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A business report which examines the viability of installing solar panels on residential rooftops within the United Kingdom (UK). The scope encompasses a project design that is financially profitable, technically feasible and attractive for investors; one that is obviously environmental friendly.

A business report which examines the viability of installing solar panels on residential rooftops within the United Kingdom (UK). The scope encompasses a project design that is financially profitable, technically feasible and attractive for investors; one that is obviously environmental friendly.

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Project on a Business Plan for the Solar system installation on Residential buildings

  1. 1. BUSINESS ANALYSIS OF SOLAR SYSTEM INSTALLATION ON RESIDENTIAL HOMES Name (Student Number) Abel Kimbinyi (M00459875) Peri Pedro Adukpo-Egi, (M00441129) Bharath Kumar Munusamy (M00508732) Alahmadi, Abdulaziz Madani S (M00517944) Rifat Abdul Rahiman, (M00514416) Mohammed, Adil Pasha (M00517769) Britto Anand Vincent (M00514817) October 2015 A thesis submitted in partial fulfilment of the requirements for an MSc in Engineering Management/Engineering Project Management. Supervisor: PDE 4241 – MSc Thesis Dr Michael Censlive
  2. 2. MSc Thesis ii Plagiarism Declaration
  3. 3. MSc Thesis iii Plagiarism Receipt
  4. 4. MSc Thesis iv Similarity Record
  5. 5. MSc Thesis v Turnitin plagiarism summary Student Individual Work and Plagiarism Summary Student Number Student Name Sections written Word Count Of individual Students Work Percent Plagiarism For Individual Students Work M00459875 Abel Kimbinyi Introduction Financial Conclusion 6,700 <1% M00441129 Peri Pedro Adukpo-Egi Risk Analysis 6,913 <1% M00508732 Bharath Kumar Munusamy Logistics and SCM 5,814 <1% 00514416 Rifat Abdul Rahiman Market Analysis 6,439 <1% M00517944 Alahmadi, Abdulaziz Madani S Installation Description 6,499 <1% M00514817 Britto Anand Vincent Product and System 6,074 <1% M00517769 Mohammed, Adil Pasha Organisation Structure 4,679 <1%
  6. 6. MSc Thesis vi Abstract This report examines the viability of installing solar panels on residential rooftops within the United Kingdom (UK). The scope encompasses a project design that is financially profitable, technically feasible and attractive for investors; one that is obviously environmental friendly. In recent years there has been a drive to find sustainable renewable energy not only in the UK, but all over the world. Most of the electricity generated currently in the UK comes from burning fossil fuels. This process leaves behind a large carbon footprint which is associated with climate change and other pollutions. The UK government has been in the forefront in pioneering initiatives of various green power generation schemes such as wind farms, solar systems, ocean currents and many others (Energy saving trust, 2014). While there is more than one type of power generation using the sun, we shall be using Photovoltaic (PV); utilising the sun light. Simple yet effective concepts have been used to maximise profits. We have capitalised on dropping prices of solar panels from China (premium quality) and the government green energy incentives that are currently in place. The unnecessary need for a middleman has been completely eliminated in this business model thus saving us large sums of money. The storage of operational and installation equipment in rented shipping containers is yet another economical innovative approach to cost cutting. This report outlines how technology can be used effectively to achieve a required outcome cheaply and efficiently. Tried and tested measures have been put in place to protect the business interests. With solar installation companies mushrooming, we differentiate ourselves by (1) giving our customers a foretaste of the beauty of our solar deal for one year, (2) using the top of the range solar panels, (3) giving them ownership after one year at half the market price, and (4) an optional maintenance contract for five years. Word Count: 40,760
  7. 7. MSc Thesis vii Acknowledgement We would like to first of all thank the invisible God who comforted us and encouraged us to keep pressing on in the face of discouragements; without his help all help would have amounted to nothing. We wish to thank Dr Michael Censlive for his supervision and support during the whole project. Finally, we would like to the thank Prof Mehmet Karamanoglu and Dr Paula Bernaschina for their support.
  8. 8. MSc Thesis viii List of Figures Figure ‎1-1: Annual income Vs Expenditure................................................................ 2 Figure ‎1-2: Annual Gross Profit.................................................................................. 3 Figure ‎3-1: Lean Organisational Structure ................................................................. 8 Figure ‎3-2: GSS Organisational Levels.................................................................... 10 Figure ‎3-3: Office to rent .......................................................................................... 15 Figure ‎3-4: Office Location comparison.................................................................... 16 Figure ‎3-5: Office Setup Layout ............................................................................... 17 Figure ‎3-6: CCTV ..................................................................................................... 24 Figure ‎3-7: Van with lift............................................................................................. 26 Figure ‎4-1: Monocrystalline Panel............................................................................ 30 Figure ‎4-2: Polycrystalline Panel.............................................................................. 31 Figure ‎4-3: Thin Film Panel...................................................................................... 32 Figure ‎4-4: Roof Anchors ......................................................................................... 35 Figure ‎4-5: Mounting Frames................................................................................... 36 Figure ‎4-6: Mid Clamp and End Clamp .................................................................... 37 Figure ‎4-7: String Inverter System ........................................................................... 39 Figure ‎4-8: Microinverters System............................................................................ 40 Figure ‎4-9: DC Isolator............................................................................................. 42 Figure ‎4-10: AC Isolator ........................................................................................... 43 Figure ‎4-11: Stand Alone system ............................................................................. 45 Figure ‎4-12: Grid-Tie System ................................................................................... 46 Figure ‎4-13: Electricity Consumption........................................................................ 48 Figure ‎4-14: String Inverter ...................................................................................... 49 Figure ‎4-15: Single Series String ............................................................................. 50 Figure ‎4-16: Multiple Series String ........................................................................... 51 Figure ‎4-17: Domestic Solar System........................................................................ 55 Figure ‎4-18: Annual Solar Radiation at Different Directions..................................... 56 Figure ‎4-19: Annual Solar Radiation at Different Angles......................................... 57 Figure ‎4-20: Maximum wind speed in uk.................................................................. 58 Figure ‎5-1: Solar Pitch.............................................................................................. 63 Figure ‎5-2: Fitting the Anchors................................................................................. 78 Figure ‎5-3: Installing the panels ............................................................................... 79 Figure ‎5-4: Placing the inverter ................................................................................ 80 Figure ‎6-1: Solar Distribution in the United Kingdom Annually................................. 85 Figure ‎6-2: Direct Normal Irradiance in the United Kingdom (Annually)................... 86 Figure ‎6-3: National Household and Population Projections for 6 years from 2015 . 87 Figure ‎6-4: Number of Roofs without Solar PV Installations..................................... 89 Figure ‎6-5: Mean cost of Solar PV installation in the UK (April 2014 - March 2015) 91 Figure ‎6-6: FIT Payment made from 1 April 2015 - 30 September 2015.................. 93 Figure ‎6-7: UK Carbon Dioxide targets compared to other Greenhouse gas targets95 Figure ‎6-8: Lowest Price comparison between Office (with storage) in different...... 98
  9. 9. MSc Thesis ix Figure ‎6-9: Top 10 sub regions in South East England with roofs without Solar PV ............................................................................................................................... 101 Figure ‎6-10: Number of Roofs without Solar PV in Kent ........................................ 103 Figure ‎7-1: Comparison of Key Suppliers............................................................... 109 Figure ‎7-2: 8x40 Container..................................................................................... 111 Figure ‎7-3: Carriage and Insurance Paid To (CIP)................................................. 113 Figure ‎7-4 Direct costs comparison between China and UK.................................. 116 Figure ‎7-5 Direct Costs .......................................................................................... 117 Figure 8-‎8-1: Risk Management Process............................................................... 119 Figure ‎8-2: Risk Assessment Matrix....................................................................... 122 Figure ‎9-1: Annual Projected Profit and Loss......................................................... 141 Figure ‎9-2: Cumulative Profit and Loss over 5 Years............................................. 142 Figure ‎9-3: Annualised Costs ................................................................................. 143 Figure ‎10-1:: High Yield Gross Compound Interest................................................ 145 Figure ‎10-2: Comparison of Interest....................................................................... 146 Figure E-3:Electrical installation certificate............................................................. 196
  10. 10. MSc Thesis x List of Tables Table ‎3-1: Office Location Cost Comparison............................................................ 16 Table ‎3-2: Office Setup Costs .................................................................................. 18 Table ‎3-3: Employee Costs...................................................................................... 19 Table ‎3-4: Shift Rota ................................................................................................ 19 Table ‎3-5: Team Schedule....................................................................................... 20 Table ‎3-6: Recurring Expenses................................................................................ 21 Table ‎3-7: Non-recurring Expenses.......................................................................... 22 Table ‎3-8: Electricity Comparison ............................................................................ 23 Table ‎3-9: Transport Vehicles .................................................................................. 27 Table ‎4-1: Comparison between Monocrystalline, Polycrystalline and Thin Film .... 34 Table ‎4-2: Comparison between Grid-Tie Inverters ................................................. 41 Table ‎4-3: Wire Gauage Size ................................................................................... 44 Table ‎4-4: System Size and Annual Output ............................................................. 47 Table ‎4-5: Inverter Ratings................................................................................. 52 Table ‎4-6: Voltage correction factor ......................................................................... 53 Table ‎5-1: Solar Pathfinder ...................................................................................... 61 Table ‎5-2: Cost of PPE............................................................................................. 82 Table ‎6-1: Assessment of Market Areas Number of Roofs with Solar PV Installations and without Solar PV Installations............................................................................ 89 Table ‎6-2: Electricity consumed annually for different regions of the United Kingdom (MWh) ...................................................................................................................... 90 Table ‎6-3: FIT rates (July 2015 - December 2015) .................................................. 92 Table ‎6-4: FIT Payment made between 1 April 2015 - 30 September 2015............ 93 Table ‎6-5: Degression Rates for FIT in the United Kingdom.................................... 96 Table ‎6-6: Busiest Ports of the United Kingdom....................................................... 97 Table ‎6-7: Top 10 sub regions in South East England with Roofs without Solar PV Installation.............................................................................................................. 100 Table ‎6-8: Number of Roofs without Solar PV in Kent ........................................... 102 Table ‎6-9: Sub Regions with highest expected Increase of residential Solar PV installations ............................................................................................................ 104 Table ‎7-1 Price Comparison of CIF and CIP.......................................................... 114 Table ‎7-2: Direct Cost Comparison of China and UK............................................. 115 Table 8-‎8-1: Risk Control Measures....................................................................... 125 Table ‎8-2: Risk Contingency .................................................................................. 133 Table ‎8-3: Risk Budget........................................................................................... 133 Table ‎9-1: Payback Period..................................................................................... 139 Table ‎9-2: Present Value Table.............................................................................. 140 Table ‎10-1: Assets in Year 5 .................................................................................. 144
