solar led lighting system

2008

Solar LED Lighting System

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Table of Contents Executive Summary ....................................................................................................................................... 3

Introduction .................................................................................................................................................. 4

Technical Analysis ......................................................................................................................................... 5

LED Light .................................................................................................................................................... 5

Solar Energy .............................................................................................................................................. 7

Our Technology ......................................................................................................................................... 8

Life Cycle Cost Analysis ............................................................................................................................. 8

How bright is it? .................................................................................................................................... 8

Economic Analysis ....................................................................................................................................... 10

Marketing Analysis ...................................................................................................................................... 13

Product Analysis .......................................................................................................................................... 17

.................................................................................................................................................................... 18

Marketing Plan ............................................................................................................................................ 21

Promotion ............................................................................................................................................... 21

Distribution ............................................................................................................................................. 22

Operational Plan ......................................................................................................................................... 23

Management ............................................................................................................................................... 24

Economic Justification ................................................................................................................................ 25

Project Cost ............................................................................................................................................. 25

Projected Profit & Loss Statement .......................................................................................................... 26

Projected Balance Sheet ......................................................................................................................... 27

Cash Flow Statement .............................................................................................................................. 28

Assumptions Underlying Financial Statements ...................................................................................... 29

Sales Forecast ...................................................................................................................................... 29

Cost of Sale Scedule ............................................................................................................................ 29

Schedule of Expenses .......................................................................................................................... 30

Inventory Schedule ............................................................................................................................. 30

Product Wise Price & Cost .................................................................................................................. 31

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Executive Summary

Name : M/S Solar Gen Limited (Proposed)

Legal Status : Unquoted Public Limited Company

Business : Solar + LED Based Lighting Solution

Type of Business : Service

Project Cost : PKR 1.382 Million

Financing : 100% Equity

Breakeven Point : Net Sales of PKR 7.752 Million

: 63.28 % of First Year’s projected sales

Summary of Financials

Particulars Year1 Year2 Year3 Year4 Year5

Sales 12,250 13,475 16,170 20,950 29,000

Net Profit / (Loss) 642 707 971 1,518 2,516

Profit & Loss Statement


Assets

Total 2,023 2,730 3,702 5,220 7,736

Capital & Liabilities

Equity 1,382 1,382 1,382 1,382 1,382 Retained Earnings 642 1,349 2,320 3,838 6,354

Total 2,024 2,731 3,702 5,220 7,736

Balance Sheet

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Introduction This project envisages the establishment of a company under the name & style of M/S Solar Gen Limited

‐ (Proposed). The company shall provide lighting solutions to households, offices, local government for

lighting parks, streets and highways. The company shall provide lighting solution based on solar energy

and SSL – solid state lights – LED.

Light Emitting Diode ‐ LED as commonly known is a revolution in lighting. LEDs are small, solid light bulbs, which are extremely energy‐efficient. Until recently, LEDs were limited to single‐bulb use in applications such as instrument panels, electronics, pen lights and, more recently, strings of indoor and outdoor decorative lights. Recent improvements in manufacture have lowered the cost of LEDs, which has expanded their application. The bulbs are now available in clusters, and are popular especially for battery powered items such as flashlights and headlamps. LEDs are also available in arrays which fit standard AC and DC receptacles, lamps, recessed and track lights.

Benefits:

Long‐lasting ‐ LED bulbs last 10 times as long as compact fluorescents and 133 times longer than typical incandescent. Durable ‐ Since LEDs do not have a filament, they are not damaged under circumstances when a regular incandescent bulb would be broken. Because they are solid, LED bulbs hold up well to jarring and bumping. Cool ‐ these bulbs do not cause heat build‐up; LEDs produce 3.4 Btu’s/hour, compared to 85 for incandescent bulbs. Energy‐saving ‐ LEDs use a fraction of the wattage of incandescent bulbs. Batteries will last 10 to 15 times longer than with incandescent bulbs. Also, because these bulbs last for years, energy is saved in maintenance and replacement costs. Light for remote areas ‐ because of the low power requirement for LEDs, using solar panels becomes more practical and less expensive than running an electric line or using a generator for lighting.

Challenges

Cost ‐ although the cost keeps going down, LEDs are still expensive. A single AC bulb (30 LED), replacing a 25 watt incandescent, may cost about Rs. 480/=. Light Field ‐ LEDs are focused lights, and therefore are best as task specific lighting such as reading lights, desk lamps, night lights, spotlights, security lights, signage lighting, etc. They do not radiate light in 360 degrees as an incandescent does. The light will be bright where you point it towards.

