financing to fund the construction of the power station and community center. Abaka will seek this capital from private accredited investors, nonprofit relief agencies, or possibly as a partnership with a global technology company interested in penetrating emerging markets. Abaka's presence in Karagwe will drastically improve the community's prosperity, thereby building real demand for electronics and telecommunications products and services. In exchange for capital and strategic support, Abaka will offer an investor equity, and will additionally offer a partner company direct, unlimited access to these markets at the grass-roots level. Abaka is dedicated to improving the lives of the world's underprivileged people by promoting the use of clean renewable energy. Therefore, Abaka also offers investors association with this noble initiative.

The commitment of Abaka Energy Solutions will be to spread technologies for harnessing renewable energy (RE). The term "renewable" refers to sources of energy that can never be diminished or exhausted, such as wind and sun. The most common commercial RE technologies are photovoltaic (PV) modules, wind turbines, and, increasingly, fuel cells, which produce electricity from solar radiation, wind, and hydrogen, respectively.

Vision Statement

To become the world leader in the creation, development, and deployment of technologies that converge the advancement of human civilization with that of the environmental condition.

Three-Year Mission Statement

To profitably and sustainably introduce renewable energy into the world's underdeveloped communities.

Current Status

Abaka Energy Solutions will be organized as a Delaware C-corporation, with an executive office in Portland, Oregon, USA, during the first quarter of 2000. The company will serve as a for-profit holding, investing, and consulting agency, and will work in partnership with developing communities to establish sustainable RE projects all over the world.

Market & Services

Abaka will immediately specialize in providing electricity and electric services for rural communities, and will utilize two different business strategies to distribute power. First, Abaka will sell solar electric systems for home and commercial applications by allowing customers to finance the cost of these systems over time. Second, the company will offer end-user services direct to customers by establishing electrified community centers in the heart of their villages. At these centers, people will be able to purchase services ranging from crop processing to refrigeration to telecommunications access to internet browsing.

Abaka's first RE project will be in Karagwe, Tanzania, a remote agricultural community in East Africa. The company will aggressively expand into a global provider of RE products and services by seeking new opportunities in other parts of Africa, as well as in Asia and Latin America. By 2014, Abaka will be the world's undisputed leading provider of RE products and services, and will operate Research & Development divisions for creating innovative novel technologies that address the environmental crises of the twenty-first century. This business plan will present Abaka's strategy for getting started, by establishing a profitable and sustainable RE business in Karagwe, Tanzania.

Description of Services

Abaka will offer financing packages for home and commercial-scale solar electric systems. The retail price of a small solar electric system in rural Africa is around $800. Abaka will enable Karagwe customers to purchase systems in affordable monthly installments, similar to the way most people in the United States purchase automobiles. These financing options will be especially popular in poor communities such as Karagwe, where affordability drives a preventative wedge in a customer's ability to buy. This business plan will mainly describe the financing aspect of Abaka's operation in Karagwe.

To solidify people's confidence in these financing options, and to demonstrate the company's dedication to the community, a 15,000-watt solar/ wind power station and community center will be constructed in Karagwe. A number of end-user services will eventually be provided at this community center, such as coffee bean processing, food storage and refrigeration, battery charging, water distilling, computing, telecommunications access, and Internet browsing. In addition, an educational center will be instituted, where customers will learn how to use electricity and technology to start new businesses, or to expand existing ones. Most of these services will be provided within a year after Abaka's initial establishment in Karagwe, but eventually they will generate as much as 75 percent of the company's revenue. All of these services will be designed to help Karagwe residents augment their incomes. In this way, Abaka hopes to foster economic activity, and thus prosperity, within the community. This business plan will not describe the community center aspect of Abaka's operation in detail, but the offering of these services is part of the company's long-range plan for development in Karagwe.

Proprietary Rights

In Karagwe, and in all other project sites, Abaka will seek partnership with a local organization to help with operations, marketing, legal negotiations, and other important aspects of conducting business. Abaka's partner in Karagwe is a natively owned company called the Seattle Solar Electronics Workshop (SSEW). SSEW was founded in April 1999 by Mr. Ghin Patel, a Tanzanian electrical engineer and entrepreneur. Mr. Patel and Mr. Stiller, Abaka's founder, are close friends, and have been in business together for close to two years. It is virtually impossible for any foreign company to conduct effective or sustainable business in a poor, developing community without trustworthy local contacts. Besides SSEW, there is no company in Karagwe that has the technical capability, or the entrepreneurial innovation, to establish a joint venture of this kind. As such, Abaka is confident that no other foreign company will be able to enter this market.

Stage of Development

Although fifty years of market exposure have proven RE technologies to be unequivocally reliable and durable, the commercial RE industry is still in its infancy, and the electricity markets in developing parts of the world remain almost completely untapped. A business solution is needed to meet the challenge of profitably selling this expensive, high technology equipment to people with meager incomes. In the past five years, a number of strategies have been implemented in rural, developing markets with astounding success. Almost all of these models have extended a micro-credit or financing option to their customers. These successful companies, which will be further discussed in the Industry Analysis section, have proven the efficacy of the business model that Abaka will apply in Karagwe.

Industry Analysis

As an RE service provider targeting emerging markets, Abaka will compete in the industry known as Renewables for Sustainable Village Power (RSVP). RSVP is a small, but fast-growing subset of the gigantic global energy industry, which is currently experiencing an economic revolution. One significant characteristic of this revolution has been astonishing growth. Over the past ten years, for instance, the world's demand for electricity has increased by 40 percent. Experts predict that, as industrialization sweeps developing countries, current demand could triple by 2020. Because so many new electricity users live in remote areas, most of this increased demand has been, and will continue to be, serviced by RE. As a result, renewables are by far the fastest growing segment of world energy use.

The second trend of importance is privatization and deregulation. Over the past five years, this has been a global contagion, especially in developing countries, where governments continue to implement aggressive policies designed to attract foreign investment. Tanzania, for instance, adopted the National Investment Promotion and Protection Act in 1990, which guaranteed the privatization of several key industries, including energy. The opening of these economies has sparked the proliferation of scores of small, entrepreneurial energy companies striving to profitably satisfy the need for rural energy development. Some, such as the Grameen Bank of Bangladesh, the Solar Electric Light Fund of Thailand, and Soluz of the Dominican Republic, have developed profitable business models based on selling solar electric systems through micro-credit arrangements. Meanwhile, large companies such as Enron, Shell Oil, and British Petroleum/ Amoco have established dedicated RE divisions, and are aggressively executing multi-million-dollar RE projects in places such as Indonesia and South Africa.

But despite this recent surge of activity, the RSVP industry still faces some imposing challenges. For example, the vast majority of people who most need RE technologies still cannot afford them. Substantial increases in end-user purchasing power have remained elusive, and, as a result, sales are not close to what they could be. Consequently, RE manufacturers have been unable to drive economies of scale enough to cost-compete with fossil fuels. Another problem is the lack of skilled RE technicians in developing countries. There are only a handful of training centers in the world teaching RE system installation. Finally, international turmoil remains an imposing obstacle. In many countries, political and economic instability has prevented the long-term investment and presence needed to sustain RE projects.

These challenges are typical of any global industry that is only just beginning to mature, and real progress is being made to address them. Over the past decade, for instance, PV production costs have been reduced by 80 percent (an additional 50 to 75 percent is required to cost-compete with coal-fired electricity). Furthermore, experts predict that economic and industrial development in emerging countries will lead to a 100 percent increase in world income by2020. As prosperity builds demand for electricity, RE training centers are being established in the developing world, such as the highly respected Institute for Solar Training in Karagwe. Furthermore, despite civil wars and social unrest, there are scores of developing countries, like Tanzania, where political stability harbors fantastic economic opportunity. Many experts predict that this global "Energy Revolution" contains the seed that will become the world's premier growth industry of the twenty-first century.

Marketplace Analysis

Tanzania. Tanzania is the largest and most peaceful nation in East Africa. The country has demonstrated over 38 years of political stability, and is governed by a multiparty democracy based on English common law. Tanzania has posted an average annual economic growth rate of 3.5 percent over the past ten years, however inflation currently lingers at 13 percent. Tanzania's GDP is expected to grow at 5 percent annually through 2002. Agriculture is the nation's primary industry, accounting for 56 percent of its GDP, and employing over 90 percent of its workforce. Only 24 percent of Tanzania's population live in urban areas, meaning that the country's 32 million people are widely dispersed over an area more than twice the size of California. Between 1986 and 1991, demand for electricity in Tanzania grew at an average annual rate of 10.2 percent, a trend that is expected to continue. Over 75 percent of Tanzania's electricity consumers are served by hydroelectric power, and the country experiences generation shortfalls during drought conditions. Almost all of Tanzania's electricity usage is confined to its urban areas.

Karagwe. Karagwe is a remote farming community in the northwestern corner of Tanzania, about 100 kilometers from the western shore of Lake Victoria, at a geographic position of two degrees south latitude. The region experiences two dependable rainy seasons per year, and receives an annual average of about five peak sun hours per day, roughly 10 percent more than Denver, Colorado. About 350,000 people, or 60,000 households, live in this region, which is situated on a wide, sloping ridge at an elevation of 1,650 meters (5,400 feet) above sea level. The prominence of this ridge above the surrounding plain leaves it exposed to the tropical trade winds, which consistently blow from the west. There are few regions in the world that boast such abundant RE natural resources. Almost every household in Karagwe is surrounded by a plantation of several hectares, and coffee is the community's chief cash crop. The average yearly income is about $700 per family, and, though this is strikingly poor by Western standards, Karagwe is one of Tanzania's most prosperous rural communities.

Customer Analysis

Karagwe is an extremely dispersed village, with 350,000 people living in an area of 3,200 square kilometers. As a result, only 1.4 percent of Karagwe's most centralized homes and businesses are electrified by the regional utility grid, while 0.6 percent are electrified with solar power. The remaining 98 percent have no hope of seeing the grid extended to their homes during the next ten years. Residents of Karagwe realize that modernization cannot take place without electricity, and that access to electricity will significantly enhance their economic prosperity and quality of life. As a result, it is no surprise that 100 percent of the fifty or so Karagwe residents surveyed during the summer of 1999 indicated a strong desire to participate in a financing program that would allow them to afford a solar electric system.