  11. 11. MSc Thesis xi List of Abbreviations AD Annual Demand BOP Business‎Owner’s‎Policy‎ CEN Confiscation, Expropriation and Nationalisation CFR Cost and Freight Ch Holding cost per Unit per Year CIF Cost Insurance and Freight CIP Carriage and Insurance Paid To CP Carriage Paid To Cp Ordering Cost DA- Delivered At Terminal DAP Delivered At Place DDP Delivered Duty Paid DNI Direct Normal Irradiance EOQ Economic Order Quantity EPC Energy Performance Certificate EXW Ex Works FAS Free Alongside Ship FCA Free Carrier FCL Full Container Load FIT Feed-In Tariff FOB Free On Board GW Giga Watts
  12. 12. MSc Thesis xii KW Kilo Watts KWh Kilo Watt Hour LCL Less Than a Container Load MCS Microgeneration Certification Scheme MW Mega Watts PPE Personal Protective Equipment PV Photovoltaic UA Unitary Authority UK United Kingdom W Watt
  13. 13. MSc Thesis xiii Table of Contents Plagiarism Declaration ................................................................................................ii Plagiarism Receipt .....................................................................................................iii Similarity Record ........................................................................................................iv Turnitin plagiarism summary ...................................................................................... v Abstract......................................................................................................................vi Acknowledgement.....................................................................................................vii List of Figures...........................................................................................................viii List of Tables.............................................................................................................. x List of Abbreviations...................................................................................................xi Table of Contents.....................................................................................................xiii Chapter 1 Introduction............................................................................................. 1 1.1 Business Overview........................................................................................ 1 1.2 Financial Overview........................................................................................ 2 1.3 Profit and Loss .............................................................................................. 3 1.4 Vision Statement........................................................................................... 3 1.5 Business Objectives...................................................................................... 4 1.6 Short term ..................................................................................................... 4 1.7 Medium term ................................................................................................. 4 1.8 Long Term..................................................................................................... 4 1.9 Opportunities and Threats............................................................................. 4 1.10 Exit Strategy .............................................................................................. 5 Chapter 2 Business Summary................................................................................. 6 2.2 Business Details............................................................................................ 6 2.3 Key People.................................................................................................... 6 Chapter 3 Organisation Structure............................................................................ 8 3.2 Worker Expertise........................................................................................... 9 3.3 Departmentalisation ...................................................................................... 9 3.4 Span of Control ........................................................................................... 10 3.5 Centralisation and decentralisation ............................................................. 11 3.6 Recruitment................................................................................................. 13 3.7 Office Space................................................................................................ 15 3.8 Location ...................................................................................................... 15
  14. 14. MSc Thesis xiv 3.9 Office Setup Costs ...................................................................................... 18 3.10 Employee Costs....................................................................................... 18 3.11 Recurring Expenses................................................................................. 21 3.12 Non-Recurring Expenses......................................................................... 22 3.13 Office Security.......................................................................................... 23 3.14 Advertising and Promotion....................................................................... 24 Chapter 4 Product and Systems Description......................................................... 29 4.2 Circuit Overview.......................................................................................... 29 4.3 Product Description..................................................................................... 29 4.3.1 PV Solar Panels..............................................................................................................29 4.3.2 Roof Anchors:................................................................................................................35 4.3.3 DC-AC Inverters:............................................................................................................37 4.3.4 Disconnect Switches: ....................................................................................................42 4.3.5 Cables and Wires:..........................................................................................................43 4.4 System Design:........................................................................................... 45 4.4.1 PV Solar System: ...........................................................................................................45 4.4.2 Size of the System:........................................................................................................47 4.4.3 Inverter and String Sizing..............................................................................................49 4.4.4 Schematic Diagram of a Domestic Solar System...........................................................55 4.5 Key Considerations:.................................................................................... 56 4.5.1 Orientation:...................................................................................................................56 4.5.2 Roof Angle:....................................................................................................................57 4.5.3 Wind Load:....................................................................................................................58 Chapter 5 Installation Description.......................................................................... 60 5.2 Site Survey.................................................................................................. 60 5.2.1 Solar Pathfinder ............................................................................................................61 5.2.2 Solar Panel Orientation.................................................................................................62 5.2.3 Roof Pitch......................................................................................................................63 5.2.4 Temperature .................................................................................................................63 5.2.5 Shade.............................................................................................................................63 5.2.6 Front Surface Soiling .....................................................................................................63 5.3 Planning Permission ................................................................................... 64 5.3.1 Microgeneration Certification Scheme (MCS) ..............................................................64 5.3.2 Renewable Energy Consumer Code (RECC) ..................................................................66
  15. 15. MSc Thesis xv 5.3.3 Electrical Installation Certificate (EIC)...........................................................................67 5.3.4 British Photovoltaic Association (BPVA) .......................................................................67 5.3.5 Legislation .....................................................................................................................68 5.3.6 Standard and Regulation:..............................................................................................68 5.4 Contract ...................................................................................................... 68 5.4.1 Conditionality................................................................................................................69 5.4.2 Supplier Obligations for Installation .............................................................................69 5.4.3 Title and Risk.................................................................................................................69 5.4.4 Customer Obligations ...................................................................................................70 5.4.5 Consents........................................................................................................................71 5.4.6 Electricity Power Output...............................................................................................71 5.4.7 Charges and Fees ..........................................................................................................71 5.4.8 Insurance.......................................................................................................................72 5.4.9 Term and Termination ..................................................................................................73 5.4.10 Consequences of Termination ......................................................................................73 5.4.11 Entire Agreement..........................................................................................................74 5.4.12 No Partnership or Agency.............................................................................................74 5.4.13 Variations and Waivers.................................................................................................74 5.4.14 Assignment/Subcontracting..........................................................................................74 5.4.15 Costs..............................................................................................................................75 5.4.16 Severability....................................................................................................................75 5.4.17 Notices ..........................................................................................................................75 5.4.18 Governing Law ..............................................................................................................76 5.4.19 Maintenance.................................................................................................................76 5.5 Scaffolding .................................................................................................. 77 5.6 Installation Process ..................................................................................... 77 5.6.1 Safety ............................................................................................................................77 5.6.2 Fitting the Roof Anchors ...............................................................................................78 5.6.3 Attaching the Frames....................................................................................................78 5.6.4 Installing the Panels ......................................................................................................79 5.6.5 Wiring the Panels..........................................................................................................79 5.6.6 Wiring the Panels to the Inverter: ................................................................................79 5.6.7 Inside the Home:...........................................................................................................80 5.6.8 Commissioning the System...........................................................................................80