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Technical Analysis

LED Light A Light Emitting Diode (LED) is a semiconductor device which converts electricity into light. Each diode is

about 1/4 inch in diameter and uses about ten milliamps to operate at about a tenth of a watt. LEDs are

small in size, but can be grouped together for higher intensity applications. LED fixtures require a driver

which is analogous to the ballast in fluorescent fixtures. The drivers are typically built into the fixture

(like fluorescent ballasts) or they are a plug transformer for portable (plug‐in) fixtures. The plug‐in

transformers allow the fixture to run on standard 120 volt alternating current (AC), with a modest

(about 15 to 20 percent) power loss.

The efficacy of a typical residential application LED is approximately 20 lumens per watt (LPW).

Incandescent bulbs have an efficacy of about 15 LPW and compact fluorescents (Energy saver Bulbs) are

about 60 LPW, depending on the wattage and lamp type.

LEDs are better at placing light in a single direction than incandescent or fluorescent bulbs. Because of

their directional output, they have unique design features that can be exploited by clever designs. LED

strip lights can be installed under counters, in hallways, and in staircases; concentrated arrays can be

used for room lighting. Waterproof, outdoor fixtures are also available. Some manufacturers consider

applications such as gardens, walkways, and decorative fixtures outside garage doors to be the most

cost‐efficient.

LED lights are more rugged and damage‐resistant than compact fluorescents and incandescent bulbs.

LED lights don't flicker. They are very heat sensitive; excessive heat or inappropriate applications

dramatically reduce both light output and lifetime. Uses include:

Task and reading lamps Linear strip lighting (under kitchen cabinets) Recessed lighting/ceiling cans Porch/outdoor/landscaping lighting Art lighting Night lights Stair and walkway lighting Pendants and overhead Retrofit bulbs for lamps

Attributes

Individual LEDs are considerably more efficient; however, the lamp or fixture design is reduced by the

driver and electronics. In addition, LEDs do not produce heat like incandescent bulbs.

LEDs last considerably longer than incandescent or fluorescent lighting. LEDs don't typically burn out

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like traditional lighting, but rather gradually decrease in light output. Their "useful life" is defined by

the Alliance for Solid‐State Illumination Systems and Technologies (ASSIST) as the time it takes until

70% of initial light output is reached, often 50,000 hours. They are resistant to thermal and vibrational

shocks and perform well when subjected to frequent on‐off cycling.

Source – US Department of Energy

No additional tools or training are required for installation of LED fixtures.

Initial Cost

The biggest limitation to LED for common residential use is the cost of manufacturing due to still‐limited

production runs. Manufacturers claim production will increase considerably in the near future, further

lowering prices. Currently, there is a limited number of LED fixture manufactures, but this is changing.

Retrofit bulbs range from Rs. 200/= to Rs. 850/= for night lights and small lamps.

Operational Cost

The cost savings of LEDs can be found in smaller wattage lamps or for applications that take advantage

of their longevity, such as difficult to reach places. They are also advantageous for dimmable fixtures,

since dimmable fluorescents are expensive.

Installation

The small size of LED lights encourages a variety of design options. White LED lamps are available with

Edison (screw‐in type) bases to retrofit existing fixtures. There are LED strips that can be used under

cabinets. In addition, outdoor landscaping fixtures are available.

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Benefits/Costs

LED lamps have many advantages over traditional lighting methods. These include:

Low energy consumption – retrofit bulbs range from 0.83 to 7.3 Watts Long service life – LED bulbs can last up to 80,000 hours Durable – LED bulbs are resistant to thermal and vibrational shocks and turn on instantly from ‐

40C° to 185C°, making them ideal for applications subject to frequent on‐off cycling, such as garages and basements

Directional distribution of light – good for interior task lighting No infrared or ultraviolet radiation – excellent for outdoor use because UV light attracts bugs Safety and environmentally conscious – LEDs contain no mercury and remain cool to the touch Fully dimmable – LEDs do not change their color tint when dimmed unlike incandescent lamps

that turn yellow No frequency interference – no ballast to interfere with radio and television signals Range of color – LEDs can be manufactured produce all colors of the spectrum without filters,

they can also produce white light in a variety of color temperatures

There are some current disadvantages to LED lighting:

LEDs are currently more expensive than more conventional lighting technologies, and may be hard to locate

LED is very heat sensitive. Excessive heat or inappropriate applications dramatically reduce both light output and lifespan

LEDs typically cast light in one direction at a narrow angle compared to incandescent or fluorescent lamps so lenses or reflectors are needed in fixtures to broaden the beam (if desired)

Solar Energy A solar cell or photovoltaic cell is a device that converts solar energy into electricity by the photovoltaic

effect. Photovoltaic is the field of technology and research related to the application of solar cells as

solar energy. Sometimes the term solar cell is reserved for devices intended specifically to capture

energy from sunlight, while the term photovoltaic cell is used when the source is unspecified. Solar cells

have many applications. Individual cells are used for powering small devices such as electronic

calculators. Photovoltaic arrays generate a form of renewable electricity, particularly useful in situations

where electrical power from the grid is unavailable such as in remote area power systems, Earth‐

orbiting satellites and space probes, remote radiotelephones and water pumping applications.