Karagwe families live in large houses, typically constructed of brick and concrete. Each house has three to five bedrooms, a kitchen, a living room, a washroom, and an animal pen. Families submit no property taxes or mortgage payments. Furthermore, because Karagwe is a farming community, residents spend very little on food, except for the few items, such as rice and fish that must be imported from surrounding districts. Very few people in this village possess an automobile, and those who do earn three to ten times more than the average yearly income. Aside from a handful of bars, restaurants, grocery stores, and weekly farmers' markets, Karagwe offers very little for the consumer. Because there is not much in this community to spend money on, Karagwe families tend to retain a purchasing power that is greater than half of their annual income. Nevertheless, due in large part to the inflationary pressures and banking crises that have plagued Tanzania ever since the 1960s, people are generally unfamiliar with the concept of saving money. Only in the past few years have stabilized banks begun to earn the trust of Tanzanian consumers, and in the rural parts of the country, this trend is proceeding quite slowly.

Despite these simplistic financial tendencies, the typical Karagwe resident is quite sophisticated, and understands the benefits of solar electricity. Karagwe is home to Africa's most distinguished solar training facility, where Abaka's Africa Operations Officer, Mr. Ghin Patel, is chief of faculty. Because of the international recognition of this school, Karagwe residents know that solar electricity represents a clean, safe, and reliable way to power their homes. Unfortunately, however, even a small solar electric system costs about $800 retail in Africa, and only the richest families can afford this price. As a result, most families continue to light their homes with crude kerosene lamps, and to power their radios with inefficient dry cell batteries. Nevertheless, the demand for solar electric systems latently exists in Karagwe, and it is up to Abaka to tap this market potential by making these systems affordable for the average Karagwe family.

Competitor Analysis

Competing Technologies. Because solar electric systems are so expensive in Karagwe, they are viewed as luxury items. Almost every family would love to have one, but affordability is a preventative issue. As such, people must use more conventional methods of lighting their homes. Kerosene and dry cell batteries are readily available in Karagwe, but neither item is particularly cheap. Kerosene sells for about fifty cents per liter, and a typical family uses four to six liters per month; many organizations, such as schools and health clinics, use twenty to fifty liters per month. Dry cell batteries retail for about $3.00, and may last two or three weeks at the rate most families use their radios. Some families also own gasoline gensets, while still others own automobile batteries, which they charge with gensets, or at a grid station in the central part of the village. Abaka's chief competition in Karagwe is certainly kerosene and disposable batteries, and solar has several advantages over them. First, kerosene lamps are crude and dangerous; it is easy to find an adult in Karagwe who has been burned, at some point in his or her life, by a kerosene lamp leaking, spilling, or completely exploding. Furthermore, kerosene lamps provide lighting that is only somewhat better than a large candle, and they tend to be noisy and smelly during operation. Dry cell batteries are expensive because they must be replaced so frequently, and their disposal poses a serious environmental threat. Also, many appliances cannot be powered with batteries. A solar electric system, on the other hand, is clean and safe, and provides the familiar fluorescent, white light that can illuminate an entire room. Furthermore, a solar electric system can be used to power any electric appliance. It offers modularity, flexibility, and expandability, so that one single power source can be used for the house's every electrical need. Additionally, these systems are extremely reliable, and require only minimal maintenance on, and periodic replacement of, the battery. If well maintained, a solar electric system will last for thirty years. Solar electric systems are more expensive than conventional alternatives in the short-term, but in the long run provide a far superior value for the money.

Competing Service Providers

Aside from Abaka's partner, SSEW, there are no businesses or organizations providing solar electricity in Karagwe. Furthermore, there is not a single organization in all of northwestern Tanzania that offers financing for solar electric systems. The national utility, the Tanzania Electric Supply Company (TANESCO), has no intention of expanding the utility grid into the periphery of Karagwe for at least ten years. Furthermore, this company has no understanding of solar electricity, and maintains only a minimal presence in Karagwe. TANESCO is not equipped to effectively compete in this marketplace.

Target Market Strategy

In order to make solar electricity affordable, Abaka will offer families and businesses the option of paying for their system in twelve monthly installments. The smallest kit offered will be priced at $24.00 per month. This translates into a year-end price of $288, which is a tremendous saving over retail. Because people in this region maintain a purchasing power equivalent to about 50 percent of their annual income, Abaka's principal target market is families that earn at least $600 per year. It is estimated that roughly one-third of Karagwe's households earn this amount or more, meaning that Abaka's primary target market in Karagwe consists of about 19,000 families.

Service Strategy

Financing Terms. Many micro-credit programs have failed in developing communities because customers have been allowed to default on their loans. It can be extremely difficult both logistically and financially to repossess equipment in remote villages of foreign countries. To circumvent this problem, Abaka will offer "pre-financing" plans to its customers. Under the terms of these pre-financing options, customers will have to pay their entire balance before Abaka will give them a system. There are two reasons why this is necessary in Karagwe. First, people in developing countries often do not understand the concept of credit, and, especially when an American company is the lender, regularly assume that "credit" means "free." Second, industrialized nations have repeatedly allowed governments and businesses in the developing world to default on their debt. People in these communities, Karagwe included, are accustomed to receiving free handouts from the World Bank and industrialized governments. It is unlikely that Abaka can establish a high-growth, sustainable business in Karagwe if expensive electrical systems are provided, but money is not collected. As such, customers will pay for their systems first, in entirety, before they receive them; no exceptions will be allowed.

Because the financing plans will have one-year terms, Abaka must offer customers something while they pay for their electric systems. This is where the community center will be useful. During the terms of their financing contracts, Abaka's customers will be allowed to utilize all services at this community center free of charge. These privileges will end upon fulfillment of the financing agreement, or if a customer defaults on several payments. This strategy will allow Abaka to collect money before distributing systems, and will encourage customers to fulfill their financing agreements. Abaka will gladly accept down payments for customers desiring shorter financing terms.

Solar Electric Kits. Abaka's solar electric systems will be sized to meet the needs of a typical Karagwe household.

Very few Karagwe homes have the need to power anything more extravagant than a few fluorescent lights and a radio, and therefore these systems will be small by Western standards. Each system will come with a solar panel, a deep-cycle battery, a charge controller, lights, a radio, wiring, connectors, and mounting materials. In order to serve the expected high demand for affordable solar electric systems in Karagwe, all systems will be sold as pre-assembled kits. These kits will be designed to be so simple that end-users will be able to perform the installations themselves. In this way, Abaka will minimize the size of its technical staff. Initially, there will be three kit sizes offered. The following table presents a spec and price comparison of Abaka's introductory product line. For homes or businesses requiring more power, customized systems will also be available. Furthermore, as the community becomes more prosperous, people will develop more extravagant tastes for electric appliances and equipment, such as television sets, satellite dish receivers, refrigerators, and computers. Abaka will continuously readjust this product line according to customers' power needs. In addition, attractive trade-in and scale-up plans will be offered to customers in subsequent years, so that smaller systems can be traded in and upgraded to larger ones.

Abaka's Initial Product Line

Pricing Strategy

Abaka will price these kits as low as possible while still yielding an attractive profit. Based on Prouffer's experience in Indonesia between 1994 and 1998, it is expected that a family living in an impoverished, rural agricultural community will surrender about half of its yearly income for a necessary item such as reliable electricity. With the pricing strategy that Abaka has adopted, Karagwe consumers will pay less than half of what a comparable solar electric system would cost from a typical African retailer.

Distribution Strategy

The community center will be used as Abaka's administrative office and distribution hub. Most of the components of the solar electric kits will be shipped by sea from suppliers in the U.S. or Europe to the Indian Ocean port of Dar es Salaam, then trucked overland to Karagwe. Abaka will also attempt to identify reliable suppliers in South Africa to reduce its dependence on overseas shipping. Upon arrival in Karagwe, SSEW will be responsible for assembling all components into complete solar electric kits, ready for installation. When customers have satisfied their payment schedules, they will be cordially thanked for their business, and invited to pick up their kits from the community center. At this time, customers will be given written instructions on how to install and maintain their new systems. During their payment period, and throughout their duration of ownership, all Abaka customers will be invited to attend free educational workshops on using, maintaining, optimizing, and expanding their solar electric systems.

Advertising & Promotion Strategy

Abaka will rely greatly on publicity and word-of-mouth advertising to promote these financing plans. The construction of a 15,000-watt solar/wind power station and community center will be tremendous news in Karagwe, and will therefore serve as a very useful promotional tool. Residents will be unable to avoid noticing the sheer scale of this project. Over 100 people will be employed in this undertaking, and every newspaper and radio station in the region will publicly monitor its progress. Like many rural agricultural villages, Karagwe is a tight-knit community, and people tend to be extremely social. Abaka will have to do little to instigate excitement and conversation about this project. Once built, the generating facility, featuring a 10,000-watt wind turbine perched on an eighty-foot tower, and a 5,000-watt array of sleek solar panels mounted on a 10,000-square-foot scaffold, will serve as a constant advertisement of the electricity that Abaka offers.

Due to the visibility of this project, Abaka will ensure that high standards of professionalism are maintained at all times. Embroidered uniforms will be distributed to the SSEW technicians that maintain and operate the community center. New, high-quality equipment will be purchased, and the community center itself will have a clean, modern design. Service will be prompt and courteous, and technicians will be well trained and well paid. To complement the publicity aspect, Abaka will also post billboards in the heavily trafficked "downtown" area of the Karagwe district. The main purpose of these billboard advertisements will be to inform and remind customers of scheduled educational training sessions and technical demonstrations being held at the community center. In addition, posters will be used to announce new service offerings or price adjustments, as needed. Finally, professionally printed brochures, featuring concise descriptions of the financing plans offered, as well as general information about solar energy, will be widely distributed.

Sales Strategy

Ghin Patel, the founder and executive officer of SSEW, is a native of Karagwe, and has been installing solar energy systems there for eight years. Mr. Patel's expert reputation is common knowledge in the community. All sales and operational responsibilities will be contracted to SSEW, taking advantage of Mr. Patel's contacts and stature in Karagwe as a solar energy professional. Because SSEW's name is already well known to the community, customers will be dealing directly with a local company that they trust. A customer service office and reception desk will be established at the community center, and SSEW will collect payments at this location. In exchange for these services, and for using the SSEW name to generate trust and loyalty, Abaka will pay SSEW a contracting fee based on sales volume. Therefore, SSEW will have an incentive to aggressively generate sales by subscribing new customers, in whatever fashion they deem appropriate or effective.

Marketing & Sales Forecasts

Abaka's projected target market in Karagwe is about 19,000 families. There are 58,000 families in the region without electricity. However, these pre-financing plans will be expensive. Furthermore, customers will have to pay all of their monthly installments before receiving any equipment. Abaka recognizes that this will initially dissuade many potential customers. However, the construction of the power station and community center, as well as the partnership with SSEW, will help to reinforce Abaka's trustworthiness, and should neutralize some of these concerns. In addition, Abaka will allow subscribed customers to use the community center for free during their contract term. This means that customers will be able to enjoy free access to computers, refrigeration, water distilling, coffee bean processing, telecommunications access, and other services, for up to a year. Abaka anticipates subscribing about 250 families in 2001, the first year of operation. After one year, Karagwe residents will witness the delivery of solar electric systems purchased the previous year by their friends, neighbors, and relatives. The demand for these financing contracts will therefore increase exquisitely over the next five years, as Abaka's trustworthiness becomes confirmed, and its presence accepted, by the community. Furthermore, similar projects in other parts of the world have demonstrated that the availability of energy systems motivates people to increase their income by working harder, and then to save more of that income, in anticipation of having something valuable to buy. As a result, more Karagwe families will be able and willing to afford Abaka's financing plans over time, and the growth rates built into Abaka's revenue forecasts reflect this expectation. The following table shows sales and revenue forecasts for the years 2001-2006.

