This report is a feasibility study of solar panels station in Jenin City in Palestine. According to the analysis, it is evident that the solar panels and in high demand in Palestine. However, considering the cost of installation and building, starting this business will require a high capital implying that the business might take some time to show returns. As evident in the break-even analysis, the business is likely to break-even in its fourth year. Nevertheless, the business is viable since better returns are expected after the fourth year.
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Description of Products and Services
The increase in insecurity cases, poor economic growth, and lack of enough natural resources has had adverse impacts on the Palestine’s energy situation. This comes at a time when the demand for energy is high due to increase in the number of industries that are expanding on annually basis, high rate of population growth, and the rise in living standards. For this reason, there is a need for a stable and affordable source of energy. The use of solar panels is the most appropriate solution to the challenge facing the Palestinian Energy Authority. As such, this study focuses on the applicability and the use of solar panels in Jenin city as the source of energy.
Solar panels are the best alternative source of energy especially considering the increase in the cost of electricity and harsh economic times. In addition, there is a need for people to use environmentally-friendly sources of energy. The installation of solar panels is easy since they can be mount anywhere provided it is a place where they can pick sun rays effectively to convert it into electricity.
With the constant advocacy for the use of alternative sources of energy, the use of solar panels remains to be one of the suitable approaches to consider in this situation. In spite of this, concerns have been raised regarding its cost effectiveness. The advancement in technology has allowed the development of solar panels models that can work effectively even in times of harsh weather. The implication is that the market for solar panels will not go down even in the harshest weather conditions.
Additionally, there are advanced energy systems that have been developed and features built-in micro inverters. The role of these inverters is to ensure that the solar panels can generate alternating current. This approach ensures that individuals do not have to buy separate in-home inverters for the conversion of direct current to alternating current. Such technology has improved the performance of solar panels significantly. For this reason, it is important for the organization to make sure that they consider the solar panels that have in-built inverters as this ensures that buyers do not incur extra cost of converting electric current.
In terms of maintenance of the solar panels it can be quite economical and cheap to install panels in clusters as opposed to the isolation approach. This is attributable to the fact that once the systems are clustered, they can be maintained and monitored by a single individual.
While these are some of the important consideration to make, it is advisable to be on the lookout for areas that might be affected by or may need technological advancement given that many new initiatives rely on technology to manage or monitor various business functions. For this reason, there is a need to embrace new technology where necessary. However, it is important to understand that at times such technology might lead to additional costs. Thus, weighing the impact of such costs is important before determining the appropriate path to follow.
The target market for the solar panels is the West Bank region specifically, the Jenin City. The population of West Bank is more than 2.5 million people, while Jenin City itself has more than 39,000 people. Evidently, the organization has a large market to serve.
There are a number of companies selling solar panels in Palestine such as Green Solar Technologies, Wright-Way Services, Summer Off Inc., Daystar Electri-Comm Inc. among others. As such, it is highly likely that there will be stiff competition.
Various channels of distribution will be used to ensure that products get to almost every end user. As such, partnering with distributors in the area will be a suitable approach to achieve this objective. To gain competitive advantage such that customers might choose to buy the panels, the organization should focus on pricing and product innovation as the competitive points.
The competitiveness of any organization as well as its relevance within a certain market is highly depended on the marketing strategy that the organization adopts. One of the significant competitive strategy is differentiation. There are numerous ways that an organization can differentiate itself from its competitors such as people differentiation, service differentiation, product differentiation, image differentiation, quality differentiation, as well as innovation differentiation. The organization will use different types of marketing to create a large customer base. These marketing types include online and offline marketing. The organization’s target consumers include wholesalers, retailers, and end users.
This section provides financial projection for the solar panels station project. It is estimated that the station will cover 36.8 acres of land for a projected capacity of 4 megawatts.
In Palestine there are 300 sunny days a year, this allows for 1950 KW production in a year.
When making excel calculations, you must show how each number has been calculated
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Cost for each 1 acre
|item||Kind||Quantity||Price (USD)||Total (USD)|
|solar cells||Monocrystalline 325||274||300||82200|
|electrical cables||–||800 m||4||3200|
|inverter||ABB 5 KW||18||1500||27000|
|wages||engineers & technician||For 7 days||1866||1866|
Productivity of solar panels in the first year
|Month||Solar Irradiance||Kilowatt production in first year|
|Average per year||5.47||1798389|
Main data of the solar station
|Annual solar irradiance||2676||Kilowatt per sq. meter|
|Solar station capacity||1000||KW|
|One panel capacity||325||Watt|
|NO. of panels||3077||Panels|
|Panels direction||to south|
|Aggregate production of panels in first year||1798389||KW|
|Required distance for each Kilowatt||11.24||Meter|
|Required distance for the whole project||11240||Meter|
|Percentage of the lost||10||%|
|Angle of panel tilting||27|
|Cost of station building||980000|
|1 KW sales price||0.187|
|Maintenance (first 10 year)||25000 Per year|
|Maintenance (last 15 years)||35000 Per year|
Income projection for the first 3 years ($)
|Year||Panel efficiency||Annual production||Total income (electricity sales)|
|Cost of station building||980,000.00|
|Total Funding required||1,018,937.88|
Balance sheet, Years 1,2 &3
|Balance Sheet for Years 1, 2, & 3|
|Year 1||Year 2||Year 3|
|Cash in hand||$ 336,299||$ 335,962||$ 335,626|
|Subtotal||$ 336,299||$ 335,962||$ 335,626|
|cost of station building||$980,000||$0|
|Subtotal||$ 1,141,838||$ 38,938||$ 38,938|
|Total Assets||$ 1,478,137||$ 374,900||$ 374,564|
|Owner’s Equity||$ 1,141,838||$ 1,141,838||$ 1,141,838|
|Total Liabilities||$ 1,141,838||$ 1,141,838||$ 1,141,838|
Break Even Analysis
The investor will start seeing a return in the fourth year.
|Year 1||Year 2||Year 3||Year 4|
|Beginning Cash Balance||$ –||-$ 805,539||-$ 508,515||-$ 211,827|
|Cash From Sales||$336,299||$335,962||$335,626||$335,290|
|Total Cash Receipt||$ 336,299||-$ 469,577||-$ 172,889||$ 123,463|
|cost of station building||$980,000||$ –||$ –||$ –|
|solar cells||$82,200||$ –||$ –||$ –|
|constructions||$4,000||$ –||$ –||$ –|
|electrical cables||$3,200||$ –||$ –||$ –|
|Iron||$4,000||$ –||$ –||$ –|
|inverter||$27,000||$ –||$ –||$ –|
|Panels||$2,500||$ –||$ –||$ –|
|Profit/Loss||-$ 805,539||-$ 508,515||-$ 211,827||$ 84,525|
Statement of Viability
This section provides rustication why the project of solar panels station is viable..
One of the problems that will likely affect this project is the cost of installing the solar panels, which is relatively high. The other problem is the issue of high competition in the market. There are numerous large firms in the industry already and hence, the organization will be required to adopt competitive strategies that might have adverse impacts on the returns.
The project focuses on the production and sale of solar panels to wholesalers, retailers, and end users. The project’s goal is to offer individuals alternative source of electricity from naturally available resource. Poor execution of the product’s model might have to negative outcome and hence, act as a deterrent.
There are no possible alternatives available, suggested or even researched.
The project is feasible and hence, its implementation can be done piecewise, whereby the consideration is given on putting up the necessary structures. Risk management controls should be taken into consideration such as having an individual to maintain the panels. To ensure low maintenance cost, the panels should be installed as clusters.