Photovoltaic electricity is also increasingly deployed in grid‐tied electrical systems.

Solar cells are often electrically connected and encapsulated as a module. PV modules often have a

sheet of glass on the front (sun up) side, allowing light to pass while protecting the semiconductor

wafers from the elements (rain, hail, etc.). Solar cells are also usually connected in series in modules,

creating an additive voltage. Connecting cells in parallel will yield a higher current. Modules are then

interconnected, in series or parallel, or both, to create an array with the desired peak DC voltage and

current.

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The power output of a solar array is measured in watts or kilowatts. In order to calculate the typical

energy needs of the application, a measurement in watt‐hours, kilowatt‐hours or kilowatt‐hours per day

is often used. A common rule of thumb is that average power is equal to 20% of peak power, so that

each peak kilowatt of solar array output power corresponds to energy production of 4.8 kW∙h per day.

To make practical use of the solar‐generated energy, the electricity is most often fed into the electricity

grid using inverters (grid‐connected PV systems); in standalone systems, batteries are used to store the

energy that is not needed immediately.

A number of detailed studies on the energy requirements on the three types of photovoltaic (PV)

materials, which make up the majority of the active solar market: single crystal, polycrystalline, and

amorphous silicon were reviewed. It was found that modern PV cells based on these silicon technologies

pay for themselves in terms of energy in a few years (1‐5 years). They thus generate enough energy over

their lifetimes to reproduce themselves many times (6‐31 reproductions) depending on what type of

material, balance of system, and the geographic location of the system. It was found that regardless of

material, built‐in PV systems are a superior ecological choice to centralized PV plants. Finally, the results

indicate that efficiency plays a secondary role to embodied energy in the overall net energy production

of modern solar cells.

Our Technology The company is in active negotiation with Shanghai Kepsun Optoelectronics Co. Ltd, China for technical

collaboration. Shanghai Kepsun manufactures variety of LED products such as street lights, daylight

lamps, bulbs, spotlights, flood lights, and tunnel lights in different designs. These lights can be used

through existing mains AC 220V power outlet or through solar charged batteries using 12V DC input. We

are concentrating on solar powered lights. This technology depends on three items viz. (1) LED light (2)

Solar panel and (3) Solar controller. Solar cell or solar panel is used to charge the re‐chargeable battery

that provides 12V DC to bulb for lighting purpose and solar controller is used to manage the charging of

battery.

Life Cycle Cost Analysis Life cycle cost analysis has been done using data of incandescent bulb, compact fluorescent bulb, and

LED bulb. Incandescent bulb is the conventional bulb of Edison era. Whereas compact fluorescent light

bulb is in vogue as energy efficient light commonly known as “Energy Saver”. LED – Light Emitting Diode

light bulb a new revolution in light that the company is pursuing. The comparison is based on a normal

household lighting requirement and equivalent lumens produced by each type of light.

How bright is it? How do we compare the brightness of Compact Fluorescent Light (“CFL”) bulbs to incandescent lights? Energy efficiency of light sources is typically measured in lumens per watt (lm/W), meaning the amount of light produced for each watt of electricity consumed. This is known as luminous efficacy.

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Source – US Department of Energy Analyzing data provided by various manufacturers of LED lights shows that a 13 watt CFL with the

brightness of a 60 watt incandescent bulb is a “60 watt‐equivalent, 13 watt CFL.” The CFL bulb uses only

13 watts of power (what you pay for,) but it generates the light of a 60 watt incandescent

bulb. Therefore, the CFL uses only 13/60 = 22% of the power of the incandescent to generate the same

brightness.

For white LED’s we use the same system, and rate our bulbs by “watt‐equivalent,” with incandescent

light as the reference just like before. So, a 7‐watt LED that generates the brightness of a 70‐watt

incandescent bulb is a “70 watt‐equivalent, 7 watt LED.” The LED uses only 10% of the power of the

incandescent to generate the same brightness. That 90% energy savings is typical for LED’s, versus

incandescents. (Incandescents are inefficient light sources: they generate over 90% heat and less than

10% light.)

