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Contents Executive Summary ................................................................................................................................................. 3
Characteristics of photovoltaics ............................................................................................................................. 4
Advantages that PV systems provide ................................................................................................................. 4
Possible locations that a PV system can be installed ......................................................................................... 4
Factors that determine the cost of the PV system ................................................................................................. 5
/kW (installed kilo Watt) and has to do with: ................................... 5
What are the factors that affect the performance of a PV system. ................................................................... 6
Licenses that are needed in order to operate a PV system ................................................................................ 7
Criteria that RAE (Regulatory Authority of Energy) uses to evaluate application forms ................................... 8
Factors that are needed in order to be connected to the power supply network ............................................ 8
Price that the power is sold ................................................................................................................................ 9
Funding opportunities for PV systems ................................................................................................................ 9
Factors justifying that the investment in PV systems is a guaranteed investment .......................................... 10
The steps that an investor must follow before money is invested on PV systems .......................................... 11
Technical Analysis of the Park ............................................................................................................................... 12
How a PV system works: ................................................................................................................................... 12
A typical PV system connected to the network consists of the following subsystems: ................................... 13
Constructors with the biggest PV panel production ......................................................................................... 14
Factors that determine the appropriateness of a plot ..................................................................................... 15
Ability to connect with the network of DEH ..................................................................................................... 15
Factors that determine the unproblematic licensing procedure by the authorities ....................................... 15
Solar Energy Production Park in Larisa ................................................................................................................. 16
Location ............................................................................................................................................................. 16
Personnel and Processes .................................................................................................................................. 18
Operation License ............................................................................................................................................. 18
Set-‐up costs ....................................................................................................................................................... 19
Financial Plan ........................................................................................................................................................ 20
Investment Law Funding ................................................................................................................................... 20
Bank Loan Funding ............................................................................................................................................ 21
................................................................................................................................................. 21
Financial Data .................................................................................................................................................... 21
Assumptions: ..................................................................................................................................................... 21
Appendix PV examples:......................................................................................................................................... 24
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Executive Summary This business plan is associated with the development of a photovoltaic park in the prefecture of Larisa. The
purpose of the park will be to produce electric power via photovoltaic panels which is going to be sold
law with a guaranteed premium
price. Alternatively the contract can be further expanded after the period is over.
The photovoltaic park will be established in an owned area of 5,000 m2 within the prefecture of Larisa and
linked with the network at minimum cost.
There is no competition for the project to face. According to the EU directive Greece is forced to grow its
power contribution of solar energy to 500MW-‐700MW until 2020 and all the energy that will be produced has
to be bought by DEH. Up to this day Greece produces only 5.8 MW via photovoltaic panels (KAPE 2007).
The owners will be two: Karatasios Dimitrios and Panagiotidis Athanasios and the formation will be
partnership.
The capital structure of the new start up is summed up in the following table:
Capital Structure Euros Percentage (%) Funding 300,000 50% Bank Loan 150,000 25% Investors Capital 150,000 25% Total Set Up Costs 600,000 100%
This business falls in the category of Renewable Energy Sources (RES) providers and is thus funded by the
Investment Law by a 50% since it will be located in the Larisa Prefecture, Thessaly and is a small sized
company. The company is also going to be funded by Piraeus Bank with 150,000 Euro (Piraeus Green Banking
Products), which corresponds to a 25% of the total investment. Finally, the two owners will contribute with
75,000 Euro each (25%) in this project.
This particular investment is a very safe one since everything can be forecasted and planned very precisely
according to the data that will be presented. The according to the financial analysis
and the breakeven point for the invested money will be in years 5 to 6. Furthermore it is an investment that
according to solid facts needs minimum attendance.
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Characteristics of photovoltaics
Advantages that PV systems provide
High and guaranteed performance
Free electricity provided by the sun
Quiet
No pollution to the environment
Can work without an operator
Can be installed on isolated areas
Can work and cooperate with other power systems such as wind generators
Can work under any weather condition.
No maintenance costs (practically very low costs)
Long life cycle (>30 years)
Expandable and can store the produced amount of energy.
Possible locations that a PV system can be installed
On building roofs
In every open space that has fence
In parking areas (as roofs)
As building materials in new buildings
In parks, stadiums, squares etc as architectural interventions
The panels have a surface of approximately 10m2-‐20m2 for every kW depending on the technology used.
Furthermore, extra space must be taken under consideration in order to avoid shadowing, ease of
maintenance etc. A typical 100kW photovoltaic installation ranges between 2,000m2 -‐ 3,000m2.
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Factors that determine the cost of the PV system
The cost of a PV system is calculated /kW (installed kilo Watt) and has to do with:
The technology of the panels that are going to be used
The origin of the panels and the rest of the equipment (EU systems are typically more expensive but
are better performers and more reliable than the Chinese ones.)