  16. 16. MSc Thesis xvi 5.6.9 Time Taken....................................................................................................................81 5.6.10 Testing the System........................................................................................................81 5.6.11 Personal Protective Equipment ....................................................................................81 5.6.12 Signs and Labels ............................................................................................................82 Chapter 6 Market Analysis .................................................................................... 83 6.2 Distribution of Solar energy in the United Kingdom..................................... 84 6.3 Geographical Distribution............................................................................ 87 6.3.1 Roofs .............................................................................................................................88 6.4 Electricity consumption and Expenses........................................................ 90 6.4.1 Cost of Solar PV system Installation..............................................................................90 6.5 Feed-in-Tariff and Carbon Dioxide savings................................................. 92 6.5.1 Carbon Dioxide Emissions.............................................................................................94 6.5.2 Degression Rate ............................................................................................................95 6.6 Business Locations ..................................................................................... 96 6.6.1 Sea Port.........................................................................................................................96 6.6.2 Access............................................................................................................................97 6.6.3 Office and Storage.........................................................................................................97 6.6.4 Workforce .....................................................................................................................98 6.7 Competition................................................................................................. 98 6.8 Information on Local Authorities of South East of England ......................... 99 6.9 Market Forecast ........................................................................................ 103 6.10 Market Risks .......................................................................................... 105 Chapter 7 Logistics and Supply Chain Management........................................... 106 7.2 Logistics .................................................................................................... 106 7.3 Economic Order Quantity (EOQ)............................................................... 106 7.3.1 Annual Demand ..........................................................................................................107 7.3.2 Cost Per Order or Ordering Cost.................................................................................107 7.3.3 Holding Cost per Unit per Year ...................................................................................107 7.4 Key Suppliers............................................................................................ 108 7.5 Suntek supplier ......................................................................................... 109 7.6 Transportation........................................................................................... 110 7.6.1 Containers...................................................................................................................111 7.6.2 Full Container Load (FCL) ............................................................................................112 7.6.3 Less than a Container Load (LCL) ................................................................................112
  17. 17. MSc Thesis xvii 7.7 INCOTERMS............................................................................................. 112 7.7.1 Carriage and Insurance Paid To (CIP)..........................................................................112 7.7.2 Cost Comparison of CIF and CIP..................................................................................114 7.8 Direct Costs............................................................................................... 114 Chapter 8 Risks and Risk Management.............................................................. 118 8.2 Risk Management ..................................................................................... 118 8.2.1 Risk Identification........................................................................................................119 8.2.2 Risk Analysis................................................................................................................121 8.2.3 Risk Responses............................................................................................................123 8.2.4 Risk Monitoring...........................................................................................................131 8.3 Risk Budget and Contingency................................................................... 132 8.4 Competition Risks ..................................................................................... 133 8.4.1 Competition Analysis ..................................................................................................134 8.4.2 Controlling Risks Posed by Competitors .....................................................................136 8.4.3 Project Failure due to Competitors Advancement .....................................................137 Chapter 9 Financial Analysis............................................................................... 138 9.2 Return on Investment................................................................................ 138 9.3 Payback Period......................................................................................... 138 9.4 Present Value Analysis ............................................................................. 140 9.5 Projected Profit and Loss .......................................................................... 141 9.6 Cumulative Annual Revenues and Cost of Sales...................................... 142 9.7 Annualised Revenue and Cost of Sales.................................................... 143 Chapter 10 Conclusion ...................................................................................... 144 10.2 Compound Interest of Investing in a high yield (5%).............................. 145 Bibliography ........................................................................................................... 147 Appendices ............................................................................................................ 169 Appendix A Introduction .................................................................................. 169 A-1 Management Gantt Chart.......................................................................... 169 A-2 Pay Roll..................................................................................................... 170 A-3 Cost of standard Installation...................................................................... 171 Appendix B Business Summary ...................................................................... 172 B-1 Organisation Structure .............................................................................. 172 Appendix C Organisation Structure................................................................. 173
  18. 18. MSc Thesis xviii C-1 Company Logo.......................................................................................... 173 C-2 Website Domain........................................................................................ 174 C-3 Fiat Doblo Cargo Quotation ...................................................................... 174 C-4 Fiat Doblo Cargo Quotation ...................................................................... 175 C-5 Citroen Berlingo Enterprise Van Quotation ............................................... 175 C-6 Berlingo Diesel Quotation ......................................................................... 176 C-7 Office Printer ............................................................................................. 176 C-8 Executive Chair......................................................................................... 177 C-9 Executive Desk ......................................................................................... 177 C-10 Office Chair............................................................................................ 178 C-11 Sofa ....................................................................................................... 179 C-12 Reception Table..................................................................................... 179 Appendix D Product and Systems Descriptions .............................................. 180 D-1 Types of Solar Cell.................................................................................... 180 D-2 Colour codes and applications for Insulation............................................. 184 D-3 Technical data for Solar panels and String Inverter .................................. 186 D-4 Direction and Orientation .......................................................................... 188 D-5 Wind Loading ............................................................................................ 189 Appendix E Service and Installation Processes .............................................. 192 E-1 Definitions and Interpretations................................................................... 192 E-2 Certificates ................................................................................................ 196 E-3 Installation Symbols and Signs ................................................................. 197 E-4 Technical Information................................................................................ 198 E-5 MCS Certification ...................................................................................... 199 E-6 RECCC ..................................................................................................... 200 E-7 Planning Permission ................................................................................. 202 E-8 Site Survey Form ...................................................................................... 203 Appendix F Market Analysis............................................................................ 204 F-1 Top Solar PV Markets............................................................................... 204 F-2 Analysis on Sunshine and Other climate factors....................................... 205 F-3 Climate Stations........................................................................................ 211 F-4 Population and Households ...................................................................... 212 F-5 Analysis on Roofs ..................................................................................... 214
  19. 19. MSc Thesis xix F-6 Analysis on Electricity generated .............................................................. 219 F-7 Analysis on Feed-in-Tariff (FIT) scheme................................................... 224 F-8 Breakdown of Carbon Dioxide released into the atmosphere ................... 229 F-9 Analysis on Ports, Offices and Workforce ................................................. 230 F-10 Distribution of Roofs with and without Solar PV installations in the South East of England .................................................................................................. 234 F-11 Forecast on new Solar PV installations done by 2016........................... 239 Appendix G Logistics and Supply Chain Management.................................... 242 G-1 Comparison of Key Suppliers.................................................................... 242 G-2 Suntek Profile............................................................................................ 246 G-3 Rent for Containers................................................................................... 247 G-4 Specification of Container ......................................................................... 248 G-5 Incoterms .................................................................................................. 249 G-6 Direct Cost Comparisons .......................................................................... 252 Appendix H Risks and Risk Management ....................................................... 258 H-1 Risk Identification...................................................................................... 258 H-2 Risk Register............................................................................................. 259 H-3 Quantifying the Risks Costs ...................................................................... 261 H-4 Justifications for Risk Evaluation Figures.................................................. 261 Appendix I Financial Reports ......................................................................... 268 I-1 Year 1 Trading Accounts........................................................................... 268 I-2 Year 2 Trading Accounts........................................................................... 269 I-3 Year 3 Trading Accounts........................................................................... 270 I-4 Year 4 Trading Accounts........................................................................... 271 I-5 Year 5 Trading Accounts........................................................................... 272 I-6 Compound Interest at 5% High Yield Bond............................................... 273
  20. 20. MSc Thesis 1 Chapter 1 Introduction [Abel Kimbinyi] 1.1 Business Overview The UK government has been driving the introduction of energy supplies that are secure, clean, affordable and alleviate the global climate change (Energy saving trust, 2014). Although in excess of 400 registered solar installation companies (Free Index, 2015), the average installation cost is still deemed exorbitant by many home owners. The recent drop in the prices of energy has further made the time for Return on Investment (ROI) even longer. Solar Photovoltaic (PV) systems are systems that take in solar energy and convert it to electric energy. The electricity produced is Direct Current (DC) which then flows through the cables to the Inverter. The inverter in turn converts the Direct Current into Alternating Current (AC) which is used for most home appliances. The unit of energy consumed is measured in Kilowatt-hour (kWh). Our company, Global Solar Systems (GSS), has come up with a cutting edge business model that presents an attraction for solar installations on residential homes. We use modern installation techniques, lean installation teams, generated tariff sharing scheme and bulk buying, making us the most preferred installer. We will order directly from the suppliers, cutting off the middle man, thereby passing the benefits to the customers. Customers will have first-hand experience of the benefits of solar energy for a year before owning the installation as their own. By focusing on developing high quality Monocrystalline solar panels (considered the high efficiency and expensive quality), we hope to be the market leaders of affordable solar installations. We will offer customers an option of 5 years maintenance contract to give them a peace of mind. Customers who sign up for an installation will participate in a generated power sharing scheme enjoying up to 50% discount on their power usage for a year. This does not only give them savings but also gives them an opportunity to experience the benefits of solar power.