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Economic Analysis For our economic analysis, we have used data from our affiliate – Shanghai Kepsun Optoelectronics Co.

Ltd. A normal urban house hold lighting requirement has been calculated at about 1000 W of

incandescent bulb light i‐e 10 bulbs of 100 W each and that requirement is then converted into CFL and

LED lights. The economic analysis has been done using the life cycle costing method taking the LED light

life as a bench mark.

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Energy Savings Calculator for Replacing Light Bulbs

Assumptions

LED Qty(Light-Emitting Diode Light Bulbs) Load Cost (PKR)

Normal Urban Household Lighting Requirement

2 X Bed Rooms X 12 Watt X 1 LED Bulbs 2 24 Watt 960.001 X TV Lounge X 12 Watt X 2 LED Bulbs 2 24 Watt 960.001 X Drawing Room X 12 Watt X 2 LED Bulbs 2 24 Watt 960.001 X Dining Room X 12 Watt X 1 LED Bulb 1 12 Watt 480.001 X Kitchen X 12 Watt X 1 LED Bulb 1 12 Watt 480.002 X Bath Rooms X 6 Watt X 1 LED Bulb 2 12 Watt 480.001 X Outdoor X 6 Watt X 2 LED Bulb 2 12 Watt 480.00

12 120 Watt 4,800.00

Solar System

Solar Panel Cost 1 150 Watt 37,500.00Battery Charge Controller Card 1 4,000.00Maintenance Free Batter 50Amps 1 10,000.00

51,500.00

Total Solar System & Bulb Replacement Cost 56,300.00

1 Solar panel load has been worked out at 125% of total load to account for fluctuation.2 50Amps battery would give continous lighting for 10 hours at 50% load and 5 hours at 100% load.

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Energy Savings Calculator for Replacing Light Bulbs

Incandescent Light BulbsCFL(Compact Fluorescent Light Bulbs)

LED(Light-Emitting Diode Light Bulbs)

Life Span (in hours) 1,500 10,000 60,000Watts 100 25 12Cost PKR 25.00 PKR 160.00 PKR 480.00KWh of electricty used over 60k hours 6,000 1,500 720Electricity Cost (@ 5.76 per KWh) PKR 34,560.41 PKR 8,640.10 PKR 0.00Solar Panel 150 Watt (For 25 years) PKR 0.00 PKR 0.00 PKR 37,500.00Maintenance Free Battery (For 7 years) PKR 0.00 PKR 0.00 PKR 10,000.00Solar Panel Controller Card (For 25 years) PKR 0.00 PKR 0.00 PKR 4,000.00Bulbs needed for 60k hours of usage 40 6 1Equivalent 60k hour bulb expense PKR 1,000.00 PKR 960.00 PKR 480.00Total 60,000 Hour Lighting Spend PKR 35,560.41 PKR 9,600.10 PKR 51,980.00

Calculate Your Energy Savings

# of household light bulbs 10 10 10Your estimated daily usage (hours) 5 5 5Days in month 30 30 30

Household savings over 60,000 hours (energy + replacement)

Household cost PKR 355,604.09 PKR 96,001.02 PKR 56,300.00Savings by switching from Incandescent PKR 0.00 PKR 259,603.06 PKR 299,304.09

Monthly household energy savingsKWh used per month 150 38 0Electricity Cost (@ 5.76 per KWh) PKR 864.01 PKR 216.00 PKR 0.00Savings by switching from Incandescent PKR 0.00 PKR 648.01 PKR 864.01

Yearly household energy savingsKWh used per year 1,825 456 0Electricity Cost (@ 5.76 per KWh) PKR 10,512.12 PKR 2,628.03 PKR 0.00Savings by switching from Incandescent PKR 0.00 PKR 7,884.09 PKR 10,512.12

Electricity cost per KWh has been taken average during the lifespan of LED bulb and has been calculated

to increase 10% every year taking base rate average for household as reported by PEPCO for the period

from July 2007 to March 2008, which is Rs. 4.25 per KWh.

The above analysis shows that replacement of current lighting arrangement with the Solar Light + LED

bulbs is much more beneficial not only in terms of savings but also on account of supply of

uninterrupted light.

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Marketing Analysis This summer, the country would face an electricity deficit of over 3,500 megawatts (MW). The pace at which the electricity deficit is likely to increasing, it is feared that by 2010 the gap between demand and supply would be around 4000 megawatts (MW). The situation demands a collective effort on the part of all stakeholders of society, including policy makers, academia, industrialists and entrepreneurs and ordinary citizens. Following table shows the historical consumption of different energy sources.