Bim Stiletto, a primary schoolteacher in Karagwe, arrives home after a long day of work. It is nighttime in Africa, and pitch black envelops the quiet community. There are no street lights, no glows in the neighbors' windows; only the brilliant stars of the Southern Cross provide illumination. But on this night, Mr. Stiletto arrives to find his house teeming with activity. The solar electric system he spent a year buying has finally arrived, and his family is already putting it to good use. His wife is busily cooking in the kitchen, his eldest son studiously doing homework, and his two youngest children playing Monopoly, all possible due to the streaming radiance provided by the fluorescent lamp in the living room. Had this been a typical night in a typical Karagwe house, Mr. Stiletto would have to wait his turn to use one of the household's two kerosene lamps, for he has about thirty exams to grade. In other words, he would be up late, long after his family had retired for the night. But as he greets his family working and playing under this new artificial sun, Mr. Stiletto realizes that the "typical" Karagwe evening has now changed forever.

Customers will start their lifetime relationship with Abaka upon receipt of their first solar electric kit. In time, they will learn to effectively apply the full potential of solar energy, and they will completely replace archaic kerosene lamps and dry cell batteries with the solar electricity that will become the routine hallmark of the future for communities like Karagwe.

All of Abaka's operations in Karagwe will be contracted out to SSEW. Mr. Ghin Patel, founder and CEO of SSEW, will serve as Abaka's Chief Operating Officer for this project. Mr. Patel will facilitate dealings with the Tanzanian government, as well as with Karadea, an influential UN-funded nongovernment organization that will be heavily utilized, both in the construction of the power station and in ongoing operations.

Scope of Operations

SSEW will be responsible for conducting the following activities in Karagwe:

• Operating and maintaining the power station and community center
• Placing supply orders and maintaining inventory
• Overseeing and orchestrating solar kit assembly and distribution
• Collecting customer payments
• Servicing customer repair calls and manufacturer's warranties
• Printing and distributing advertisements, such as billboards, posterboards, and brochures
• Subscribing new customers and up-grading current and past customers
• Organizing informational forums and instructional demonstrations

Abaka will negotiate the most attractive supply agreements possible, and all purchases will be made directly from manufacturers at wholesale prices. Additionally, all shipping will occur via ocean, to the Tanzanian port of Dar es Salaam. Supplies will be trucked overland to Karagwe from the Indian Ocean coast. To avoid import duties, all batteries will be purchased in bulk directly from the Acme Exide Company, a Tanzania manufacturer. Lights, charge controllers, wiring, connectors, and radios will be purchased in bulk from wholesale suppliers in the United States, Europe, or South Africa. Solar modules will be purchased directly from WorldSolar, Inc, a Eugene, Oregon-based company with production facilities in India. Wind turbines and towers will be purchased from and installed by Rossimond Light & Power, of Forrestville, Wisconsin. Building and security materials will be purchased in the United States, South Africa, or Kenya. Abaka will be able to legally avoid all import duties through Mr. Patel's association with Karadea, which enjoys complete exemption from most Tanzanian tariff laws. A temporary workforce of about 100 will be hired in Karagwe to build the power station and community center. Rossimond Light & Power will design, oversee, and orchestrate the construction project, with all Abaka officers present to oversee progress and to direct funding.

Ongoing Operations

After the power station and community center are completed, a full-time workforce of three to five maintenance technicians and two to four security agents will be hired and paid directly by SSEW for salaries in excess of $1,000 per year. Rossimond Light & Power will thoroughly train SSEW technicians on proper maintenance and operation of the power station. Insurance on hard assets will be purchased from a trustworthy agency in Tanzania.

SSEW will be charged with the responsibility of maintaining customer relations and satisfaction. This will include subscribing new customers and taking care of existing ones. SSEW will provide free maintenance or repair visits to customers' homes for one year after the equipment's initial installation. Additionally, SSEW will help and encourage customers to upgrade to larger power systems. Used components in good working condition will be accepted as trade-in for credit on a larger system. Furthermore, customers will be encouraged to return their used batteries to SSEW, which will send them out for proper recycling. Price credits towards the purchase of new batteries will be given to all customers who dispose of their old batteries in this manner.

SSEW will be in charge of hiring and maintaining a trained local workforce. Because Mr. Patel has taught at the Institute for Solar Training for six years, he knows who the most competent technicians are, and how to find them in East Africa. Abaka will provide the financial resources to help Mr. Patel attract these technicians to Karagwe.

Operating Expenses

The following table shows Abaka's anticipated operating expenses from 2001-2006.

Abaka will assemble a legal team and incorporate during the first quarter of 2000. After completing and revising the business plan, the company will begin to seek grants and investments from accredited private investors, multi-national relief agencies, and, possibly, from large corporations.

There will be some need for product development and prototyping in Karagwe. Solar electric systems consist of four main components. The solar panel harnesses photon energy from the sun, converting radiation into electricity. This electricity is then conditioned by a charge controller before it is sent to a battery for storage. The charge controller regulates the battery's state of charge, preventing it from being damaged. The appliance, then, receives its power directly from the battery. This system has been used and perfected for well over fifty years, and Abaka's kits will not deviate from this simple design. Nevertheless, Abaka's solar electric systems will be sold as pre-assembled kits. Because customers will be expected to perform their own installations, Abaka will need to test customer reaction to these kits. Specifically, Abaka will assemble several versions in order to develop a packaging method that optimizes simplicity for the customer. Prototype testing will be conducted simultaneously with the construction of the power station and will take less than one month to complete.

Once in Karagwe, Abaka and SSEW will focus on developing market demand for the financing services. Because these financing plans will be expensive, and because no equipment will be distributed until all payments have been received, it will take time for Abaka to earn the trust of Karagwe's consumers. However, Abaka is convinced that this can be done within one year. First, utilization of SSEW, a Karagwe company that people already know and trust, will help to lend credibility to Abaka's promises. Second, the power station and community center will represent a symbol of Abaka's long-term commitment to the community. Finally, Abaka will lead by example; when working solar kits are delivered to the first wave of customers, Abaka's trustworthiness will be ultimately confirmed. By this time, Karagwe's demand for these systems will be growing fantastically.

Development Timeline

Project Karagwe will be launched in five major phases, during the following estimated dates:

Development Expenses

Abaka estimates that the company will need $2,000 to $5,000 for incorporation and legal fees, which will be paid by Mr. Stiller during the first quarter of 2000.

Company Organization

Abaka's principal founders, Liam Stiller and Ghin Patel, will control the majority of the company's equity. Abaka will employ both Mr. Stiller and Mr. Patel on a full-time basis. A Board of Directors will be assembled if and when investors demand one. A Board of Advisers has been compiled in the meanwhile. This Board is composed of experts with extensive experience relevant to the area of international rural development. All of these advisers have agreed to lend their assistance free of charge. Please see the Appendix for a detailed description of Abaka's Board of Advisers, and Appendix F for the resume of one of Abaka's founders.

Liam Stiller, Executive Officer. Mr. Stiller is Abaka's primary visionary. He will earn his M.B.A. degree in entrepreneurship from the University of Oregon in May 2000. He has taken formal coursework in both PV and wind system design and installation at International Natural Energy (INE), arguably the most respected and well-known RE training facilities in the world. Mr. Stiller has many contacts in the industry, and knows key people at the Renewable Energy Sources Laboratory (RESL), the Public Service Company of Oregon, WorldSolar, Inc., Energy Choices Africa, and the Tanzania Investment Center. He has traveled extensively in East Africa, and conducted market research on solar financing in Karagwe while doing an internship for SSEW during the summer of 1999.

Ghin Patel, Africa Operations Officer. Mr. Patel, Abaka's principal co-founder, will serve as the company's Officer for Africa Operations. Mr. Patel is a native of Karagwe, Tanzania, and is a master electrician. In 1999, he founded the Seattle Solar Electronics Workshop (SSEW) with financial backing from Mr. Stiller. SSEW offers a wide range of electrical services in the Karagwe area and beyond. Mr. Patel has installed over 500 solar electric systems in his career, and he has taught the PV systems design and installation course at the Institute for Solar Training for six years. For the last three of those years, Mr. Patel has served as the school's resident chief of staff. The school itself is located in Karagwe, and is operated and funded by one of Tanzania's most important non-government organizations, the Karagwe Development Association (KARADEA), with which Mr. Patel has very close ties. In a period of only eight years, the Institute for Solar Training has arguably become the most respected solar energy technical school in the southern Hemisphere. Mr. Patel has earned the distinction "Fundi," which, in Kiswahili means "Master Technician." He is unquestionably Tanzania's premier installer of PV systems, and one of the most admired men in Karagwe.

Administrative Expenses

The following table shows Abaka's expected administrative expenses for 2001-2006.

Assumptions

The financial statements presented in the Appendix reflect only Abaka's forecasted sales of pre-financing contracts in Karagwe. Revenues generated from community center services are not included in these forecasts, nor are potential revenues generated from projects in locations other than Karagwe. In addition, the financial statements assume that Abaka makes no capital expenditures during the explicit period of 2001-2006. Due to the nature of the pre-financing plans, the bulk of customer payments will be collected before kit components will be ordered. This will have a positive effect on net income and cash flow. The following table presents Abaka's expected operational calendar and shows why reported net income and cash flow will be increased by the nature of the pre-financing plans.

Operational Calendar

Capital Requirements

Abaka requires $800,000 in start-up capital for the construction of the power station and community center. An additional infusion of $200,000 in cash at the end of 2000 will be needed to jump-start operations; this includes a significant safety cushion in case of financial emergency.

Ratio Analysis

The following table shows Abaka's comparative financial ratios for operational years 2001-2006. The increasing return on equity figures demonstrate that Abaka does not plan to seek further external capital to expand the operation in Karagwe. The return on assets figures do not increase as substantially, because this analysis assumes that Abaka does not expend any cash during the first six years of operation.

Ratio Comparisons. There are no comparable businesses that release their financial ratios to the public. Most of the activity in the rural development industry is driven and subsidized by industrialized governments and World Bank contracts. There are several private enterprises that have been largely successful in this realm, but their financial statements are not available for comparison.