  21. 21. MSc Thesis 2 1.2 Financial Overview We have forecasted to attain Gross revenues of £513.29 in the first year; £5,616,513.29 in the consequent years as shown in figure 1-1. This will have an initial planned investment of £3,696,082.17. We envisage that there will be an annual investment of £3,696,082.17 keeping a total of 104 installations every month. Figure ‎1-1: Annual income Vs Expenditure £(6,000,000) £(4,000,000) £(2,000,000) £- £2,000,000 £4,000,000 £6,000,000 £8,000,000 1 2 3 4 5 Amount Year Expenditure Vs Income Expenditure Income Net Income
  22. 22. MSc Thesis 3 1.3 Profit and Loss There will be a gross loss in the first year but this is expected as part of the business plan. This is clearly shown in figure 1-2 below. The benefit of hooking customers to our business far outweighs this loss. Figure ‎1-2: Annual Gross Profit 1.4 Vision Statement We trust that by providing superior installations while pricing our product comparatively, we can offer our customers an alternative to the current suppliers; a superior product at competitive price. By bulk buying, sharing the generation proceeds for a year and eliminating the middle man we are confident we can outprice our competitors. As we team up with green activists campaigning for clean energy that is matched by a great sales deal, we want to be reckoned as the best solar installation team. (£4,000,000.00) (£3,000,000.00) (£2,000,000.00) (£1,000,000.00) £0.00 £1,000,000.00 £2,000,000.00 £3,000,000.00 Year 1 Year 2 Year 3 Year 4 Year 5 Gross Profit Gross Profit
  23. 23. MSc Thesis 4 1.5 Business Objectives Our business objectives are to maintain a balance of profitability that is matched by quality products and services. We are under no illusion that the solar market is highly competitive and so we intend to differentiate our brand name and reclaim the solar market. 1.6 Short term We aim to establish a strong installations base and team in the first year, installing 104 homes in a month. This will be equal to installing 14,976 solar panels per year. 1.7 Medium term  Having established the business in year 1, we hope to continue to grow towards profitability and mastery of the industry.  Improve on lessons learnt from year 1  Look to being nominated best installer of the year  Establish our maintenance support to our customers 1.8 Long Term  We look to year 3 as the year of making a real profit and the beginning of many success years.  We look to expanding further in the country and working to penetrating the European market.  Establish marketing for solar spares. 1.9 Opportunities and Threats Opportunities  Our solar business model is new and unique on the market  More houses are being built in the target area creating potential market  The government incentives for green energy will encourage home owners to take up installations Threats  There are approximately 400 registered solar installation companies operating in England and Wales.  Product differentiation will be a challenge in the initial phases of the business  We need to make sure we deliver on superior quality and affordable price to our customers.
  24. 24. MSc Thesis 5 1.10 Exit Strategy Best case Every effort has been undertaken to make this business successful including plans to expand to Europe in the long term. In unlikely event that our customers (clients) default on paying for the installation after one year, we will sell it to our Financing partners. The financing partners will pay us the total amount and pass the costs to our customer as a loan on their terms and conditions. Worst Case If on the other hand, our Financing partners are unable to reach an agreement to sell the solar panel installation to our customers this will not result into a total failure. This will only result in reduced profitability. The customer will lose the discount they enjoyed in the first year and pay premium tariffs for the power they use from that time onwards until they buy the ownership of the installation. In this way, there cannot be a total loss arising from an installation.
  25. 25. MSc Thesis 6 Chapter 2 Business Summary [Abel Kimbinyi] 2.2 Business Details Global Solar Systems (GSS) will be based within Kent. With an already established website, customers can express their interest in solar installation by completing a form so that we can get back to them. The business model will involve engaging potential customers using various promotion media. 2.3 Key People General Manager Skills The General Manager will be a time served senior manager with over five years of experience in managing installation business. He/she will have the skill of managing people in a fast moving environment where time is critical. He/she will have the ability to work well under pressure with high skills to effectively manage tight deadlines. He/she will need to have passion for clean energy and have demonstrable skills of solar energy ambassador. Responsibilities Apart from managing the company, the General Manger will actively monitor the solar installation market to find areas where we need to improve. He /she will gather customer feedback to ensure that their experience is positive. He/she will actively seek to exhaust the local market before expanding outwards so as to keep the transport and logistics cost low in the initial stages. Installations Manager Skills
  26. 26. MSc Thesis 7 The installations Manager will be a person having a proven record in both managerial and technical skills to sufficiently support the General Manager. He/she will have good understanding of the technical side of solar energy and scaffolding. He will be a competent Surveyor and have detailed knowledge of installations. Responsibilities The Installations Manager will carry out all the surveying and client contracts with the help of the office Manager. Advisors The bank will offer business advice and financial direction. Sage (2015) have gladly offered to give advice on starting up a business. Finally, the Kent County Council (2015) will provide advice on growing a business for free. Designinc Type: Marketing and Advertising Design Incorporated (UK) Ltd Centurion House London Road Staines Middlesex TW18 4AX Tel: +44 (0)1784 410380 E: info@designinc.co.uk
  27. 27. MSc Thesis 8 Chapter 3 Organisation Structure [Mohammed, Adil Pasha] Global Solar Systems (GSS) will be a lean organisation structure as seen from figure 3-1. This section addresses the organisation structure, recruitment, personnel management, office resource, local logistics and operations. Sales promotions are covered in this section unlike in the marketing section. Lean Organisational Structure General Manager Office Manager Accounts Manager Installation Manager Team Leader Skilled Tech C Unskilled ASkilled Tech B Unskilled B Global Solar Systems X2 X2 X4 X4 Skilled Tech A Unskilled C X2 X4 Figure ‎3-1: Lean Organisational Structure Our organisation is composed of group of employees who work together to achieve the common goal. According to Robbins, et al (2013) an organisational structure defines how tasks in the organisation are categorised, grouped, organised and managed. Our organisational structure defines how all activities such as task allocation, coordination and supervision will be directed towards the achievement of organisational aims and objectives (Senior & Fleming, 2009). Robbins, et.al (2011) highlights six elements that are considered to be very important for an
  28. 28. MSc Thesis 9 organisational structure. These are work expertise, department, centralisation, chain of command, span of control and decentralisation. 3.2 Worker Expertise This is the first element that is very important for a successful organisational structure. Employees will be managed according to the organisational structure. An organisational structure is defined as the degree to which the works are categorised and assigned to different employees in the organisation. All our employees will be highly skilled and will come with vast experience. As these employees will be repeating the jobs on a daily basis they will soon become experts in it (Daft, 2009). In Global Solar Systems, individual team members will be assigned specific jobs, given a particular task to perform and provided with specific roles and responsibilities. 3.3 Departmentalisation Once the works are categorised and assigned to individual workers in an organisation, it is important to group these jobs based on the category so that it can be organised and coordinated. The basis of grouping these jobs is referred as departmentalisation (Mukherjee, 2009). In Global Solar Systems, the groups are categorised based on the department and what they will be doing. Installation teams will fall under Technical department and will be managed by the Installations manager. Then there will be other departments such as Accounts managed by the Accounts manager; and administration managed by the Office manager.
  29. 29. MSc Thesis 10 3.4 Span of Control This is defined as the number of team members or subordinates that an individual manager can direct and control effectively and efficiently (Aquinas, 2009). Figure ‎3-2: GSS Organisational Levels In GSS, there are four levels in the organisation; starting with the General Manager and ending with the Skilled and Unskilled technicians who will be installing the solar panels. At the top level of the organisation is the General Manager who controls and manages three different managers namely: Office manager, Installation manager and Accounts manager. These three managers constitute the second level of the organisation. The Installation manager is the only manager in level two who has a subordinate, Team leader, and the other managers have no one to give commands or instructions. Level 1 General Manager Level 2 Installation Manager Office Manager Account Manager Level 3 Team Leader Level 4 Skiled and Unskilled Techniciians
  30. 30. MSc Thesis 11 The Installation Team leader forms the third level of the organisation who manages 18 technicians. These technicians are classified as skilled and unskilled technicians. Chain of Command This is the line of authority that starts from the top level of organisation going down to the very bottom of the organisational hierarchy (Borrington & Stimpson, 2014). There are two major concepts that are related with the chain of command namely authority and unity of command (Combe, 2014). Authority is defined as the rights in a managerial position that provides the power to give orders to their subordinates. Unity of command is the concept of having one manager for the subordinates to report, this avoids confusion and problems associated in the employees (McShane, et al., 2011) particularly in technical organisations like GSS. In GSS, the control is mainly with the General Manager who resides in the top most of the organisational hierarchy. Installation manager, Office manager and Account manager directly report to the general manager. The team leader reports directly to the installation manager. A total of 18 technicians (6 skilled and 12 unskilled) will be reporting to the team leader. 3.5 Centralisation and decentralisation The term‎“centralisation”‎is‎defined‎as‎the‎degree‎to‎which‎the‎power‎of‎decision‎ making and control is resided at a particular point in the company (Robbins, et al., 2013). This concept is related to the formal authority and the power provided to an individual’s‎position. Basically in the centralisation type of organisation, the power and authority is provided to the top level management. The top level management makes the important decisions for the organisation where they take little or no inputs from the lower level of the organisation. This type of organisation is referred as “centralisation”.‎In‎the‎decentralisation type of organisation, there is a very large amount of input provided by the low level employees and plays an important role in the‎organisation’s‎decision‎making‎process (Mukherjee, 2009). GSS follows the centralization where the major power resides with the General Managers who makes the decisions for the organisations. Roles and Responsibilities