A further breakup shows that largest consumer of electricity is the household sector followed by industrial sector. Electricity consumption is increasing at a faster rate in recent couple of years at an average of 8%.

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The total installed capacity of electricity generation witnessed no change during July‐March 2006‐07, remaining at 19,440 MW. The Water and Power Development Authority (WAPDA), Karachi Electric Supply Corporation (KESC), Karachi Nuclear Power Plant (KANUPP) and Chashma Nuclear Power Plant are the four main public sector organizations involved in power generation, transmission and distribution of electricity in the country. In addition, the Independent power projects (IPPs) are also involved in power generation. The total installed capacity of WAPDA stood at 11,363 MW during July‐March 2006‐07 which accounts for 58 percent of total installed capacity. Of this, hydel power accounts for 56.9 percent or 6,463 MW and thermal accounts for 43.1 percent or 4,900 MW. The total installed capacity of IPPs is 5,859 MW (30.1 percent), KESC’s is 1,756 MW (9.0 percent) and nuclear power is 462 MW (2.4 percent) of the total installed capacity. The detail is given below: ‐

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The electricity generated by WAPDA during July‐March 2006‐07 was 63,020 Gwh, as against 58,928 Gwh during the corresponding period last year, thus registering an increase of 6.9 percent due to higher generation through thermal by 12.8 percent. The detail is as follows: ‐

The number of electricity consumers has increased over the years due to rapid extension of electric supply to villages and fast urbanization. The number of consumers has increased to 16.7 million till March 2007, up from 15.9 million in 2005‐06, showing an increase of 5 percent over the last year and a growth of about 70 percent since 1996‐97. The following table illustrates the position.

Historically Pakistan faced electricity deficit from 1990 to 1997. The demand and supply of electricity was balanced in 1997. From 1997, the generation capacity increased and it was expected that the demand and supply position of electricity will remain in equilibrium up to 2009. However, as existing peak demand approached 6.6 percent growth per annum during 2001 to 2007 the supply shortage occurred much earlier than 2009. Brisk pace of economic activity, rising levels of income of the people, the double‐digit growth of large scale manufacturing, higher agricultural production and village

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electrification program have all resulted in higher demand of power in Pakistan. All these factors have contributed to the shortage of nearly 3500MW. This gap needs to be filled by using all the resources available. Presently power shortage is a worldwide phenomenon due to the accelerating levels of economic activity. According to the International Energy Agency, which acts as energy policy advisor to 26 developed countries, the world can only meet its energy needs till 2030‐35 through traditional sources. Realizing the gravity of the situation many countries are taking steps to develop alternate source of energy to meet their future requirements. Similarly, Pakistan is also seeking to develop generation capacity through alternate energy including the wind and solar technologies. The goal is to ensure that at least 7 percent of total power generation capacity is met through wind & solar energy by year 2030, which means about 4700MW of electricity through renewable energy sources and solar energy is one of the most viable and free source available to us. So there is a huge energy market for solar based lighting solutions.

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Product Analysis With respect to the consumer demographics and target market best suited with the technology we

developed four different packages of light solutions to the consumers. These are different in lighting

capacity and pricing. The detailed features of the products are as follows:

Complete Urban Household Lighting Solution P.Code CU001

AssumptionsLED Qty(Light-Emitting Diode Light Bulbs) Load

Amount (PKR)

Sale Price 65,000.00



12 120 Watt 4,800.00

Solar System

Solar Panel Cost 1 150 Watt 37,500.00Battery Charge Controller Card 1 4,000.00Battery 50Amps 1 4,000.00

45,500.00


Gross Profit 14,700.00


This package is offered to the urban customers with the complete light solution for their living house

with the perception that they will use 50% to 100% of its installed capacity, and will use no alternate

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lighting system parallel with this solution. This package can also be useful for the institutional customer

but we are not targeting them at the initial phase of the business.

Partial Urban Household Lighting Solution P.Code PU001


Amount (PKR)




12 120 Watt 4,800.00

Solar System

Solar Panel Cost 1 50 Watt 12,500.00Battery Charge Controller Card 1 4,000.00Battery 25 Amps 1 2,000.00

18,500.00



1 Solar panel load has been worked out at maximum of 40 Watt load.2 25 Amps battery would give continous lighting for 6 hours at 40 Watt load.

This package is also designed to provide the lighting solution to the urban customer but with the

expectation that they will not use the full installed capacity of the system or they will not use the full

available capacity, it can be used as alternate source of lighting.