Financial Risks

Currency Translation. All of Abaka's revenues will be collected in Tanzanian shillings, and almost every shilling collected will have to be converted into U.S. dollars in order to meet the company's major expense accounts. Although the Tanzanian shilling has deflated considerably against the dollar over the past eighteen months, this trend may not continue. As far as the founders know, there are no market-based instruments available for hedging this currency risk. As such, all financial forecasts assume that Abaka will lose 5 percent of its revenue to currency exchange fluctuations and expenses. In order to minimize exposure, almost all collected Tanzanian money will be immediately converted into U.S. dollars by establishing a corporate forex account at the Tanzania National Bank. This account will allow for currency exchange at a competitive market rate, and will also enable Abaka to automatically wire transfer all funds directly into a corporate account at either Citibank or the Chase Manhattan Bank in Eugene. This will be Abaka's short-term answer to contending with currency risk. For the long-term, Abaka will neutralize currency risk by diversifying its operations and holdings into other areas of the world.

Political and Economic Stability. The countries surrounding Tanzania's western border have experienced a great deal of strife over the past ten years, characterized by anarchy, exodus, bloody violence, and massive inflation. In Tanzania, these regional pressures have contributed to high unemployment and double-digit inflation. Nevertheless, Tanzania has demonstrated 38 years of political stability, during which time the government has transferred power peacefully on three different occasions, most recently in 1994. There is a substantial World Bank presence in Tanzania, as well as in Kenya and Uganda. The Tanzanian government has set up an Investment Center to aid foreigners in identifying lucrative opportunities in Tanzania. Consistent with this measure, the government has also adopted extremely liberal tax and import laws in an effort to attract foreign investment. Abaka is confident that the political and economic climate in Tanzania is becoming more and more favorable for business every day, and that real progress is being made to protect Tanzania's economy and infrastructure from the instability occurring in neighboring regions.

Coffee. Karagwe residents depend heavily on coffee for their revenue. Economically, coffee harvests can be affected by climate or market prices, and this cannot be ignored as a potential threat to Abaka's success in Karagwe. However, Abaka's presence in Karagwe will drastically improve the region's prosperity, and the community center will help to spark an entrepreneurial spirit by providing new opportunities for small businesses in Karagwe. In short, Abaka's commitment for a long-term, value-enhancing presence in Karagwe will itself significantly neutralize this risk by helping the community to diversify and expand its economy. Furthermore, Abaka will explore the possibility of accepting coffee as payment for solar kits, which might prove to be another effective strategy for neutralizing currency translation risk.

Cross-Cultural. There is an operational risk inherent whenever a company in one country attempts to do business in another. This "distance" risk will be mitigated in Karagwe through the partnership with SSEW, which will handle all day-to-day operations of the business. Additionally, Abaka will maintain a full-time Oregon-based staff, as well as an expanding travel budget, so that Karagwe, and future sites in other countries, will be visited on a regular basis.

Exit Strategy

This proposed project in Karagwe will require a long-term commitment. In Karagwe, Abaka will generate cash flows that will be used to finance project expansions into other areas of the world, such as West Africa, Asia, and Latin America. Once Abaka's concept has been proven, and the potential for further growth demonstrated, Abaka will most likely exit via a management buyout. Another real possibility will be to take the company public. Demonstration of substantial and sustainable growth, combined with the establishment of a global brand name recognition, should make this a viable exit option. In the past decade, several mutual funds have been established that explicitly invest with environmental companies, and this demonstrates that there is a public capital market willing to purchase equity in a company like Abaka. In any case, Abaka does not foresee an exit occurring until at least 2006.

For a comprehensive background on the challenges of conducting business in Tanzania, please see the author's paper entitled "Tanzania: Developing Strategies for Effective Business Practices," available in Adobe Acrobat format from the Abaka website, www.Abaka.com .

Investment Requirements

Mr. Stiller has already invested $8,000 in administrative, travel, and research expenses to write this business plan. In the near future, Abaka will require an additional $2,000 to $5,000 for incorporation and legal expenses, plus $1 million in seed venture financing to launch the project in Karagwe. The following table presents an itemized breakdown of the venture financing needed.

Itemization of Investment Needed

In addition, the company will seek assistance in further developing legal, distribution, marketing, and financial strategies for conducting business internationally. Therefore, Abaka will require significant strategic support, as well as capital, in launching this venture.

Project Valuation

The following table shows the valuation analysis for Abaka's project in Karagwe. This estimation is based on expected net income in 2006 multiplied by a factor of three. This multiple reflects Abaka's expectation that the services offered at the community center will be 75 percent of total net income. This valuation analysis unequivocally confirms Abaka's intention to provide a positive return to its investors. This is consistent with the company's mission statement, which mandates that Abaka will profitably empower underprivileged communities through the application of RE.

Abaka's required $1 million capital investment will be obtained through a venture round financing period conducted during the first half of 2000. Abaka will attempt to obtain the majority of this capital either from an environmental project investment agency or in the form of a partnership with a large, multinational corporation interested in penetrating emerging market. Ideally, this will be an electronics or telecommunications company that has substantial financial, marketing, and legal resources. Potential corporate partners include companies such as General Electric, Philips, Sharp, Magnavox, Toshiba, Thompson's of France, and a host of streamlined, globally-aggressive telecommunications companies. Abaka will also seek and accept financing from private, accredited investors, in accordance with all U.S. and Tanzanian securities laws.

Abaka will prefer to structure this investment agreement as an exchange of services partnership agreement, but, if necessary, equity can and will be granted in return for capital. Because the founders want to maintain cash flows for use in future project expansions, and not to buy back common stock, Abaka will attempt to retain 67 percent of its equity in the control of management throughout both rounds of financing. Additionally, the company will explore the possibility of leveraging a partnership or equity investment with a loan from a government or nonprofit relief agency such as USAID or the Africa Project Development Fund.

The markets in which Abaka will operate have a tremendous long-term potential for economicdevelopment. Abaka has the knowledge and the local contacts to bring electricity andprosperity to these regions. Eventually, these markets will develop a substantial demand forelectronics, telecommunication, and information technologies. Abaka's ideal investor and/orcorporate partner will have the vision and the desire to penetrate these markets early and aggressively. They will have the resources to provide significant financial, logistical, operational, marketing, and legal support. In exchange, a partner company will be granted exclusive supply and branding rights for all products and services that Abaka offers. In addition, Abaka will actively help a partner company to market its product(s) at the grassroots level by employing locals to build a loyal, long-term customer base within their communities. By providing underdeveloped communities with affordable and dependable electricity, Abaka will help pave the way for prosperity and economic development to permeate emerging markets all over the world.

Global Entrepreneurial RE Enterprises

During the Summer of 1999, Mr. Stiller conducted an informal survey of Karagwe citizens. As an American, it is very difficult to obtain reliable information from people there, because they will always try to make themselves sound poorer than they really are, in the hope of receiving a handout or "sponsorship." Therefore, questions concentrated on qualitative measures rather than quantitative. In other words, discussion of actual dollar figures was avoided. Nevertheless, a good measure of Karagwe's demand for solar electricity, and why it is not being met, was obtained from these conversations. In some cases, a translator was used. The following questions were posed, generally in this order:

• What other electrical appliances do you own?
• How do you feel about the currently available energy sources in Karagwe?
• What do you know about solar energy?
• Do you know Ghin Patel?
• Why is solar energy not used more readily in Karagwe?
• In which village do you live?
• How big is your house?
• How do you light your house and power your radios?
• What would you use solar energy for, if you could get it?

It is important to note that these questions were not posed in a formal interview environment, but during casual conversation with almost every local that Mr. Stiller met. Most of these conversations took place on the streets, in bars and restaurants, or on shuttle rides between villages. Overwhelmingly, the results of these conversations demonstrated that, in Karagwe, solar power is viewed as an expensive luxury item that only the richest families possess.

Furthermore, it was clear that almost every individual had a basic understanding of what solar energy is, and what it can do. The most important message of these conversations is that a tremendous latent demand for solar energy exists in Karagwe, and that the major obstacle impeding its widespread use is affordability.

Board of Advisors

Mary Flinger. Ms. Flinger has developed RE policy in Bangladesh, in Egypt, and in many parts of Latin America. She worked at RESL's International Programs Division for three years, and graduated from International Natural Energy's RE education program. Most significantly, Ms. Flinger was instrumental in aiding the Grameen Bank of Bangladesh to develop a working micro-finance plan for solar electric systems. The Grameen model is now regarded to be the most successful solar leasing program in the history of the industry, and the bank has become one of the most fortuitous lending institutions in the world with a 95 percent pay-back rate. Ms. Flinger is currently earning her M.B.A. degree at New York University in New York. Her experience developing a successful business plan to bring affordable solar energy systems to families in Bangladesh will be extremely valuable to this project.

Jane Winger. Ms. Winger has over six years of experience in the energy industry, as well as several years' experience in the global development field. Currently, she is employed by Energy Resources International (ERI), where she develops training curriculum for electric utility managers in developing countries. This curriculum, which has been implemented in Ghana, Brazil, and Mexico, teaches utility managers strategies for maximizing energy efficiency. Ms. Winger is currently earning her M.B.A. degree in entrepreneurship and marketing from the University of Oregon. She played an instrumental roe in the preparation of this business plan, and, as one of Abaka's most accessible advisers, will maintain close involvement with Abaka in years to come. At some point in the future, Ms. Winger may join the company's full-time staff.

Rudolph Heisemann. Mr. Bartholf is a director at Energy Resourcs International (ERI), and has over twenty years of experience in the RE industry. During his impressive career, Mr. Bartholf has provided strategic planning, project development, and technical assistance as a consultant to numerous organizations all over the world. Prior to joining ERI, Mr. Bartholf served as a Senior Program Officer at Prouffer International, a nonprofit development assistance organization. While at Prouffer, Mr. Bartholf spearheaded the development of RE projects in several Asian countries. His advice on technical and economic matters, as well as his contacts within the industry, will prove highly valuable to Abaka.

Miller Fried. Mr. Byrne is a British ex-patriot who has been installing solar electric systems off and on in eastern and southern Africa for twelve years. Currently, he is working with the Maasai people in Arusha, Tanzania, on a large-scale solar project to electrify several remote community centers and schools on tribal lands. Mr. Byrne is literally in the trenches, both as a system installer and integrator, and as a fundraiser. He has important contacts with nongovernment organizations throughout Europe and Africa, and knows key RE producers and distributors. His assistance with the Tanzanian government, with suppliers and distributors, and with private fundraisers, will prove vital to Abaka's success in Karagwe. He will also serve as an ideal sounding board for idea testing.