  31. 31. MSc Thesis 12 According to Davis, et al. (2007) well defined roles and responsibilities allow the employees to acquire responsibility and accountability towards their specific tasks and objectives. It is very important for the management to define the roles and responsibilities of the team members in order to ensure employees work effectively and efficiently. Clear job description and responsibilities for every individual employee in the organisation allows the employees to be focused, prioritise their work and also gives them ownership over specific tasks (Strande, et al., 2014). In this project, there are several employees involved with responsibility of performing different type of jobs that includes office management, direct marketing, installation, accounts management, digital marketing and promotions. The following are the different responsibilities associated with our solar panel business. Employee Roles and Responsibilities General Manager General Manager manages the overall operations of the organisation. The General Manager is responsible for the day to day activities of the company and ensures smooth functioning of all the operations associated with the company. Office Manager The office manager plays an important role as a website developer and Search Engine Optimisation (SEO) strategist. He is responsible for developing website which is mobile and web friendly. He is responsible for finalising the keywords and bringing‎the‎“website”‎to‎rank‎in‎the‎first‎page‎of‎the‎search‎engines‎that‎includes‎but‎ not limited to Google, Yahoo, Bing, and others search tools. Account Manager The account manager is responsible for managing the accounts of the customers, business income and expenses on the daily basis and also submitting monthly reports to the management. Installation Manager The installation manager manages the team leader of the installation team. He is responsible for all the installations at client places. Installation manager co-ordinate
  32. 32. MSc Thesis 13 and analyses the reports of the team leader; conducts critical review and report the same to the general manager. He may also be required to conduct site surveys on behalf of the organisation. Installation Team Leader The team leader leads the installation technicians who are skilled and unskilled. Team leader is also responsible for conducting the surveys at customer sites for solar panel installations. Team leader reports directly to the installation manager. Installation Technicians (Skilled) These skilled installation technicians are 6 in number. They tend to manage the installations along with the assistants on a daily basis. It is their responsibility to ensure the installations are properly completed and tested at the customer premises. Skilled Installation Technicians are also responsible for conducting the survey on the customer’s‎site‎for‎the‎installation‎of‎solar‎panels. Installation Team (Unskilled) These assistants carry out most of the installations and hands on workers. They help the skilled technicians and also can work independently with minimal supervision. The responsibility of these unskilled installation team members is to carry out all installations at the customer premises. 3.6 Recruitment According to (Balasubramanian, 2014) recruitment is an important process that plays a vital role in the success of the organisation. In the recruitment process, it is inevitable to analyse the job description so as to recruit the appropriate manpower. The success of recruitment lies in the effective understanding of the job and matching it with the skills of the candidate (Yeung, 2010). All the businesses require efficient‎manpower‎and‎human‎resources‎to‎achieve‎the‎organisation’s‎strategic‎ goals and objectives. It is inevitable for the organisation to recruit the right candidate for the right position in the company. Lange (2011) addresses the various recruitment practices for small and medium enterprises. For a start up like Global Solar Systems, employing the right persons might be the most important part of the
  33. 33. MSc Thesis 14 venture. An effective recruitment and selection process reduces turnover. These processes match up the right person with the right job skills. Many employers believe that recruitment can be too costly and time-consuming. A recent study by the British Chambers of Commerce and Maximus UK highlighted that 43% of businesses spend around £2,000 for hiring an employee. In our case, we are going to use the strategies that are free; but effective in terms of finding the right candidate for the position. GSS Recruitment Strategy GSS will only recruit already skilled workers so as to eliminate the cost of training staff. Global Solar Systems will utilise the online and social media as the recruitment tool to find the right candidates for the right positions in the organisation. 1. Use Company Website – Careers Using the company website, job titles with a clear job description will be made and be published in the career section. This website will be promoted on all the major social media website that includes Facebook, LinkedIn and other related websites. 2. Dedicated Social Media Pages Our company will have dedicated social media pages like FB page, LinkedIn Company Profile and also in twitter. Using these dedicated company pages, we will publish the recruitment information and post the job information. 3. Free online job advertisements There are several websites that allow posting the job advertisements for free. These websites will be identified and utilised for the job adverts.
  34. 34. MSc Thesis 15 3.7 Office Space Figure ‎3-3: Office to rent Our location has got a perfect office suit that was refurbished and has got 5 different rooms meeting our requirements (Rightmove, 2015). The key features in this office space are:  Suspended ceiling  Central heating  Carpets The most important facility with this office space is the 10 parking spaces. These spacious parking will be used for housing containers which will be used as warehouse for our solar panels and accessories. 3.8 Location This office space will be located in Lydden on the Canterbury Road. This space has a car parking facility which could easily be used for 6 cars (Rightmove, 2015). The table below highlights the two offices spaces that are found on Rightmove website addressing their space in square feet and the cost per annum.
  35. 35. MSc Thesis 16 Table ‎3-1: Office Location Cost Comparison Office Address Space Cost per Annum Pharos House Honeywood Road, Whitfield, Dover, CT16 3EH 3,385 sq. ft. £30,000 CANTERBURY ROAD, Lydden, CT15 1299 sq. ft. £12,500 From the above table, it is clear that although the first office location option in Dover is 3,385 sq. ft. is more expensive per sq. ft. compared to the second office location in Lydden. Figure ‎3-4: Office Location comparison For our company, the 1299 sq. ft. office space will be sufficient. As the facility has space for six cars, the parking will be used for housing the containers. 3,385 1299 30,000 12,500 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Dover Lydden Space Cost per Annum
  36. 36. MSc Thesis 17 Office Resources and Equipment In this office plan, we address the various costs involved in setting up the office such as: office rent, furniture and materials required to setup the office. Figure ‎3-5: Office Setup Layout Office Materials required: There following office materials required for the interior and make the office habitable:  1 Reception Table  1 Small Sofa  1 Small Table  Cafeteria Table Set (1 Table 4 Chairs)  5 Workstations  4 Office Desks  6 Office Chairs  1 Executive Desk  1 Executive Chair
  37. 37. MSc Thesis 18 3.9 Office Setup Costs Table 3-2 below shows the cost of setting up our office. Table ‎3-2: Office Setup Costs Items Quantity Cost/Item Total Cost (in Pounds) CPU & Monitor 5 £189 £945 Office Desk 4 £60 £240 Cafeteria (Table & Chairs) 1 £245 £245 Reception Table 1 £90 £90 Reception Sofa 1 £95 £95 GM Executive Table 1 £250 £250 Office Chairs 6 £35 £210 GM Executive Chair 1 £145 £145 Printer 1 £21.45 £21 Total Cost £2,241 3.10 Employee Costs GSS will pay competitive salaries in order to maintain the staff. The pay reflects the skills and experience required for each role. The general manager in collaboration with the Accounts manager will plan for these costs to ensure efficient labour force is maintained.
  38. 38. MSc Thesis 19 Table ‎3-3: Employee Costs Nos Staff Status Monthly Pay Annual Pay 1 General Manager Permanent £2,500.00 £30,000.00 1 Installation Manager Permanent £2,000.00 £24,000.00 1 Office Manager Permanent £1,800.00 £21,600.00 1 Accounts Manager Permanent £ 2,000.00 £24,000.00 1 Team Leader Permanent £1,850.00 £22,200.00 6 Skilled Labour Permanent £12,480.00 £149,760.00 12 Unskilled Labour Permanent £20,800.00 £249,600.00 Scaffolding £30/home £3,120.00 £37,440.00 Total Cost £ 46550 £ 558,600 Shift Rota Table 3-4 below shows how the teams are assigned for the different days of the shifts every week. Every team works for four days in a week on a rotational basis. Table ‎3-4: Shift Rota Monday Tuesday Wednesday Thursday Friday Saturday Sunday A1, A2 B1, B2 C1, C2 A1, A2 B1, B2 C1, C2 - B1, B2 C1, C2 A1, A2 B1, B2 C1, C2 A1, A2 - This table shows the working teams on a daily basis except Sundays when they have a rest day. A total of 4 different teams On Monday, teams A1, A2, B1, B2 will be working; on Tuesday, the team B1, B2, C1, C2 will be working; on Wednesday the teams C1, C2, A1, A2 will be working; on Thursday the teams A1, A2, B1, B2
