PROJECT SELECTION

WHY SOLAR ENERGY?In Pakistan demand of electrical energy is

increasing by 8% every year because of increase in population, infrastructure and other related factors. Currently total consumption of electricity is 18,000 MWatt. But Pakistan is unable to produce the required amount of power. Because of shortage of Dams and resources of power generation.

WHY SOLAR ENERGY?Pakistan has 18 gigawatts (GW) of electric

generating capacity. Thermal plants using oil, natural gas, and coal account for about 70 percent of this capacity, with hydroelectricity (hydro) making up 28 percent and nuclear 2.5 percent. Pakistan's total power generating capacity has increased rapidly in recent years, due largely to foreign investment, ultimately leading to a partial alleviation of the power shortages Pakistan often faces in peak seasons. Rotating blackouts ("load shedding") are, however, still necessary in some areas. Transmission losses are about 30 percent, due to poor quality infrastructure and a significant amount of power theft. Periodic droughts affect the availability of hydropower.

REASONS FOR SELECTING PROJECT

Grave energy crisis: If the current growth trend

in the energy supply and demand continues then it is estimated that Pakistan would be facing a shortage of 31% of energy by the year 2010.

• Solar energy potential in Pakistan:

Pakistan is ideally located in the sun belt to take advantage of solar technologies. Balochistan province is particularly rich in solar energy. It has the highest annual mean sunshine duration in the world.

Fuel-less power generation

Green aspect of doing business

Environment friendly Production end wastes

and emissions are manageable using existing pollution controls.

SERVICES & PRODUCTS OFERRED

Solar Water Heaters

Street Lights Working time 8 to 24hours each day Lasting4 to 10 rainy days

Traffic Lights 24 hours for 4 rainy or

cloudy days

Solar Air Conditioners units can be combined

or zoned for 2-10 ton applications.

can be easily operated remotely for up to 12 hours between charges

Garden Lights

5 rainy days

Solar Water Tank

Solar Home System

GOVERNMENT INCENTIVES

No Sales Tax

No Income Tax

No Import Duty

ROLE OF OUR GOVERNMENT:

• Established research and development institutes like:

o Solar Energy Research Centre, (SERC) o Pakistan Council of Scientific and Industrial

Research, (PCSIR)o Pakistan Council of Appropriate Technology,

(PCAT) o National Institute of Silicon Technology, (NIST)o Alternate Energy Development Board, (AEDB)

Continued…• AEDB has created 100 solar homes in all provinces in order

to promote solar energy

• Various national engineering universities have been involved in solar thermal technologies

• Country’s 400 villages (300 in Balochistan + 100 in Sindh) to be electrified through solar energy

(The News)

• Decision to use solar energy-based lights on all important buildings including Prime minister House and secretariat

(Business Recorder)

ROLE OF PRIVATE SECTORMany private businesses in solar energy sectorWarid Telecom, has deployed a Pakistan’s first ever

solar powered BTS site using Huawei’s Solar Powered Macro Base Station (BTS)

MARKET ANALYSIS

EXISTING SERVICE PROVIDERSNascom: (wholesale supplier, importer) Product types: photovoltaic cells, photovoltaic systems,

photovoltaic modules, solar electric power systems

Haroon Brothers: (exporter, importer ) Product types: solar electric power systems, solar air heating

systems, solar water pumping systems, photovoltaic cells

Rockwell Group: (manufacturer, wholesale supplier) Product types: photovoltaic cells,

photovoltaic modules, solar water pumping systems, solar air cooling system, solar cooler

BASIS OF COMPETITION OUR TECHNOLOGY

efficiency 50% more than conventional panels

more solar power and less space required.

panel’s black frame and lack of metal creates a final installed appearance that is integrated and stylish, not obtrusive and unsightly.

Use of CdTe (Cadmium Telluride) compound semiconductor

Continued…Extensive Testing:

"light soak" exposure test to estimate the stability of energy output

"hail ball" test to ensure modules can withstand golf-ball size hail pellets

exposure to accelerated levels of heat and cold – to ensure performance is not affected in extreme environment

SUPPLY-DEMAND GAP

In 2010, forecasts suggest that supply could be twice the demand predicted in the global PV market.

In Pakistan also, there is a vast gap between supply and demand of solar products due to

• Unawareness• Technology new to people here• High installations costs

OUR TARGET MARKET Main target market is the

rural areas of Pakistan Thar in Sindh Entire Balochistan province

80% of the population lives in the rural areas

About 85% of the villages are yet to be electrified

Reason for this target market: Agriculture is still considered the

backbone of our economy, the electrification of rural areas will

stimulate productivity, education

reverse urbanization trends

QUALITY-SERVICE GAPSolar parts are imported (delayed services )

Lack of technical know-how and follow-up

Lack of trained technicians to design, install and maintain solar electric system

Overall low efficiency of solar cell in general

Non-availability of household appliances that

run on low voltages

Requirement and maintenance of backup energy sources e.g. batteries in night

PRIMARY ACTIVITIES• Import of solar products

specially solar panels• Supply of solar products• Installation • After-sales services

SECONDARY ACTIVITIES• Deliver solar energy solutions

to rural households• Market various solar energy

products all over the country

STAGE OF PRODUCT LIFE CYCLE (PLC) Introduction stage of the PLC

SWOT ANALYSISStrengths: Marketing abilities required to market our products. Research department researchers conduct studies as to how our products can be improved in terms of size, quality, efficiency

Weakness: Lack of capital As our business is in its introductory stage, we often face this challenge primarily due to lack of investment in this sector.

Opportunity: The recent energy crisis in Pakistan has provided a suitable environment for this industry and our company also takes opportunity and wants to contribute in solving this crisis.

Threat: The biggest threat that we face is the high cost of our products compared to our competitors.

STRATEGY/OBJECTIVES TO SUCCEED IN MARKET• Objective - To produce electricity to

fulfill the minimum requirement of electrical

power after dusk in the remote rural areas of

Pakistan

• Mission - To alleviate poverty and

protect the environment through applied research

and development of renewable energy based

technologies.

Continued…

Strategy – Concentrate on potential

of solar energy Strategic alliances with the leading players (manufacturers / organizations)

FINANCIAL ANALYSIS

Assumptions of Solar ProjectEconomy Assumptions: Utilities Growth

Rate 8% Salaries & Wages Growth Rate 10% Cash Flow Assumptions: Accounts Receivable cycle ( in days) 15 Accounts Payables cycle ( in days) 30 Material Inventory Period (in days) 30 Cash at the start of operation 1,000,000

Depreciation Assumptions: Building 10% (3000000)Office Equipment 20%(649600) Show Room Infrastructure 10% Vehicles 20%(1000000)

Amortization Assumption: Amortizations Period 5 Years

Revenue Assumptions: Sale Price Growth Rate 5% Dollar Conversion Rate $1 = Rs. 80 Revenues Growth Rate year 1 year 2 year 3

year 4 year 5 year 6 year 7 year 8 9,000,000 ,22%, 15%, 20%, 39%, 10%, 10%,

12%

Inventory Material Assumptions: Inventory Cost Growth Rate 20%Revenue Growth Rate 22%

Expense Assumptions: L.C. Charges 0.50% of Revenue Sales Tax Rate (Local) Exampt of Revenue

Income Tax Rate Exampt of Income Marketing Expense 3% of Revenue Repairs and Maintenance 1.5% of Revenue

Financial Assumptions: Project Life ( Years ) 8 Equity 60% Debt 40% Cost of Debt 18.0% Cost of Equity 15.0% Debt Re-payment ( Installment per year ) 1 Debt Period ( Life ) 8