Justin Sangria, Ph.D. Dr. Sangria is a Professor of Finance at the University of Oregon. He specializes in the area of risk management, particularly as it relates to international finance and currency exchange. A native of Peru, Professor Sangria has consulted for numerous banks in Latin America on currency hedging, and has developed financial strategies to help these banks effectively conduct business across international borders. Professor Sangria's expertise in this realm will help Abaka to manage the serious financial risks associated with doing business in Tanzania.

Felicia Strong, M.B.A. Ms. Strong has worked in the U.S. RE industry for over seven years in both the public and private sectors. Most recently, she worked for Kyocera Solar International, one of the world's largest producers of PV technology, as well as for the U.S. Export Council for RE. She is now working for Prouffer International. Ms. Strong has lived and worked in Brazil, and knows the global RE industry as well as anybody. She will aid in developing strategies for executing this business plan, and in locating potential investors.

Joseph Rosenthal, Ph.D. Dr. Rosenthal is a Senior Economist at the National Energy Sources Laboratory (NESL) in Eugene, Oregon. He has been the Senior Analyst of NESL's International and Village Power Program for nine years, and has worked in the RE field since 1978. He specializes in conducting feasibility and optimization analyses for RE projects in developing nations. Dr. Rosenthal will continue to assist Abaka by reviewing and editing the business plan, by providing fresh ideas and approaches, and by connecting Abaka's management team with other key people in the industry.

Samuel Obago. Mr. Obago is a native of Kenya, and is the Chief Operations Officer at Energy Choices Africa (ECA), probably Kenya's pre-eminent large-scale RE consulting firm. He has seven years of hands-on experience installing solar electric systems. For ECA, Mr. Obago evaluates project financing and feasibility, and negotiates contracts with the World Bank and other international lenders. He is fluent in Kiswahili, and knows key people in East African government, financial, and nonprofit organizations.

Jake Rossimond, owner of Rossimond Power and Light, has been designing, installing, repairing, and building wind generators for twenty years. He is perhaps the nation's best-known specialist in the commercial wind energy industry, and has worked on RE development projects in 23 foreign countries. He has consulted for NESL, as well as numerous other energy organizations all over the world, and has taught the wind energy class at INE for the past six years. In addition to serving as a consultant for the business plan, he has agreed to oversee the design and construction of Abaka's power station and community center in Karagwe.

Mitchell Bumholtz. Mr. Bumholtz served two years in Paraguay with the Peace Corps, and has since graduated from INE's RE education program. He has consulted for the World Conservation Project, and for the past two years has been instrumental in the establishment of a large-scale commercial wind power project in New England. Mr. Bumholtz has been a dedicated proponent of this project since its inception, and may join the Abaka management team as a full-time employee within a year.

Jimmy Wise. Mr. Wise has been an Executive Director of International Natural Energy (INE), arguably the world's most respected RE training center, since 1991. He has been training people in RE installation since 1981, and has nearly thirty years of experience as a licensed general contractor in solar home building and design. During his career, Mr. Wise has taught solar installation in developing countries all over the world. He has agreed to assist with the on-site design and construction of Abaka's power station and community center.

Jacob Black, Ph.D. Dr. Black is a Senior Analyst at NESL's International Programs Division. He has over twenty years of experience advising and consulting on RE projects in sub-Saharan Africa, and has traveled extensively in the region. As one of Abaka's most accessible and supporting advisers, Dr. Black will continue to provide constructive criticism, new ideas, and liaison with potential consultants and investors.

Resume of Liam Stiller

OBJECTIVE: To build Abaka Energy Solutions into a global provider of renewable energy products and services

EDUCATION & EXPERIENCE

University of oregon.

Master's Degree in Business Administration

Expected Graduation, May 2000

• Major in Entrepreneurship; 3.7 cumulative GPA
• Awarded $3,500 in merit-based fellowships for study in Entrepreneurship
• Helped WorldSolar, Inc. of Eugene, OR develop a marketing strategy for introducing their solar module into East Africa as an independent project for M.B.A. credit
• Teaching Assistant, M.B.A. Business Statistics course

Seattle Solar Electronics Workshop, Karagwe, Kagera, Tanzania

Summer Internship, June-August 1999

• Conducted the feasibility analysis for the Abaka business concept
• Forged a business partnership with Ghin Patel, Tanzania's leading installer of solar electric systems
• Made contacts with key industry people including Samuel Obago and Miller Fried, as well as officials at the Karagwe Development Association (KARADEA), the Tanzania Foreign Investment Center, the Tanzania Revenue Authority, the Tanzania Electric Supply Company, and the Africa Projects Development Fund

International Natural Energy, Eugene, OR

Renewable Energy Education Program, June-August 1998

• Completed coursework in PV system design and installation
• Helped to install a 1.5 kW grid-tied PV system on a home in Edwards, CO
• Completed coursework in the fundamentals of wind generator operation and installation
• Helped to install a 1.5 kW wind generator on a remote home near Fairplay, CO

Amgen, Inc., Portland OR

Department of Inflammation November 1993-May 1998

Research Associate in Cell Biology & Immunology

• Worked on over 20 project teams to develop novel therapeutics for treating inflammatory diseases
• Responsible for researching the effects of drugs on cells and organ systems, reporting data at team meetings, contributing to strategies for drug development, and coordinating cell biology research efforts with those of other departments
• Supervised 3 student interns to help with research and project implementation
• Wrote 2 and co-authored 7 scientific papers
• Promoted twice for ability to work in teams, handle multiple responsibilities, conduct sound science, function without supervision, and take primary initiative
• Presented data in front of 200 cell biologists at the international Keystone Symposium

University of Chicago, Chicago, IL

Bachelor's Degree in History & Immunology, Graduated June 1993

• Chairman of fraternity committee; led the most successful recruitment program on campus
• Chairman of Philanthropy committee; led an effort which raised $79,000 for cancer research, and honored by the Saturn Corporation for dedication to community service

ADDITIONAL INFORMATION

• Skilled in Microsoft Office, including Access databases, as well as using Excel spreadsheets for financial analyses and optimization modeling (maximizing profits or minimizing costs using the Solver function)
• Written and conversational literacy in Spanish
• Able to travel extensively, and to remote locations (have been to 17 countries on 4 continents); self-sufficient and culturally adaptive

FINANCIAL STATEMENTS

Pricing strategy and sales & revenue forecasts.

Pro-Forma Cost of Kits Sold and Inventory Holding Schedule

Consolidated Pro-Forma Financial Statements, 2001-2006

This page left intentionally blank to accommodate tabular matter following.

Consolidated Monthly Pro-Forma Financial Statements, Year 2001

Consolidated Monthly Pro-Forma Financial Statements, Year 2002

User Contributions:

Comment about this article, ask questions, or add new information about this topic:.

Renewable Energy – Business Plan

Renewable energy. Preparing a Business Plan and a complete Project Proposal for your business idea is the most important step in starting your business. Our expert team of engineers and economists with their knowledge and experience will fully respond to your requests and ideas, in accordance with all the rules of project documentation, writing a business plan, macro and micro economic situation at the time of writing the project. This guarantees the ultimate outcome of your project application and business plan. We make all kinds of projects, business plans based on renewable energy sources (solar systems, wind generators, heat pumps, etc.) for the purpose of obtaining loans, subsidies and other investments. We optimize energy systems in accordance with your requirements, we make a “payback” (payback analysis) period for the designed system. We do SWOT and market analysis of your idea, product and system. We improve processes, increase energy efficiency in existing systems and production processes. We perform this according to the most famous models of excellence TQL, TQM, Kaizen, Sixsigma and their tools (SiPoc, Ishikawa, etc.).

Figure 2. Project proposal and Business Plan for all types of energy systems

The advantages of our business plans are in a modern, effective and chronological content, which consists of:

SUMMARY OF BUSINESS PLAN

• Business idea
• The potential of a business idea
• The key to success
• Necessary financial resources MISSION AND GOALS PRODUCTS AND SERVICES MARKET STRATEGY
• Market analysis
• Competition
• Market performance
• Marketing and sales OPERATION PLAN
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• Legal aspects
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• Organization FINANCE
• Financial indicators

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In addition to business plans and projects, we also offer wind generators – turbines, solar panels that can be ordered from us with all the accompanying electrical and mechanical equipment such as: inverter – domestic and EU production, supporting and prefabricated structures, complete design documentation, installation of support systems construction, electrical installation and connection to the electricity grid.

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How to start a solar business — the basics

Note: This blog was originally published in February 2021. It was updated October 25, 2023 to reflect recent information. If you have any questions, please contact us .

The solar industry is growing, and its sun is still just starting to rise. Solar power continues to lead the way when it comes to renewable energy — and arguably energy in general. According to SEIA data, in the first half of 2023, 45% of all new electric capacity added to the US grid was from solar. 

Likewise, solar installation professionals is among the fastest growing professions in the United States. The trade is projected to enjoy a 22 percent growth rate between 2022-2032, and the 2022 median income was $45,230 per year. 

This data represents a promising prospect for contractors looking to cut their teeth in this exciting business. If you’re wondering what it takes to start your own solar business, this post is for you.

How to start a solar business — beginnings

Of course, there’s much more to solar installation than slapping up panels: there’s general contracting, roofing, metal fabrication, sales, repair and maintenance, consultation, landscape design, and so much more.

The best place to start a new solar business is between the cracks of large, over-saturated markets. Find out what solar professionals are doing in your area by checking in with local SEIA chapters and chambers of commerce, and conducting internet searches. It’s highly likely that even if your market is saturated with traditional solar businesses, you can find a niche that only you can fill.

Solar incentives

Becoming an expert means more than knowing your product. It requires having your finger on the pulse of the various rebates and incentives available, an important differentiator for companies looking to get ahead of the pack. Businesses that do the research to save their customers time and money have a leg up when it comes to getting the contracts.

Solar sales

Starting a solar business doesn’t necessarily mean you’ll need a crew up on roofs installing panels. If sales is your thing, there are many businesses that focus on just that. 

These companies do all the work of selling solar systems : getting leads, qualifying them, doing in-home or virtual consultations, and getting the customer to sign. Once a customer has signed on, these organizations then work with a contractor that takes care of the rest of the installation process.

With the recent improvements in solar sales software, it’s easier than ever to stand out from the crowd. Click through this Tourial to see how Aurora’s reimagined Sales Mode can help you sell with confidence and close more sales.

Solar installers

Solar installers are usually the most saturated business in the market. If you’re wondering how to start a solar installation business , you might want to start at the basics: Roofing. If you’re a roofer, solar installation could be a great option to add to your business. The solar and roofing industries are starting to converge, and for good reason. Solar panels and roofs have about the same lifespan (approximately 25 years), and savvy roofers are realizing the one-two punch of installing a new roof and solar system simultaneously. Whether you’re a roofing contractor or solar installer, there’s a lot of overlap between the two, and plenty of untapped market opportunities for incorporating roofing and solar into your business plan.