  39. 39. MSc Thesis 20 will be working; on Friday, B1, B2, C1, C2 will be working; and finally on Saturday the teams C1, C2, A1, A2 will be working for the solar panel installation. The table 3-5 below shows how many members are in each team and number of working hours per member. Table ‎3-5: Team Schedule Teams A1,A2,B1,B2,C1,C2 Members in each team 3 (1 skilled, 2 unskilled) Total members of Installation 18 (6 teams) Total members working per day 12 (4 teams) Time taken per 1 installation (Total) 36 hrs Time taken per 1 shift per member 12 hrs Time each member works in 1 week 48 hrs (4 shifts) There are 18 installation technicians in GSS; out of these, 6 are technically skilled and 12 others are unskilled. From the above table, it is clear that 3 installation members will constitute each team (A1, A2, B1, B2, C1, and C2). Out of 3 installations team members 1 will be skilled and 2 members will be unskilled. Even though there are six teams of installation technicians, only four teams are utilised every day for the purpose of payments. This ensures that teams are only paid for the work done. Website Domain In recent years, the technological development and the boom in the internet has provided a great opportunity for the businesses all over the world to promote their brand over the internet. Small Medium Enterprises (SMEs) have a wide opportunity to utilise the internet and market their products more effectively. Websites are one of our one of our major marketing for this project. Our Domain Name is: www.gsolars.co.uk
  40. 40. MSc Thesis 21 Our mobile friendly website is designed and developed in such a way that it attracts new customers and provides a great opportunity for us to exploit the local market. Search Engine Optimization (SEO) is the technique that ensures the ranking of websites in Google and other major search engines for keywords and phrases of website searches. A good SEO strategy will help us to achieve good ranking for our business keywords searches. Google holds over 94% of search traffic in the UK. SEO will therefore help us to‎get‎good‎traffic‎to‎our‎company’s‎website. Some of the Keywords used for the SEO strategy are:  Solar Panel installation  Cheap and best Solar panel installations in Dover  Best Solar Panel installations in UK  Affordable solar panel installation 3.11 Recurring Expenses A Recurring Cost is a regularly occurring cost or estimated cost which is documented with one record and the following are our cost. Table ‎3-6: Recurring Expenses Recurring Expenses Cost/Month Cost/Year Telephone and Internet £25 £300 Employee Costs £46550 £558,600 Maintenance £100 £1,200 Miscellaneous £75 £900 Vehicle Fuel Costs £100 £1,200 Total Expenses £46850 £562,200 In GSS, there are 4 major recurring expenses such as the telephone and internet costs, employee costs, maintenance costs and miscellaneous costs. It is very important to forecast the expenses that will be recurring on a monthly basis, as it
  41. 41. MSc Thesis 22 would provide an understanding about the money required to run the business smoothly. From the above table, we can clearly see that employee costs constitute the major expense in the organisation. Employee costs are £46,550 for a month and it costs £558,600 for a year. The total expenses that will be recurring on a monthly basis are £46,850 making it £562,200 per year. 3.12 Non-Recurring Expenses A non-recurring item refers to an entry that appears on a company's financial statements that is unlikely to happen again. It represents a one- time expense involving an unpredictable event and is not part of a firm's normal, day- to-day operations. Table ‎3-7: Non-recurring Expenses Non-Recurring Expenses Cost/Month Cost/Year Advertising £150 £1,800 Emergency Costs £100 £1,200 Website Domain £4.99 Website Hosting £2.99 £35.88 Total Non-Recurring Expenses £252.99 £3,040.87 The above table provides a clear idea about the non-recurring expenses associated with GSS. These non-recurring expenses are the costs involved in advertising, emergency costs, buying website domain, and the hosting costs involved. Office Electricity Electricity is an important component that is inevitable for any business operations. GSS, being a solar panel Installation company, will be setting an example for others to adopt the energy concept. We will install solar panels on our premises so as to reduce the electricity bills. Installation Cost for a Solar Panel on our premises will cost us £2,500.00
  42. 42. MSc Thesis 23 It can be clearly seen from the table below that over five years the cost of installation is more economical. On average offices spend about £100.00 a month on electricity which makes £600.00 over a year. Table ‎3-8: Electricity Comparison Electricity 1 Month 1 Year 5 Years Electricity Cost £100.00 £1,200.00 £6,000.00 Solar Panel Cost One Time Installation: £2,500 The table above shows a clear advantage of using solar power on an office, particularly one that only conducts business during the day. From the table we can clearly see that it costs £100 per month through normal grid electricity supply. The table also shows the total cost per year and over 5 year. 3.13 Office Security Our equipment is kept in steel containers which must be kept secure all the times. This equipment is very expensive and there is a potential threat associated with keeping these solar it in the parking spaces. So it is very important to provide adequate security to monitor and protect this valuable solar panel equipment. To monitor and protect, GSS uses CCTV security system which is connected to the Installation‎and‎Account‎manages’‎mobile‎systems.‎The‎model‎we‎use‎is‎simple‎and‎ yet every effective, costing only £175.98.
  43. 43. MSc Thesis 24 Figure ‎3-6: CCTV Source: (do it yourself, 2015) 3.14 Advertising and Promotion This is very much essential for the survival and success of an organisation. This is an important part of the business strategy that allows the consumers to get attracted towards the products and services (O’Guinn,‎et‎al.,‎2011). There are four important elements associated with the promotions such as publicity, direct marketing, sales promo, and personal selling. Marketing plays a vital role behind the success of a business. It shows the way that a company adopts for positioning its products in the market. There are two major advertisement strategies: above the line advertising and below the line advertising. The former method utilises the mass media promotions such as television advertisements, press, celebrity endorsements, and film advertisements. The above the line advertising is very effective in attracting the customers as it reaches out to lot of people. This advertisement is comparatively expensive than the below line advertising. Using the below the line advertising, we will utilise various methods such as direct email campaigns, trade shows, coupons, referral programs and catalogues. This digital age has provided a great cutting edge for the small businesses to grow their business (Springer, 2009).
  44. 44. MSc Thesis 25 Direct Mail Marketing This is one of the most effective marketing methods where a professional mail will be directly sent to the target audience. This direct mail will address the services, features,‎and‎most‎importantly‎the‎“unique‎selling‎points”‎of‎our products and services. While we plan to use this method in the long run, GSS however will consider other options first. Door-to-Door Marketing This is a very prevalent below the line marketing methods where the trained marketing executives and sales representatives will visit the customer premises and explain about the product. In GSS, there will be direct executives who will sell the products‎based‎on‎the‎customer’s‎interest‎that‎comes‎through‎cold‎calling‎or‎through‎ website leads. The leads generated through the website or internet will be contacted over the phone and scheduled an appointment. The executives will meet the client and explain the benefits of installing GSS solar panel systems on their premises. Email Marketing In recent years, email marketing has reached its peak as majority of the people started using internet and viewing emails on a daily basis. There are several benefits associated with email marketing when compared to direct marketing (Arnold, 2011). A professional email has the ability to attract the target audience and helps to promote and build the brand (Ceylan, 2008). This is one of the important strategies that are used in GSS to target the local audience with their attractive email templates. The databases of the customers will be located through several means and a professionally made email template with soft copies of company brochures and other information will be sent to the leads. The email marketing allows the organisation to reach out to its target audience and tends to build branding and image among them. The email campaigns are effective when they are done periodically as it would allow the target customers get curious about the products and services.
  45. 45. MSc Thesis 26 SEO Marketing According to Charles & Usigbe (2013) SEO marketing strategies helps the companies to promote their businesses in a very safest and cheapest way. SEO marketing is considered to be one of the most effective marketing strategies in the business world. Search Engine Optimisation allows the organisations to promote the business over the internet by acquiring good ranking in the search engines (Ramos & Cota, 2008). For GSS, in terms of advertising and promotions, we will adopt below the line advertising strategy where we concentrate mainly on utilising the digital media for promotional activities. This starts with designing an interactive user friendly website to showcase our products and services. Secondly SEO will be used to promote the website with the intention of bring it on top of the search results. Social media marketing will also be adopted where a Facebook pages will be created and all the activities will be regularly updated. Local Logistics and Operations We will be using four Vans with ladder facilities to carry out the local logistics operations. They will mainly operate between our offices and customer premises. These specially equipped Vans will be loaded with the solar equipment at the office premises and move out to the customer premises for installation. The vehicles with will have automated lifts making installations quicker and efficient. Figure ‎3-7: Van with lift
  46. 46. MSc Thesis 27 Table ‎3-9: Transport Vehicles Name of the Vehicle Description Cost Citroen Berlingo Enterprise Van Make: Citroen Model: Berlingo enterprise Diesel, Mileage: 88,700 Condition: Well Maintained £1,450 Fiat Doblo Cargo diesel van Make Fiat Model Doblo Cargo Year 2008 Mileage 95000 Fuel type Diesel Transmission Manual Colour White Engine size 1910 £1,995.00 Berlingo 1.9 diesel with mot Make: Citroen Model: Berlingo Year: 2001 Fuel type Diesel Transmission Manual Colour White £500 Fiat Doblo Cargo Diesel Colour: White Year: 2003 Transmission: Manual £850 GSS requires four vans for their installation team members to go the client premises and install the solar panels at the roof top. The biggest advantage of these vans is they are fitted with the powered lifts that are operated with a remote control. This helps the installer to easily get to the roof top and while controlling the lift basket.