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Economy Urban Household Lighting Solution P.Code EU001


Amount (PKR)



0.001 X TV Lounge X 6 Watt X 2 LED Bulbs 2 12 Watt 960.001 X Drawing Room X 6 Watt X 2 LED Bulbs 2 12 Watt 960.00

0.001 X Kitchen X 6 Watt X 2 LED Bulb 2 12 Watt 480.00

0.000.00

6 36 Watt 2,400.00

Solar System


13,500.00




This package is designed for the low income class living in the urban area and facing energy problems

and most of them are price conscious. This is not a complete home solution but can fulfill the basic

lighting requirements of the consumer.

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Rural/Remote Household Lighting Solution P.Code RL001


Amount (PKR)



0.001 X Living Room X 6 Watt X 1 LED Bulbs 1 06 Watt 240.00

0.000.00

1 X Kitchen X 6 Watt X 1 LED Bulb 1 06 Watt 240.000.000.00

2 12 Watt 480.00

Solar System


7,500.00




This package is planned to provide the light to the rural and remote areas where there is no electricity

so for and they are not enjoying the colors of life. We will provide this solution to the consumer at the

lowest possible price or at cheaper rate.

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Marketing Plan The company is pursuing four solutions aimed at four categories of customers viz. (1) A normal urban

household that wish to switch complete lighting to Solar powered LED based lighting solution (2) A

normal urban household that wish to switch necessary lighting to Solar powered LED based lighting

solutions (3) A normal urban household that wish to switch must have lighting to Solar powered LED

based lighting solution and (4) Rural / Remote household that wish to light up the house.

Although all urban areas of the country are linked with the main power grid and there should be no

need for our lighting solutions but due to load shedding or load management these are without any light

for 6hrs to 12hrs daily and cost of electricity is increasing at an average rate of 10% are the main points

that we have focused on this market segment. The initial cost of the solar based LED lighting solution is

high but this solar based LED lighting solution will be free for a minimum of seven years without any

replacement for bulbs, battery and solar panel. The life of solar panel is twenty five years so the only

replacement during this period is bulbs and battery three times.

The highest concentration of non‐electrified households is in rural and remote areas. These end‐users

do not have access to the electricity grid and rely mainly on kerosene oil lamps. These households will

get benefit from the use of solar panels for lighting in the night at free for twenty five years.

We shall market our products direct to customers. For this purpose, we shall advertise our solutions in

print media and solicit housing colonies management. Promotional campaigns shall also be part of our

promotion strategies and these shall be like sampling of LED bulbs, donating complete solution and

public demonstration of products to attract customers.

There are two to three main players in the market that are selling complete solar powered LED based

lighting solutions. They are concentrating on Government’s Rural Electrification Program and are

working in remote off grid areas. Presently, urban household market is vacant and we shall be

concentrating on this market and offering a replacement of inverter based lighting solution that is more

economical and more beneficial in terms of luminous flux. We are cost efficient as compared to present

competition. We shall provide our customers personalized services vis‐à‐vis our competitors as they are

providing solutions as contractor to government, which is a very stereo typed service.

Promotion Company will use a promotional strategy based on the limited resources so our promotional focus will

be on the road shows nearby to the newly developed or developing colonies and we will take part in the

number of trade exhibitions to help our consumers to know our products.

Another aspect of our promotional strategy will be the close collaboration with the NGOs this is some

sort of different mode but it would help company to get familiarity in the remote areas and especially

rural areas.

We will also use electronic media for the products promotion including internet and product awareness

programs on television.

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Distribution As the market segment for the products are very diverse so this would not be beneficial to

adopt a static distribution strategy so we will follow a dynamic distribution strategy for the

startup phase of the venture. We will use the options of large retailers, distributors, sales

franchises, electronic distribution and distribution through NGO networks during this strategy.

At the startup phase we will follow low cost distribution channels like E‐distribution and

distribution through NGO also will prefer to use some franchises. Later on in the initial phase

and expansion phase we will focus on intensive marketing and distribution strategy.

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Operational Plan We shall be providing service to our customers by sourcing the most efficient and economical source for

supply of our components. The company is in negotiation with the Shanghai Kepsun Optoelectronics Co.

Ltd, China for technical collaboration and import of LED bulbs.

Solar panels are being assembled in Industrial Estate Hattar, Pakistan and also are being imported from

China and we shall make all our purchases from local sources thus avoiding long lead times.

There are four manufacturers of lead liquid based batteries in Pakistan and also maintenance free dry

batteries are being imported through proper channels and otherwise into Pakistan and we shall make

our procurement on this account through local sources.

Rest of the components like battery charger card and other miscellaneous items such as wiring and shall

also be procured locally.

