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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Residential Solar System Business Analysis
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
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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)
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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)
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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)
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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).
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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
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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)
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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).
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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. 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.
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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
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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).
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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.
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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.
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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)
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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)
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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)
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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.
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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)
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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.
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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. 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.