  47. 47. MSc Thesis 28 Table 4-2: Operational Fixed Assets Items Quantity Cost/Item Total Cost (in Pounds) Vans 4 Variable £4845 CPU & Monitor 5 £189 £945 Office Desk 4 £60 £240 Cafeteria (Table & Chairs) 1 £245 £245 Reception Table 1 £90 £90 Reception Sofa 1 £95 £95 GM Executive Table 1 £250 £250 Office Chairs 6 £35 £210 GM Executive Chair 1 £145 £145 Printer 1 £21.45 £21 TOTAL COSTS £7086 The table 4-2 represents the costs involved for the operational fixed assets associated with the organisation. The major fixed assets cost of GSS are the Vans that are bought for the purpose of carrying the solar panels and other materials to the installation sites. These vans will need to be kept in a good condition by having regular maintenance. In event of a van breakdown, our insurance will give us replacement vans according to the terms agreed
  48. 48. MSc Thesis 29 Chapter 4 Product and Systems Description [Britto Anand Vincent] Solar‎energy‎is‎obtained‎by‎the‎conversion‎of‎sun’s‎ray‎into‎electrical or thermal (heat) energy by means of Photovoltaic (PV) solar panels or using concentrated solar power. For the purpose of this project we concentrate only on solar conversion for electricity. PV Solar panel is a panel which is designed with semiconducting materials that manifest photovoltaic effect which take up sunlight as a source of energy to produce electricity. We are harnessing this characteristic for this project to produce electricity by installing PV solar panels on residential rooftops. While there may be many products that can achieve this, only few of them are suitable for residential purposes. 4.2 Circuit Overview Solar panels are made of a combination of solar PV cells. When sunlight strike silicon in solar PV cells, Direct Current (DC) electricity is created which flows from these solar arrays (panels connected together) through the cables. This current is then processed through various devices to produce useful power for home use. 4.3 Product Description The basic components required for the installation of solar panels are as follows:  Solar panels  Mounting‎equipment’s‎such‎as‎roof‎anchor,‎mounting‎frames‎and‎clamps.  DC –AC Inverters  DC Disconnect switches.  AC Disconnect switches.  Cables and wires.  Generation Meter 4.3.1 PV Solar Panels The photovoltaic system makes use of solar panels made up of solar cells to produce usable power. A solar cell is a semiconductor material which converts sunlight into electricity (www.chemistryexplained.com, 2015). Conversion is accomplished by absorbing light and ionizing crystal atoms, thereby creating free, negatively charged electrons and positively charged ions. The positively charged
  49. 49. MSc Thesis 30 ions are called holes and their movements constitute a current flow. By carefully arranging the combinations of these cells and their resulting magnitudes of current, different power outputs of solar panels can be achieved. Solar cells are commonly made from amorphous semiconductors, single crystals and crystalline (www.chemistryexplained.com, 2015). The three basic types of PV solar panels are:  Monocrystalline.  Polycrystalline.  Thin film  Hybrid. Monocrystalline Solar Panels: The solar cell is made of single crystalline silicon. The whole cell is aligned in one direction, which implies that when the sunlight falls at a correct angle they would achieve a great degree of effectiveness. They have uniform black shading making them good light absorbers (c-changes, 2015). Figure ‎4-1: Monocrystalline Panel Source: (MidSouth building supply, 2008)
  50. 50. MSc Thesis 31 Advantages:  They are made of high grade silicon hence the efficiency is high.  They occupy less area on the roof, for the same power output compared to other types (imformative, 2015).  They have a long life span compared to other types. Disadvantages:  They are relatively expensive.  There is a high risk of circuit breakdown of the panels due to snow, dirt or shade.  At high temperature performance the panels is affected, but less so than polycrystalline solar panels (imformative, 2015). Polycrystalline Solar Panel The Polycrystalline, also known as multicrystalline, is made of cells that are effectively a slice cut from a block of silicon, consisting of a large number of crystals (www.solar-facts.com, 2015). All crystals are neither perfectly aligned nor tightly packed resulting in the panel being less efficient. Figure ‎4-2: Polycrystalline Panel Source: (MidSouth building supply, 2008)
  51. 51. MSc Thesis 32 Advantages:  They are less expensive.  At high temperature the technical performance is slightly less than monocrystalline; however it is a minor effect (imformative, 2015). Disadvantages:  They are less efficient when compare to monocrystalline.  They are less space efficiency. They occupy more space on the roof. Thin film: Thin film is manufacture by single or several thin layer of photovoltaic material onto a substrate. The different type of thin film solar cells (imformative, 2015) are classified based on which photovoltaic material is deposited to a substrate. They are  Amorphous silicon (a-Si)  Cadmium telluride (CdTe)  Copper indium gallium selenide (CIS/CIGS)  Organic photovoltaic cells (OPC) Figure ‎4-3: Thin Film Panel Source: (Canata Energy, 2011)
  52. 52. MSc Thesis 33 Advantage:  It is cheaper than crystalline solar cells.  The performance is not affected by shading and high temperature.  Appearance makes them appealing. Disadvantage:  The cost of installing them on roof is high since they are low space efficiency.  Life time of thin film solar cell is less when compared to crystalline solar cells. Hybrid Solar Panels: A hybrid solar panel is made up of crystal silicon layer in which thin layers of intrinsic and doped amorphous hydrogenated silicon are deposited ( ECOexperts, 2015). In other words it is the combination of monocrystalline and layer of amorphous. The efficiency of the panel is quite impressive since it works well even in low sunlight conditions (c-changes, 2015). Advantage:  High efficiency.  Requires less space.  Works in low light conditions. Disadvantage:  When compare to crystalline panels they are too much expensive and it is not worth unless you have a limited roof space (c-changes, 2015).
  53. 53. MSc Thesis 34 Comparison of PV Solar Panels: The comparison is made only between the commonly used solar panels for residential purposes. Table ‎4-1: Comparison between Monocrystalline, Polycrystalline and Thin Film Source: (The energy informative, 2013) Based on the comparison it is clear that monocrystalline panels are most effective. The cost of the panel is high but the power output by monocrystalline panels will be more when compared to other panel due to high efficiency. Moreover the space occupied by monocrystalline on the roof is less which reduces the complexity of installing the panels on the roof. Hence we agree to choose monocrystalline panel for installing the panels on the roof. Monocrystalline Polycrystalline Thin film Module Efficiency 15-20% 13-16% 6-8% Cell efficiency 25% 20.4% 13.4% Area req. for 1kwp 6-9m^2 8-9m^2 13-20m^2 Length of warranty 25years 25years 10-25years Cost high Less when compared to monocrystalline less Temperature resistance high Low Tolerates extreme heat
  54. 54. MSc Thesis 35 Mounting Equipment: Since we are focusing on domestic installation of PV (photovoltaic ) panels, the most common way for mounting them is by using roof anchors , aluminium mounting frames and clamps (The Renewable energy hub, 2015). 4.3.2 Roof Anchors: They are the base for the mounting system which are screwed into the rafter. They are made up of stainless steel. The shape of roof anchor varies depending upon the roof tiles such as concrete tiles, slates and rosemary. Figure ‎4-4: Roof Anchors Source: (SES, 2015)
  55. 55. MSc Thesis 36 Mounting Frames: The mounting frames are firmly attached to the roof anchor in order to prevent displacement. It is made up of two parallel aluminium bars. The solar panels are mounted over the frame and attached by clamps (EVOENERGY, 2015). Figure ‎4-5: Mounting Frames Source: (SES, 2015) Clamps: Clamps are the one which holds the solar panel onto the frame. There are two types of clamps:  End Clamps  Mid Clamps The End Clamps are fixed at the end row of the panels while the middle fits between two panels and they are equally spaced usually 200m apart. At least four clamps must be used per panel (EVOENERGY, 2015).
  56. 56. MSc Thesis 37 Figure ‎4-6: Mid Clamp and End Clamp Source: (Shed project, 2015) 4.3.3 DC-AC Inverters: The DC-AC Inverters convert direct current (DC) from the solar arrays to alternating current which can be used in your home and exported back to grid (Energy saving trust, 2014). It ensures to disconnect if there is a power drop. According to Solar Energy for Homes (2014), there are three different types of solar inverters used for different solar systems, although each of them still convert DC to AC. They are:  Stand-Alone Inverters  Dual Inverters  Grid Tie Inverters Stand-Alone Inverters: The off-grid solar array makes use of stand-alone inverters. In an off-grid solar system there is a rechargeable battery which stores the direct current from the solar array. The direct current is sent to the stand-alone inverter from the battery when it is necessary and then converted into alternating current (solar energy for homes, 2014). Dual Inverters: Dual Inverters are commonly known as backup battery inverters (solar energy for homes, 2014). They are widely used in multi-functioning solar systems. The generated power is first stored in the battery. The function of dual inverters is to get power from batteries and deal with the energy charge it got from the battery through the on-board available charge controller and supplies the surplus power to your utility
  57. 57. MSc Thesis 38 grid (do it yourself, 2015). In an event of power outage, they are able to supply alternating current to any specific area when required. Also, they are usually expensive because of battery usage. Grid-Tie Inverters: The Grid-Tie Inverters are less expensive than the other two types of inverters, and this is because the system does not require batteries. In this solar system the power output is directly sent to inverter where the conversion of DC to AC takes place (solar energy for homes, 2014). This AC electricity is used to power the home appliances and the excess electricity is fed into the grid. Since the aim of our project is to produce electricity to households and to sell the excess electricity to the grid; we are focusing on the grid-tie inverters for the purpose of our project because they slightly vary from other inverters because the AC pure sine wave signal that coordinated with the waveform from the grid has to be adequate (Greenage, 2015). The Grid-Tie Inverters (Energy matters, 2015) are classified as:  String Inverter  Micro Inverter  Central Inverter String Inverter: String Inverters are the most commonly used in residential solar power systems (Energy matters, 2015). They can be linked to a number of photovoltaic solar panels. When the solar panels operate at same conditions and have same characteristics the efficiency of the string inverter is higher (Energy saving trust, 2014). More than one string inverter can be used depending upon the size of installation. They are installed at some distance from the PV Solar Panels.