What is a PV system?

Before we move on, let’s take a quick look at how a PV system works to get a better idea of how you can make money building one.

How does a solar photovoltaic system work?

Solar panels convert the energy of the sun into electricity through a process called the photovoltaic effect. When a photon hits a photovoltaic (PV) device, its energy knocks electrons in the material. These electrons begin to flow, producing an electric current.

At a high level, the process of how solar panels works involves three primary steps:

• Solar cells within solar panels absorb light from the sun, which causes electric current to begin flowing.
• An inverter converts DC electricity to AC electricity .
• This electricity is used to supply current energy demands in the customer’s building and excess electricity beyond what the customer can use is exported to the grid (or used to charge a battery).

The photovoltaic process occurs at the solar cell level. Solar panels are composed of multiple cells, and PV systems are a series of solar panels wired together (called “ stringing ”) to provide appropriate voltage to the system’s inverter.

After a PV system is installed , there’s nothing standing between a customer and cheap, green energy.

Solar company licensing & certifications

Solar licensing.

Not every state requires solar licensing, but some do. Keep in mind that if you’re planning on working outside of your home state, you’ll need licenses for any state you want to work in. For states requiring licenses, you’ll often need a plumbing or electrician license, or both. Some states require a specialized solar contractor license.

Check here to check on what type of licensing you may need in your state, region, or municipality.

Solar certifications

Even if you don’t need a license to operate in your area, earning a solar certification is a great idea. Solar certifications are an important way to promote customer confidence, putting you ahead of the average uncertified business. 

Certification can also lead to more income, with certified solar professionals earning an average of $11,000 more annually. Getting certified may also allow you to operate in more than one municipality or state, increasing your competitiveness.

The North American Board of Certified Energy Practitioners (NABCEP) voluntary certifications provide national standards for PV professionals, certifying they have the skills, experience, and competency to set themselves apart. NABCEP’s certifications include :

• PV Installation Professional (PVIP)
• PV Design Specialist (PVDS)
• PV Technical Sales Professional (PVTS)
• PV Installer Specialist (PVIS)
• PV Commissioning & Maintenance Specialist (PVCMS)
• PV System Inspector (PVSI)

Set up your solar business

You’ve nailed down your niche, identified solar certifications and licenses, and are ready to make the jump. Let’s take a dive into how to start a solar business from the ground up, starting with the legal stuff first.

Establish an LLC

An LLC, or limited liability company, is a business structure set up by state statute. LLCs provide several benefits, including liability protection, flexible structure, and tax advantages. They provide the same limited liability as a corporation but are much cheaper and easier to form and operate.

In most states, getting an LLC entails choosing a name, selecting members (which can include just you), creating articles of organization and operating agreements, and getting an EIN (employer identification number). You’ll then need to obtain any seller’s permits and licensing required by your state. Check your state’s LLC requirements for more information.

Business insurance

The right insurance coverage is essential to mitigate potential risks and liabilities. Every contracting business must meet general insurance requirements, but there are a few considerations specific to the solar industry. Here’s your solar business insurance checklist:

• General liability insurance
• Workers’ compensation
• Automobile liability insurance
• Excess/umbrella liability insurance

Most contractor general liability insurances provide a minimum of $500,000 coverage. Keep track of your inventory, equipment, and properties, and get the right insurance that would cover the worst-case scenario. Do yourself a favor and get the right insurance before you even land your first contract. Click here for an in-depth look into the right solar business insurance .

Establishing a solar team

1. how to find salespeople.

Salespeople are the backbone of most solar businesses. Regardless of your niche, chances are that someone on your team is making at least part of their paycheck knocking on doors and making phone calls.

When seeking out a salesperson, here are three elements to consider when vetting your candidate pool:

• Knowledge about your niche
• Passion and persistence
• Familiarity with questions and concerns that customers have about solar

It’s crucial that you foster a culture of customer satisfaction in all of your employees, but salespeople in particular. They are usually the folks leading your conversion process and are often the face of your business.

If an in-house sales team isn’t feasible, there are several options available for sales outsourcing. Many businesses exist that specialize in outsourcing solar sales for installers, consultants, and retailers.

2. Ramping up a team

Start out with nothing but the best right from the gate. Find team members that are NABCEP certified (see above). If your team isn’t certified, give them the time and resources to do so.

Make sure your salespeople, installers, marketing team, and others know the ins and outs of your product. Give everybody on your team the time and resources to learn about your product and services.

Your dream team doesn’t have to be all employees. Network with other solar experts outside of your niche. They will become invaluable sources of help and referrals if you keep at it.

3. Setting up compensation structures

Solar salespeople are usually paid by commission. Commission payouts are usually paid as a percentage of the total contract price or as a cut of the base contract price. 

Commissions have various pros and cons. On one hand, they can motivate your teams to work hard. On the other hand, commissions may encourage your salespeople to sell more than a customer needs, take on cost-prohibitive projects, and inflate project costs above market rates.

Read more on common commission structures in the solar sales industry today.

Pro tips: Avoid these solar sales barriers

There are many barriers when it comes to getting a solar business off the ground. Here are three common ones that can be easily solved with the right solar software.

Incorrect or inefficient designs

It’s all too easy to under- or over-engineer a solar system. Incorrect or inefficient designs are a surefire way to sink your business. Aurora Solar’s sophisticated solar design software uses technology like LIDAR-based shade analysis and AI-assisted 3D modeling to give you a pixel perfect design almost instantly — without a truck roll.

Electric quotes from customers

Customers are often wary of providing their electricity bills. Just a few days can mean the difference between landing a new customer and losing them, so make this process as seamless as possible for your customers.

Most electric customers receive a bill in the mail every month. If they don’t, they can likely access it online from their utility. Either way, Aurora can provide a forecast of year-round energy usage from just one month’s bill — taking into account factors like weather, HVAC, and more.

Take this opportunity to remind your customer that making efficiency upgrades in the home could drastically improve energy efficiency. 

And don’t forget to study up on the net metering rules for your state. Being able to sell excess power back to the grid can be a huge selling point for solar installations.

Permitting problems

Flawed designs can lead you straight back to the drawing board. If a solar design isn’t compliant with state or local regulations, your plans will be rejected. Collecting and reporting permit-related project data constitutes up to 8% of soft costs associated with solar, owed largely to mistakes and regulatory bottlenecks. 

Aurora’s Plan Sets Service expedites your post-sales permitting process. It’s also a great tool for new businesses looking to scale without the growing pains and backlogs of permitting — Aurora can handle any growing volume of plan sets you need.

See how it works in the Tourial below.

Starting a solar business takes research, investment, time, and leadership. But, it can be worth the effort, providing a great career in a growing and fulfilling industry. 

When you do start your business, make sure you have a software solution that sets you up for success. Schedule a free demo today to see how Aurora can help you get started in the solar industry.

Ready to learn more?

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Solar Panel Manufacturing Plant Business Plan

Published May.05, 2015

Updated Apr.24, 2024

By: Noor Muhammad

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Table of Content

How to Write a Solar Panel Manufacturing Business Plan?

With increased awareness of the damaging impacts of fossil fuels on nature, the world is beginning to use renewable energy sources to power itself. If you are a business opportune, the changing trends must give you a hint to launch solar cell manufacturing plant.

I am a business management consultant at OGScapital and in this blog, I will guide you through the ways by which you could start and manage a solar cell factory successfully.

To step into the business, you have to first do exhaustive research on how to start a solar panel manufacturing business. Following that, you will need to take down your thoughts and draft them in a solar business proposal.

To write an effective business plan, here are the steps you need to take.

1. Outline a Clear Executive Summary

The executive summary should explain what your startup looks like, how you plan to manage it, who will be your buyers, and what are the targets you aim to achieve through your business.

2. Write the Company Summary

The company summary should throw light on the qualification and experience of the company owner and the motive behind starting the  solar panel production plant.

3. Pen Down Your Products and Services

This section should specify the products you will be selling and the services you will be offering by launching a  solar panel production plant.

4. Carry out a Market Analysis

Competitors are for both – to learn from and to compete with. Therefore, in this section of your solar panel manufacturing plant business plan you should explore your target market as well as your competitors.

5. Perform Customer Segmentation

In this part, you will have to identify the distinct groups of your target customers.

6. Set the Prices

Your business plan should contain your pricing strategy for at least three years.

7. Create the Personnel Plan

Your business plan should explain how many people with what qualifications will you be hiring. Taking down their expected salaries for at least three years is yet another detail you shouldn’t miss while writing the business plan.

8. Develop a Sales Strategy to Brand Your Startup

Know how you are different from others in the business world and figure out ways to brand your image.

9. Make a Financial and Operational Plan

This section of your business plan should describe solar panel manufacturing plant cost and other fiscal details.

Operational and Strategic Planning

How do i start up a solar cell manufacturing industry.

To start a solar cell manufacturing industry, you just need to follow a few steps:

Make Your Business Plan

To start with, you must get a detailed and accurate business plan that takes into account your spending, investment, expenditure, staff, customer groups, and every relevant detail.

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Execute the Business Plan

Next, you just have to follow your business plan in letter and spirit. You have to make sure you do not deviate from the criteria you had set in your business plan. For instance, how you will market your venture, how much salaries would you pay, all such details should be pre-decided.

Manage & Operate

Establishing and growing a business is more difficult than the launch. For that, you will have to ensure a strong hierarchical management structure and a clear chain of commands for smooth operations.

What are some basic details about the manufacturing process, investment, machinery, and human resource?

3.1 how are the solar panels manufactured.

The working principle behind the manufacturing of solar panels is the chemical and photoelectric electricity generation phenomenon.

Silicon is used to manufacture thin wafer-like slices in rectangular or square shapes. The metal block is then painted and polished. To enable the conduction the semi-conductor is converted to either N-type or P-type silicon. The silicons are soldered together in a grid-like structure. Afterward, a glass coating is laid so that light from the sun reaches the silicon matrix and generates electricity through the photoelectric effect.

3.2 The Pre-Requisites to Open Solar Panel Manufacturing Plant

As you can see, manufacturing solar panels is not a simple or single-process task. To manufacture it, you require sophisticated technology, tools, as well as electrical engineers. The human and other resources you need to have to manufacture solar panels are given below.

3.2.1 Investment & Monetary Resources

The investment in manufacturing solar panels would vary based on the technology you are using. For a rough estimate, a 20-Watt Solar Panel can cost about $90 – $120 in manufacturing. Therefore, it is obvious that you need a hefty amount in your account to step into this business.

