B-Plan for Sunair Power

Abstract

In a developing country like India, the availability of power to the most remote locations of the nation still remains a distant dream. Presently more than 56 % of the rural households do not have access to electricity and this proves to be a critical factor in preventing them from taking up various means to supplement their existing income from agriculture. In such a situation the focus is slowly shifting from the government initiatives to extend the reach of the central power grid to far flung locations to alternative solutions which could be more useful to provide electricity to such far flung locations. Various options are being explored with the mo t favoured ones being the usage of technology to exploit renewable forms of energy thus resulting in an environment friendly method to produce electricity. Of these, solar power is currently being harnessed to a great extent, while wind energy despite there being a lot of potential is still left untapped. Given the economics of existing Horizontal Axis Wind turbines which can operate only at sufficiently high wind speeds ( around 12 m/sec), the Vertical Axis Wind turbines which besides having the ability to operate at low speeds has numerous other advantages could be a useful tool which can be looked upon. In addition, the abundant availability of sunlight makes solar energy a viable option to explore for a hybrid source of generating power. Sunair Power Private Limited produces Micro-Hybrid Generators which can generate power at the ratings 800W, 1500W, 3000W and 5000W. The objective of the organization is to provide electricity to off-grid locations for their basic needs. In order to arrive at a feasible price where the customer can see the value that the product proposes we have weighed it against existing alternatives such as diesel genset and grid for the different ratings and priced the various units accordingly. Since the government is currently extending a subsidy to such hybrid power units, the investment involved for each customer goes down considerably. But, at the same time we have performed a sensitivity analysis to the subsidy structure to gauge the dependence on the same and its impact on our margins once any changes are implemented. We have also explored the option of establishing a dealer network to assist the organization in increasing its reach and estimated the ideal margins that would have to be given to each dealer and the cost savings that result through the usage of a dealer network. A detailed list of possible target customers including government offices, entrepreneurial firms, urban corporates with the intention of going green and energy efficient home builders and means to build a good network to enhance sales have also been described in this plan. In order to understand the benefits of different business models, primary research was done through interviews with industry experts and their views have been detailed as a part of the plan. The possibility of involving corporates through their CSR initiatives remains an interesting proposition to be explored. Eventually, we have also projected the financial expectations for the firm over the next 5 years based on a said set of assumptions and for a restricted market. Possible risks for the business have also been highlighted.