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Management This idea is to provide the services in terms of lighting solutions to the consumer by arranging solar

panels, battery charging cards, solar battery, LED bulbs and channels. We will assemble this all into one

package and supply to the end consumer, households in the first phase.

To manage these activities we are the 4 partners contributing the financial and human resources with

skills and knowledge. We, the partners have the diverse knowledge of different required fields. One of

the partners is having engineering degree and expertise that assist technically. Other partner is having

some expertise in the field of finance and command on financial projections, so that will help us in

making proto type of the business activities before going to the field for taking risk.

3rd partner is having local market knowledge and a good social worker in the vicinity; he is having good

social contracts with the people in different fields and engaged in different businesses. The last partner

of our business is having legal knowledge and having some experience of practicing as advocate specially

taking the cases of tax and corporate crimes.

We the team of four as partner will get some other required skills and knowledge by hiring professional

and competent people in our staff.

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Economic Justification The company has developed four readymade solutions to cater to the needs of target market. A very

conservative forecast against the backdrop of 4000MW shortage of electricity has been made for the

purpose of economic justification.

Project Cost

PKR (,000)

Fixed Cost

Office Furniture & Fixture 100 Office Equipment 100

200

Other

Security Advance For Rented Premises 150 Preliminary Expenses 100

250

450

Working Capital

Inventory 782 Cash & Bank 150

932

Total 1,382

Financing

Equity 1,382

Total 1,382

Project Cost

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Projected Profit & Loss Statement


Sales 12,250 13,475 16,170 20,950 29,000

Cost of Sales 9,563 10,519 12,623 16,358 22,650

Gross Profit 2,687 2,956 3,547 4,592 6,350

Operating Expenses 1,700 1,868 2,053 2,256 2,480

Net Profit Before Tax 987 1,088 1,494 2,336 3,870

Income Tax @ 35% 345 381 523 818 1,355

Net Profit / (Loss) 642 707 971 1,518 2,516

Profit & Loss Statement

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Projected Balance Sheet


Assets

Fixed (Net) 180 160 140 120 100

Others 250 250 250 250 250

Current

Inventory 782 805 1,019 1,400 1,820 Cash & Bank 812 1,516 2,293 3,450 5,565

1,593 2,320 3,312 4,850 7,386

Total 2,023 2,730 3,702 5,220 7,736

Capital & Liabilities

Equity 1,382 1,382 1,382 1,382 1,382 Retained Earnings 642 1,349 2,320 3,838 6,354

Total 2,024 2,731 3,702 5,220 7,736

Balance Sheet

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Cash Flow Statement


Opening Balance 150 812 1,516 2,293 3,450

Cash Receipts

Cash From Sales 12,250 13,475 16,170 20,950 29,000 Depreciation 20 20 20 20 20

Total Cash Receipts 12,270 13,495 16,190 20,970 29,020

Cash Payments

Cost of Goods Sold 9,563 10,519 12,623 16,358 22,650 Operating Expenses 1,700 1,868 2,053 2,256 2,480 Increase in Inventory - 23 214 381 421 Income tax payment 345 381 523 818 1,355

Total Cash Payments 11,608 12,791 15,413 19,813 26,905

Cash Generation 662 704 777 1,157 2,115

Closing Balance 812 1,516 2,293 3,450 5,565

Cash Flow Statement

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Assumptions Underlying Financial Statements

Sales Forecast

Product Code Product Name Year1 Year2 Year3 Year4 Year5

CU001 Complete Urban Household Lighting Solution 50 55 66 80 100PU001 Partial Urban Household Lighting Solution 200 220 264 350 500EU001 Economy Urban Household Lighting Solution 100 110 132 175 250RL001 Rural/Remote Household Lighting Solution 100 110 132 175 250

Total 450 495 594 780 1100

Sales Forecast (Qty)


CU001 Complete Urban Household Lighting Solution 3,250 3,575 4,290 5,200 6,500 PU001 Partial Urban Household Lighting Solution 6,000 6,600 7,920 10,500 15,000 EU001 Economy Urban Household Lighting Solution 2,000 2,200 2,640 3,500 5,000 RL001 Rural/Remote Household Lighting Solution 1,000 1,100 1,320 1,750 2,500

Total 12,250 13,475 16,170 20,950 29,000

Sales Forecast (PKR ,000)

Cost of Sale Scedule


CU001 Complete Urban Household Lighting Solution 2,515 2,767 3,320 4,024 5,030 PU001 Partial Urban Household Lighting Solution 4,660 5,126 6,151 8,155 11,650 EU001 Economy Urban Household Lighting Solution 1,590 1,749 2,099 2,783 3,975 RL001 Rural/Remote Household Lighting Solution 798 878 1,053 1,397 1,995