3.2.2 Required Tools, Space & Machinery

To establish solar panel manufacturing plants you need to procure a large space that is free from the issues that can mess up with the manufacturing process. They include electric tripping, water leakage, and open areas exposing the panels to thunder before they are finished.

The machinery and required tools are:

• Stringer machine
• Automatic framing machine
• Layup station
• Automatic station with conveyor belts
• Backsheet cutting machine
• Solar simulator
• Ribbon bending and joining tools
• Electroluminescence Testing Equipment
• Support and transport tables
• Laboratory accessories for quality control

3.2.3 Human Resources

To enable the manufacturing, you will need to hire:

• Operation Manager
• Electrical Engineers
• Energy System Engineer
• Facility Managers
• Technicians (Mechanics/ Electricians)
• Sales Managers
• Web Developers & Social Media Managers
• Other General Staff

What’s the total investment of start solar panel manufacturing plant?

As mentioned earlier, manufacturing a 20-Watt Solar Panel can take from $90 – $120 depending on the technology you are using. The cost of the machinery required is also high as well as the cost of hiring and maintaining a specialized workforce.

Therefore, if you are looking for how to manufacture solar panels in the United States, you must keep in mind that it is going to take a lot of your funds.

To give you a complete idea about solar cell manufacturing plant cost, we are providing the estimated startup costs of a solar panel manufacturing startup based in Boston. This solar cell manufacturing equipment cost pro forma was devised for a startup that used the latest German technology to manufacture solar panels.

How much will it cost to set up a solar panel manufacturing unit?

In addition to the startup costs that were given in the previous section, the cost of maintaining the facility is also worth considering. 

Setting up a solar panel manufacturing plant includes daily maintenance and quality check of the machines and tools. To assess how much all of it will cost you and how much profit you would be able to generate you need to make a thorough financial plan. That plan should comprise a minimum 3-year analysis of the following:

• Important Assumptions
• Break-even Analysis
• Projected Profit and Loss 
• Profit Monthly
• Profit Yearly
• Gross Margin Monthly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

What are the factors worth considering?

6.1 licensing & registration requirements.

The first thing to pay heed to is the licensing and other requirements that are prevailing in your city for starting a solar panel manufacturing business.

6.2 Cost of Solar Panel Manufacturing Plant

Second, you should estimate the amount you can invest, your monetary goals, and the purchasing power of your clients to understand whether or not starting this business would be feasible in a specified location.

6.3 Sales Strategy of Competitors

To get ahead of your competitors, you have to first study them. Their sales strategy, price setting, discounts, and packages will help you understand how much money to spare to reach out to more customers.

6.4 Quality Standards & Expectations of People

While looking for how to setup a solar panel manufacturing plant you should also consider the quality standards of solar panels that people would expect from you. Normally you have to meet the following criteria:

• Resilience to Harsh Environments
• Long Cables for Easy Connection
• Multiple Mounting Possibilities
• Factory Certifications

Get Customized Business Plan Made by OGSCapital Experts

By now, you must have understood how you can capitalize on the solar panel manufacturing opportunities. You must also have realized that such an extensive business cannot be launched without an accurate business plan.

Reading solar panel installation company business plans available on the web and trying to draft your business plan might land you into trouble and your hard-earned money at risk. Therefore, it is important to hire professional services to get a business plan or a project report on solar panel manufacturing.

Among all the professional business plan writers, we would encourage you to explore a bit and know why you should hire OGSCapital for the task!

15+ Years of Industry Experience

We have the privilege of having written business plans for small and large enterprises. Our most successful business customers include Velapp, Global Impact, Confurmo, KFC, Subway, PolyClean, and a thousand more!

Highly Specialized Team

Our founders as well as the employed business consultants are highly specialized in their fields. At us, you will interact with business experts with great interpersonal skills and a spirit of cooperation.

Happy Customers in More Than 30 Countries

Since 2006, OGSCapital has been serving thousands of customers in more than 30 countries. 

Rated the TOP4 Small Business Consulting Firm

In 2020, OGSCapital was rated the Top4 Small Business Consulting Firm by the Clutch.

If you want to gauge our experience and expertise in the field before hiring us, you can request a sample business plan for a solar energy company.  

• How do I set up a solar panel manufacturing company?

As you can study from this solar panel manufacturing plant business plan pdf, you can set up a solar panel manufacturing company by procuring silicon metal, machinery, and tools to enable the photoelectric phenomenon. The rest of the steps are given in detail in this blog.

• How much profit can you make with solar panels?

Depending on the technology you use and your customer base, you can make $30 to $50 in profit per month with solar panels.

• How to start a solar panel manufacturing company in the USA?

You just need to acquire the licenses, get registration and follow the steps that are mentioned in this solar panel manufacturing project report pdf.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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If your business spends more than $5,000 per month on energy, call the number on your screen for a free quote. If your business spends less than $5,000 , you can call our team or submit your info online.

• Gather resources. Have your utility bill, employee identification number, business address, and renewal rate available to answer questions.
• Call us or submit a request. Fill out your contact information in the form on this page or call our business energy experts. 
• Get customized plans. Our team will provide customized energy plans from the best providers at no cost or obligation to you.

We provide a variety of pricing options for electric, natural gas, and renewable energy products tailored to your business needs. Use our energy buying guide to learn more about plan types and how to reduce your electricity bill . To get started, submit the following form or call the number on your screen.

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Business energy rates are much lower than residential because businesses typically consume a significantly higher amount of electricity than residential households due to their larger size, extended operating hours, and equipment usage. Some businesses consume significant amounts of power 24 hours a day, while homes may have variable hours of usage. The higher usage allows businesses to buy energy in bulk compared to the average household. For example, a manufacturing facility may operate non-stop to meet production demands, while most households lower electricity usage during overnight hours.

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Starting Solar Installation Business Plan (PDF)

Solar energy has become a buzzword in the energy industry as more people become environmentally conscious and look for alternative energy sources. Solar energy is a popular choice among individuals and businesses as it is clean, renewable and easily accessible. The demand for solar energy has been increasing and shows no signs of slowing down. This has created a lucrative opportunity for entrepreneurs to start solar installation businesses. The International Energy Agency has predicted that by 2050, solar energy will be the largest source of electricity globally. Many governments provide financial incentives that encourage individuals and companies to install solar systems, further pushing up the demand of solar. The cost of solar panels has been declining over the years, thus many households and companies are opting for solar as it is becoming more affordable. As more businesses and homeowners become aware of the benefits of solar energy, the demand for solar installations will continue to increase, creating a growing market for solar installation businesses.  This article will outline how to start a solar company business, and the solar installation business plan (PDF, Word & Excel).

Market Research

The solar industry is not the same in every place you go to. The dynamics vary greatly so you must research about the solar industry for your context. You must find out the general trajectory of the solar industry. As in, what are the demand areas? Which solar-related areas is your respective government taking keen interest in? Which solar products and services are people developing a rising interest in? What are the solar industry trends, forecasts, and projections? Find out about the applicable laws and regulations governing the solar space. Then find out who the key players in the solar installation space are.

Dig into the types of services and possibly products they offer. Find out the types of customers they serve and how big their customer pools are. Research on where they source their solar supplies from. What are their business and pricing models? The insights you draw from all these aspects will help you build a successful solar installation business. You will be better positioned to come up with a superior and unique value proposition. This is important because the solar industry is becoming more competitive as more players enter the space.

Location And Premises

The solar panels installation business involves lots of movement to and fro clients. Choice of location depends on the type of clients you will be serving. It could be residential, commercial, or industrial clients. When choosing a location for your solar installation you need to consider proximity to clients. It is ideal to be close to your prospects. That way you can deliver your services faster. Plus it will reduce transportation costs. You also have to consider proximity to your supplies or suppliers.This is also to avoid delays and to minimize operating costs. Your business premises should be spacious considering the nature of the solar installation business. You will need storage space, parking space, waiting area, working area, and the like. Your business premises should be easy to access and secure. It is also strategic to make your premises alluring so as to lure prospects. Work with designers to make your outlet(s) unique and attractive. The cost of purchasing or leasing the premises should be included in your solar installation business plan.

The bulk of your capital goes to sourcing the equipment you need for doing solar installations. That will largely depend on the types of solar systems you will be specializing in. Some of the examples of equipment needed are solar panels, hybrid inverters, solar charge control units, batteries, ladders, solar cables, drills, solar switches, wire strippers,  solar breakers, racking systems, screwdrivers, accumulators, and lights, amongst others. You will also need personal protective clothing and applicable hand and power tools. Storage equipment will be necessary. Office equipment will be needed for your base of operations. Having a vehicle for your solar panels installation company is crucial. This business involves a lot of travelling; from your offices to clients places for things such as site assessments, installations, and maintenance, thus having a vehicle is a must. The vehicle should be suitable for transporting staff, tools as well as the solar products. You can purchase a van or a truck for your solar installation business. The solar panel installation business plan should cater for the costs of purchasing the vehicle and equipment.

Products And Services

Most solar installation companies do both solar sales and installations. Solar panels are the main product sold by solar installations companies, and they come in various sizes and types to fit different applications. The products that you can sell include solar panels, invertors, batteries, charge controllers, solar geysers, solar lights and other components necessary for the installation and maintenance of a solar system. The services offered by solar panel installation companies include site assessments, design of solar systems, installation of solar systems, solar maintenance and repairs, consultancy and r etrofitting services . Furthermore, some solar installation companies offer education and training services to help customers understand how to choose and use their solar systems effectively and efficiently. Your solar company business plan should clearly outline the products and services offered by your business.

Management And Staff

For a solar company to run efficiently, it requires a team of skilled employees with diverse expertise. The number of employees will depend on the scale of your operations. The solar installers are responsible for conducting site assessments and installing the solar systems. A manager is required to oversee project and staff management, as well as the day-to-day operations of the solar business. Sales and marketing staff are necessary for promoting the business and selling its products and services to customers. Additionally, accounting and finance staff are essential for managing the finances of the solar installation business.  The salaries of all your staff should be included in your solar panels installation business plan.

Your market research will guide you on which customer pools you should target. The truth is that the demand for solar products and services is bound to increase. Any household, commercial property or industrial property is a candidate for solar installation (and more). You just have to empirically target the right prospects. The market is broad because it spans from recently constructed properties to ones that have existed for years.

In the solar installation business you need to employ modern marketing techniques. Some of those marketing techniques include digital marketing, influencer marketing, brand ambassadorships, and the use of foot agents. Have alluring, active, and up to date social media accounts and a website. Use every solar installation gig as a basis for social proofs that you will use to lure more customers. Take high definition visuals such as photos and videos of your work. A proper marketing strategy should be included in your solar company business plan.