  58. 58. MSc Thesis 39 Figure ‎4-7: String Inverter System Source: (The Energysage, 2015) Advantage:  It as a highly flexible design.  Cost is less.  Installation cost is less because of simple wiring (Greenage, 2015).  The efficiency is high. Disadvantage  When any one panel in the string is failed, the overall performance of the inverter is affected.  The life span is less when compared to micro inverters.  No panel level MPPT (Energy matters, 2015). Micro Inverter: They are small box which are connected close to each panels or at the back of the panels which converts the DC power produced by a single solar panel to an AC power (Energy matters, 2015). It includes MPPT (Maximum Power Point Tracking) which is the principle of taking out the maximum power available from the solar
  59. 59. MSc Thesis 40 module, which helps to increase the electrical output produced by the photovoltaic system (Greenage, 2015). Figure ‎4-8: Microinverters System Source: (The Energysage, 2015) Advantage:  Reliability of the inverter is high, which means even if one micro inverter fails it will not affect the whole system.  System design is simpler.  Modules with different characteristics can be used  Efficiency is high.  Longer life span. Disadvantage:  It is twice the cost when compared to string inverters.  It has limited number of manufactures since it is a new technology.  Potentially expensive to replace.  Based on the positioning some micro inverters produce extreme heat (Energy matters, 2015).  Maintenance cost is high. Central Inverter: Central inverters are basically large string inverters. They are used generally in large scale such as in industrial buildings or field installations (Energy matters, 2015).
  60. 60. MSc Thesis 41 Advantage:  Efficiency is high.  Low capital price per watt (Energy matters, 2015). Disadvantage:  Produce much noise.  It occupies huge space.  When a single panel is affected, the entire system fails. Table ‎4-2: Comparison between Grid-Tie Inverters String Inverter Micro Inverter Central Inverter Power Up to 100 KWp Module power range Above 100 KWp Efficiency 98% 90-95% 98.5% Cost cheap expensive Expensive when compared to String Inverter Warranty 5 years More than 5 years(some manufacture offers 25 years) 5 years Size small Small compared to String Inverter large Source: (Evo Energy, 2015) Among the three, String Inverters are the mostly used in installation of residential solar system globally and‎comprising‎a‎great‎number‎of‎the‎world’s‎inverter‎market (Energysage.com, 2015). And they are cost effective when compared to others. There is a large number of companies worldwide that manufacture String Inverters (Energysage.com, 2015), which is more when compared to Micro Inverters. Hence we agreed to choose String Inverters for installations.
  61. 61. MSc Thesis 42 4.3.4 Disconnect Switches: It is important to have Disconnect switches while installing PV solar systems in dwellings in order to turn off the system for safety reasons. They are classified into:  DC Isolator  AC Isolator DC Isolators: The DC Isolators are used in between high voltage PV arrays and the inverters in order to disconnect the current flow from PV array to the inverter for safety measures (Free green electricity, 2010). Figure ‎4-9: DC Isolator Source: (Sunshine solar, 2015) AC Isolators: AC Isolators act as an interface which disconnects the PV solar system from the building electricity supply (Free green electricity, 2010). These are provided for manual disconnect of AC supply from the inverter. It has critical importance in solar installation to ensure safety during emergency.
  62. 62. MSc Thesis 43 Figure ‎4-10: AC Isolator Source: (Sunshine solar, 2015) 4.3.5 Cables and Wires: The wire types used in the installation of solar panels varies based on the conductor material and the insulation. Conductor: Aluminium and Copper are the most common conductors used in residential installation of solar PV systems. The conductivity of Copper is greater than Aluminium hence the flow of current in a Copper wire is greater when compared to Aluminium at same size (CIVICsolar, 2015). Though Aluminium is less expensive than Copper, it is not ideal for house wiring as they get weakened during installation while bending (CIVICsolar, 2015). Insulation: Insulation is a wire covering which protects the wire from moisture, UV lights, heat or chemicals. According to CIVICsolar (2015), they are classified into the following:  THHN which is used in dry places and indoor locations.  THW, THWN and TW are used indoor locations or in wet outdoor applications in conduit.  UF and USE suits for underground applications or in moist places.  PV Wire, USE-2 and RHW-2 cables have resistance to sunlight and moisture which allows them to be used outdoors and wet conditions. It is coded with colours to designate its functions which are essential during troubleshooting or repair (CIVICsolar, 2015). (Refer appendix D-2)
  63. 63. MSc Thesis 44 The gauge size of the wires can be determined from flow of current through the wire. The gauge sizes for different current as suggested by Solaratlas (2007) are listed in the table 4-3 below: Table ‎4-3: Wire Gauage Size Source: (Solaratlas, 2007)
  64. 64. MSc Thesis 45 4.4 System Design: 4.4.1 PV Solar System: The PV Solar System can be designed in order to produce DC to AC power service which is either interconnected with the utility grid or connected to an energy storage system (florida solar energy centre, 2014). The photovoltaic solar system is classified based on the operational requirements and the connections made to the power source. They are classified as (florida solar energy centre, 2014):  Stand Alone  Grid-Tie Stand- Alone System: A stand-alone solar system is independent of utility grid and stores the power in a rechargeable battery which produces the electricity when the solar panels are not operating i.e. during night time (inbalance-energy, 2015) . In this type of system the DC power from the solar PV array is stored in the rechargeable battery and the required power is drawn from the battery converted into AC power by an inverter which is utilised by the household. Figure ‎4-11: Stand Alone system Source: (ACE technologies , 2015)
  65. 65. MSc Thesis 46 Grid-Tie System: The Grid-Tie PV Solar System is designed in a way that it is interconnected with the utility grid. There is no need for batteries in this system. The primary component of the system is a Grid-Tie Inverter which gives AC power in quality required by the utility grid. When the utility meter is not energized, the power supply to the grid automatically stops. It has a bi-directional interface between the utility network and the PV system AC circuits. This makes the AC power from the PV array to either supply to the households or feed back to the grid when the system output power is greater than the household demand. At night when the solar output is less, the power required for household is drawn from the grid (florida solar energy centre, 2014). Figure ‎4-12: Grid-Tie System Source: (Xenogyre, 2013) Our project is based on grid-tie solar system since we intend to sell the excess electricity to the grid. On choosing Grid-Tie Solar System, we able to produce electricity to the households and then sell any excess electricity to the grid.
  66. 66. MSc Thesis 47 4.4.2 Size of the System: Typical residential solar panels can produce up to 3,400KWh of electricity annually (The ECOexperts, 2015). The residential PV solar system tends to range from 1KW to 5KW in size. The amount of electricity generated by different sizes of systems as suggested by The ECOExperts (2015) is tabulated below: Table ‎4-4: System Size and Annual Output Total System Size Annual Output Estimated Cost 1 KW 850KWh £3k-£4k 2KW 1,700KWh £4k-£5k 3KW 2,550KWh £5k-£6k 4KW 3,400KWh £6k-£8k Source: (The ECOexperts, 2015)
  67. 67. MSc Thesis 48 Figure ‎4-13: Electricity Consumption Source: (Shrink that foot print, 2015) From Fig. 4:13, it is clear that the average consumption of electricity by a household in the UK is 4,648KWh per annum. The average electricity consumption of small, medium and large houses in the UK as given by UKpower (2015) is listed below:  For a small house the annual usage is estimated to 2,000KWh.  For a medium house the annual usage is estimated to 3,100KWh.  For a large house the annual usage is estimated to 4,600KWh. The size of the system varies depending upon the amount of energy required. A basic 4KW system can generate enough electricity for a medium house, whereas a 2KW or 3KW system can generate the required electricity for a small house. A typical 4KW solar system has the capacity to generate 3,400KWh electricity per year.
  68. 68. MSc Thesis 49 Based on the specification of the panel we buy (refer appendix D-3), the capacity of the solar power system we install for a medium house is 3.6 KW. A system consists of 12 panels which are 300W each. 4.4.3 Inverter and String Sizing After determining the size of the system, it is important to identify the size of the inverter. Inverters are commonly identified based on the output in Watts (W). But also, we have to consider the amount of power that the inverter can receive. Selecting an inverter is roughly based on identifying inverter capacity matching your module production. Normally inverter with higher wattage than the system wattage is chosen. In our case for a medium house with 3.6KW system, we are choosing inverter with 4380 output wattage (refer appendix D-3). We can also choose the inverter with 25% less wattage than the system wattage, but as we are a grid connect system we need to use the inverter with input rating more than the PV array for safe and efficient operation (Leonics, 2013). The efficiency of the inverter mentioned in the specification (refer appendix D-3) is 97% which means 3% of electricity from the array is lost due to heat. Figure ‎4-14: String Inverter Source: (The Solar professional, 2015) After sorting out the wattage match between the inverter and the PV Array, another important factor is identifying the amount of panels wired in series. This is known as string sizing. String sizing helps us to determine the circuit voltage. A string is designed by connecting the panels in series (i.e.) connecting the negative lead of
  69. 69. MSc Thesis 50 one panel to the positive lead of the next panel and the negative lead of that panel is connected to the positive lead of the next panel. Figure ‎4-15: Single Series String Source: (The Solar planner, 2014) Figure 4:15 shows how the panels are connected in series. For instance, assuming these four modules have 30V each, which results in a 120V circuit and the current which flows through the circuit is the same. For a residential PV Grid-Tie System , the common system used is made of 2 to 4 strings which contain 7 to 12 panels each (The Solar planner, 2014). Each string is connected in parallel to the next string (i.e.) the positive lead of each string is connected to the positive lead of the next string and the negative lead of each string is connected to the negative lead of next string.

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