Total 9,563 10,519 12,623 16,358 22,650

Cost of Goods Sold (PKR ,000)

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Schedule of Expenses

Acct. Code Name of Expense Year1 Year2 Year3 Year4 Year5

Rent 300 330 363 399 439 Utilities 60 66 73 80 88 Salaries 600 660 726 799 878 Travelling 120 132 145 160 176 Advertisement & Promotion 600 660 726 799 878 Depreciation & Amortization 20 20 20 20 20

Total 1,700 1,868 2,053 2,256 2,480

Schedule of Operating Expense (PKR ,000)

Inventory Schedule

Product Code Product Name QTYQty (,000) Qty (,000) Qty (,000) Qty (,000) Qty (,000)

CU001 Complete Urban Household Lighting Solution 50 55 66 80 100

L12W LED Bulbs 12 W 8 40 19.2 40 19.2 44 21.12 55 26.4 80 38.4L06W LED Bulbs 6 W 4 20 4.8 20 4.8 22 5.28 30 7.2 40 9.6S150W Solar Panel 150W 1 4 150 4 150 5 187.5 7 262.5 8 300BCHC Battery Charger Card 1 4 16 4 16 5 20 7 28 8 32B50A Battery 50 Amps 1 4 16 4 16 5 20 7 28 8 32

206 206 254 352 412

PU001 Partial Urban Household Lighting Solution 200 220 264 350 500

L12W LED Bulbs 12 W 8 160 76.8 160 76.8 176 84.48 250 120 350 168L06W LED Bulbs 6 W 4 80 19.2 80 19.2 88 21.12 120 28.8 170 40.8S050W Solar Panel 50W 1 16 200 16 200 22 275 30 375 40 500BCHC Battery Charger Card 1 16 64 16 64 22 88 30 120 40 160B25A Battery 25 Amps 1 16 32 16 32 22 44 30 60 40 80

392 392 513 704 949

EU001 Economy Urban Household Lighting Solution 100 110 132 175 250

L12W LED Bulbs 12 W 0 0 0 0 0 0 0 0 0 0 0L06W LED Bulbs 6 W 6 50 12 55 13.2 66 15.84 90 21.6 125 30S030W Solar Panel 30W 1 8 60 9 67.5 11 82.5 15 112.5 20 150BCHC Battery Charger Card 1 8 32 9 36 11 44 15 60 20 80B25A Battery 25 Amps 1 8 16 9 18 11 22 15 30 20 40

120 135 164 224 300

RL001 Rural/Remote Household Lighting Solution 100 110 132 175 250

L12W LED Bulbs 12 W 0 0 0 0 0 0 0 0 0 0 0L06W LED Bulbs 6 W 2 16 3.84 18 4.32 22 5.28 30 7.2 40 9.6S010W Solar Panel 10W 1 8 20 9 22.5 11 27.5 15 37.5 20 50BCHC Battery Charger Card 1 8 32 9 36 11 44 15 60 20 80B10A Battery 10 Amps 1 8 8 9 9 11 11 15 15 20 20

64 72 88 120 160

Total 782 805 1,019 1,400 1,820

Year1 Year2 Year3 Year4 Year5

Inventory Forecast (Qty)

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Product Wise Price & Cost

Complete Urban Household Lighting Solution P.Code CU001


Amount (PKR)




12 120 Watt 4,800.00

Solar System

Solar Panel Cost 1 150 Watt 37,500.00Battery Charge Controller Card 1 4,000.00Battery 50Amps 1 4,000.00

45,500.00




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Partial Urban Household Lighting Solution P.Code PU001


Amount (PKR)




12 120 Watt 4,800.00

Solar System


18,500.00




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Economy Urban Household Lighting Solution P.Code EU001


Amount (PKR)



0.001 X TV Lounge X 6 Watt X 2 LED Bulbs 2 12 Watt 960.001 X Drawing Room X 6 Watt X 2 LED Bulbs 2 12 Watt 960.00

0.001 X Kitchen X 6 Watt X 2 LED Bulb 2 12 Watt 480.00

0.000.00

6 36 Watt 2,400.00

Solar System


13,500.00




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Rural/Remote Household Lighting Solution P.Code RL001


Amount (PKR)



0.001 X Living Room X 6 Watt X 1 LED Bulbs 1 06 Watt 240.00

0.000.00

1 X Kitchen X 6 Watt X 1 LED Bulb 1 06 Watt 240.000.000.00

2 12 Watt 480.00

Solar System


7,500.00




solar led lighting system

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