Pre-Written Solar Installation Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements

For an in-depth analysis of the solar installation business, we encourage you to purchase our well-researched and comprehensive solar installation business plan. We introduced the business plans after discovering that many were venturing into the solar shop business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.

The StartupBiz Global solar panel installation business plan will make it easier for you to launch and run your solar company business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. This is a complete business plan for a solar installation business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the solar panels installation business.

Uses of the Solar Company Business Plan (PDF, Word And Excel)

The solar company business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your solar installation business
• As a solar panels installation business proposal
• Assessing profitability of the solar installation business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the Solar Panels Installation Business Plan (PDF, Word And Excel)

The business plan for a solar installation includes, but not limited to:

• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in the solar installation business fail, so that you can avoid their mistakes
• Ways to raise capital to start your solar shop business

The solar company business plan package consists of 4 files

• Solar Installation Business Plan – PDF file (Comprehensive Version – 83 Pages)
• Solar Installation Business Plan – Editable Word File (Comprehensive Version – 83 Pages)
• Solar Installation Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 46 pages)
• Solar Installation Business Plan Automated Financial Statements – (Editable Excel File)

The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the costs, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

Click below to download the Contents Page of the Solar Installation Business Plan (PDF)

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The business plan which I purchased from your website saved me TIME and MONEY! The layout of the business plan was excellent. The financial statements were detailed and easy for me to edit. I will come back to purchase another business plan soon.

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I was extremely lucky to come across StartupBiz Global. Their business plan exceeded my expectations, and most importantly I was able to secure a loan from my bank. Thank you guys, now my dreams are coming true!

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Many thanks for your incredibly efficient service and thorough business plan. I am very impressed with the business plan. Before I bought the business plan, I tried to do my own business plan – it was such a nightmare and it turned out badly, also not to mention the stress it caused me. I wish I knew about your website earlier!

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StartupBiz Global provided a very professional and comprehensive business plan which I used for my business. The business plan was easy to edit, and I was able to get the funding which I wanted. I highly recommend their business plans.

Get the Solar Installation Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your solar installation business! Check out our collection of business plans  , and more business ideas .

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Shell Investors Nix Bid for Pollution-Reduction Plan Details (1)

By David Hood

Investors of oil and gas giant Shell voted Tuesday against a shareholder proposal wanting the company to disclose its plan to reduce its greenhouse gas emissions to meet the 2015 Paris Agreement’s goals.

The proposal, introduced by Amsterdam-based shareholder activist group Follow This on behalf of 27 investors, said Shell has not demonstrated how it will reach targets set by the agreement to lower emissions globally to slow the rate of global warming to 1.5 degrees Celsius above pre-industrial temperatures.

“Since the energy sector accounts for the vast majority of global emissions, it must achieve large-scale emissions reductions this decade ...

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FACT SHEET: President   Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade   Practices

President Biden’s economic plan is supporting investments and creating good jobs in key sectors that are vital for America’s economic future and national security. China’s unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers. China is also flooding global markets with artificially low-priced exports. In response to China’s unfair trade practices and to counteract the resulting harms, today, President Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.   The Biden-Harris Administration’s Investing in America agenda has already catalyzed more than $860 billion in business investments through smart, public incentives in industries of the future like electric vehicles (EVs), clean energy, and semiconductors. With support from the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act, these investments are creating new American jobs in manufacturing and clean energy and helping communities that have been left behind make a comeback.   As President Biden says, American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security. Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities.   Today’s actions to counter China’s unfair trade practices are carefully targeted at strategic sectors—the same sectors where the United States is making historic investments under President Biden to create and sustain good-paying jobs—unlike recent proposals by Congressional Republicans that would threaten jobs and raise costs across the board. The previous administration’s trade deal with China  failed  to increase American exports or boost American manufacturing as it had promised. Under President Biden’s Investing in America agenda, nearly 800,000 manufacturing jobs have been created and new factory construction has doubled after both fell under the previous administration, and the trade deficit with China is the lowest in a decade—lower than any year under the last administration.   We will continue to work with our partners around the world to strengthen cooperation to address shared concerns about China’s unfair practices—rather than undermining our alliances or applying indiscriminate 10 percent tariffs that raise prices on all imports from all countries, regardless whether they are engaged in unfair trade. The Biden-Harris Administration recognizes the benefits for our workers and businesses from strong alliances and a rules-based international trade system based on fair competition.   Following an in-depth review by the United States Trade Representative, President Biden is taking action to protect American workers and American companies from China’s unfair trade practices. To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products.   Steel and Aluminum   The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024.   Steel is a vital sector for the American economy, and American companies are leading the future of clean steel. Recently, the Biden-Harris Administration announced $6 billion for 33 clean manufacturing projects including for steel and aluminum, including the first new primary aluminum smelter in four decades, made possible by the Bipartisan Infrastructure Law and the Inflation Reduction Act. These investments will make the United States one of the first nations in the world to convert clean hydrogen into clean steel, bolstering the U.S. steel industry’s competitiveness as the world’s cleanest major steel producer.   American workers continue to face unfair competition from China’s non-market overcapacity in steel and aluminum, which are among the world’s most carbon intensive. China’s policies and subsidies for their domestic steel and aluminum industries mean high-quality, low-emissions U.S. products are undercut by artificially low-priced Chinese alternatives produced with higher emissions. Today’s actions will shield the U.S. steel and aluminum industries from China’s unfair trade practices.   Semiconductors   The tariff rate on semiconductors will increase from 25% to 50% by 2025.   China’s policies in the legacy semiconductor sector have led to growing market share and rapid capacity expansion that risks driving out investment by market-driven firms. Over the next three to five years, China is expected to account for almost half of all new capacity coming online to manufacture certain legacy semiconductor wafers. During the pandemic, disruptions to the supply chain, including legacy chips, led to price spikes in a wide variety of products, including automobiles, consumer appliances, and medical devices, underscoring the risks of overreliance on a few markets.   Through the CHIPS and Science Act, President Biden is making a nearly $53 billion investment in American semiconductor manufacturing capacity, research, innovation, and workforce. This will help counteract decades of disinvestment and offshoring that has reduced the United States’ capacity to manufacture semiconductors domestically. The CHIPS and Science Act includes $39 billion in direct incentives to build, modernize, and expand semiconductor manufacturing fabrication facilities as well as a 25% investment tax credit for semiconductor companies. Raising the tariff rate on semiconductors is an important initial step to promote the sustainability of these investments.   Electric Vehicles (EVs)   The tariff rate on electric vehicles under Section 301 will increase from 25% to 100% in 2024.   With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China’s exports of EVs grew by 70% from 2022 to 2023—jeopardizing productive investments elsewhere. A 100% tariff rate on EVs will protect American manufacturers from China’s unfair trade practices.   This action advances President Biden’s vision of ensuring the future of the auto industry will be made in America by American workers. As part of the President’s Investing in America agenda, the Administration is incentivizing the development of a robust EV market through business tax credits for manufacturing of batteries and production of critical minerals, consumer tax credits for EV adoption, smart standards, federal investments in EV charging infrastructure, and grants to supply EV and battery manufacturing. The increase in the tariff rate on electric vehicles will protect these investments and jobs from unfairly priced Chinese imports.   Batteries, Battery Components and Parts, and Critical Minerals   The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024.   The tariff rate on natural graphite and permanent magnets will increase from zero to 25% in 2026. The tariff rate for certain other critical minerals will increase from zero to 25% in 2024.   Despite rapid and recent progress in U.S. onshoring, China currently controls over 80 percent of certain segments of the EV battery supply chain, particularly upstream nodes such as critical minerals mining, processing, and refining. Concentration of critical minerals mining and refining capacity in China leaves our supply chains vulnerable and our national security and clean energy goals at risk. In order to improve U.S. and global resiliency in these supply chains, President Biden has invested across the U.S. battery supply chain to build a sufficient domestic industrial base. Through the Bipartisan Infrastructure Law, the Defense Production Act, and the Inflation Reduction Act, the Biden-Harris Administration has invested nearly $20 billion in grants and loans to expand domestic production capacity of advanced batteries and battery materials. The Inflation Reduction Act also contains manufacturing tax credits to incentivize investment in battery and battery material production in the United States. The President has also established the American Battery Materials Initiative, which will mobilize an all-of-government approach to secure a dependable, robust supply chain for batteries and their inputs.   Solar Cells   The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.   The tariff increase will protect against China’s policy-driven overcapacity that depresses prices and inhibits the development of solar capacity outside of China. China has used unfair practices to dominate upwards of 80 to 90% of certain parts of the global solar supply chain, and is trying to maintain that status quo. Chinese policies and nonmarket practices are flooding global markets with artificially cheap solar modules and panels, undermining investment in solar manufacturing outside of China.   The Biden-Harris Administration has made historic investments in the U.S. solar supply chain, building on early U.S. government-enabled research and development that helped create solar cell technologies. The Inflation Reduction Act provides supply-side tax incentives for solar components, including polysilicon, wafers, cells, modules, and backsheet material, as well as tax credits and grant and loan programs supporting deployment of utility-scale and residential solar energy projects. As a result of President Biden’s Investing in America agenda, solar manufacturers have already announced nearly $17 billion in planned investment under his Administration—an 8-fold increase in U.S. manufacturing capacity, enough to supply panels for millions of homes each year by 2030.   Ship-to-Shore Cranes   The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024.   The Administration continues to deliver for the American people by rebuilding the United States’ industrial capacity to produce port cranes with trusted partners. A 25% tariff rate on ship-to-shore cranes will help protect U.S. manufacturers from China’s unfair trade practices that have led to excessive concentration in the market. Port cranes are essential pieces of infrastructure that enable the continuous movement and flow of critical goods to, from, and within the United States, and the Administration is taking action to mitigate risks that could disrupt American supply chains. This action also builds off of ongoing work to invest in U.S. port infrastructure through the President’s Investing in America Agenda. This port security initiative includes bringing port crane manufacturing capabilities back to the United States to support U.S. supply chain security and encourages ports across the country and around the world to use trusted vendors when sourcing cranes or other heavy equipment.   Medical Products   The tariff rates on syringes and needles will increase from 0% to 50% in 2024. For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0–7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026.   These tariff rate increases will help support and sustain a strong domestic industrial base for medical supplies that were essential to the COVID-19 pandemic response, and continue to be used daily in every hospital across the country to deliver essential care. The federal government and the private sector have made substantial investments to build domestic manufacturing for these and other medical products to ensure American health care workers and patients have access to critical medical products when they need them. American businesses are now struggling to compete with underpriced Chinese-made supplies dumped on the market, sometimes of such poor quality that they may raise safety concerns for health care workers and patients.   Today’s announcement reflects President Biden’s commitment to always have the back of American workers. When faced with anticompetitive, unfair practices from abroad, the President will deploy any and all tools necessary to protect American workers and industry.  

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