The size of the PV system
The ease of installation
The morphology of the area that the PV system is going to be installed
The distance of the system from the power network
The cost of the PV systems which are available on the market these days ranges between 5,500 up to 7,500
per kW installed for fully automated systems with mono-‐crystallic or poly-‐crystallic modules, sun tracker,
security fence and ground preparation. A typical system costs approximately 6,000 per installed kW.
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What are the factors that affect the performance of a PV system.
The climate of the region (the lesser the days that are shiny the lesser is the performance)
The geographical latitude of the region (region that are in the southern and eastern Greece provide
better conditions)
The angle of the panels (the best solution is southern orientation and a 30o angle from the ground)
The age of the PV systems (the efficiency drops 0.5% per year for the first 10 years and 1% every year
for the rest 10 years)
The technology that is used (sun tracking systems can increase the performance up to 35%)
The proper maintenance of the system
What actually matters is how many kWh/year the system is going to produce and at what cost is it going to
produce them. The production of electricity from a PV system can be forecasted with safety. In Greece we
can safely assume that a PV system of mono-‐crystallic or poly-‐crystallic modules will produce between 1,200-‐
1,500 kWh/year/kW. In Greece the best performing geographical areas are those of southeastern Greece.
According to www.helapco.gr the relevant performance of a PV system according to ground angle and
orientation:
Orientation Angle from the ground 0o 30o 90o
Eastern-‐Western 90% 85% 50% Southeastern-‐Southwestern 90% 95% 60% Southern 90% 100% 60% Northeastern-‐Northwestern 90% 67% 30% Northern 90% 60% 20%
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Licenses that are needed in order to operate a PV system
For installations greater than 150kW there is need for license of operation, installation and power
production. For the production license RAE is responsible and research for environmental
consequences and authorization of environmental conditions is needed. What is more a detailed
techno-‐economical analysis is mandatory. The procedure can take up to 7 months. The production
license lasts for 25 years with an option for another 25 years. After the production license
environmental condition authorization is obligatory as well. The installation license according to
legislation 3468/06 will be given by the general secretary of the region after 15 days of the application.
For locations that are included in protected areas such as Ramsar, Natura 2000 etc the license is given
by the Minister of Development himself within a month. For the time being the installation license is
given by the Ministry of Development. Finally the operation license is provided by the same institution.
The license lasts 20 years with an option of another 20 years.
For installations between 20kW-‐150kW, which the present business plan refers to, there is no need for
production, installation or operation license. But in this case there is a need for license of exception by
RAE as well as a research for environmental consequences and authorization of environmental
conditions.
For installations up to 20kW there is no need for any kind of license. The only thing needed is a briefing
to DEH about the technology that is going to be used, the position and the power output.
In all cases though, the investor should be careful about current legislation depending on the territory and
the kind of the investment. These could be static survey for PV systems on rooftops and license from the
urban planning office about the feasibility to connect to DEH s network.
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Criteria that RAE (Regulatory Authority of Energy) uses to evaluate application forms
National security
Public safety and health
The safety of the installation itself
The power performance and the viability of the project
The maturity of the project in order to determine how fast it can be implemented
The guarantee to the right of use for the particular location
The potential of the applicant to complete the project according to his economical, scientific and
technical skills.
The guarantee of common wealth services and customer protection
Environmental protection according to Ministry of Environment
Factors that are needed in order to be connected to the power supply network The producer must inform DEH about the location and the technical specifications of the system. DEH
prepares a research for an optimum technically and financially solution, unless there are certain problems in
order to discontinue the research and deny the application for connection. At a period of 1 year the most the
producer signs a contract to be linked with the network and in 3 months the most fills an application for the
construction of the link and pays the cost. The link can only occur if all of the prerequisites (applications,
contract and conditions of sale with DESMHE and urban planning service) are settled.
For stations up to 100kW (our case) the connection is with low voltage and the cost is approximately
4,000 if the system is located next to a low voltage substation or network.
For stations with power output greater than 100kW the connection is on mid voltage network and
costs 15,000. The license is given by the main offices of DEH located in Athens.
For stations with power output greater than 150kW, for the time being the license is given by DEH but
this will change soon to Ministry of Development.
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Price that the power is sold
PV system power Continental Network Not connected islands
100kW 0.45/kWh 0.5/kWh
>100 kW 0.40/kWh 0.45/kWh
The aforementioned prices have been voted in the new developmental law 3468/06 and can be re-‐evaluated
e
CPI. So there is no problem for a decrease in the invoices guaranteed.
Funding opportunities for PV systems
According to investment law 3468/06, investments on energy production from RES are funded with 20%-‐40%.
These percentages for each region are the following:
Funds per Location % of Funding Zone A: Attica-‐Thessaloniki (not including islands and industrial areas)
20
Zone B: Central Macedonia, Western Macedonia, Thessaly, Crete, Ionian Islands, Sterea Ellada, Southern Aegean Islands
30
Zone C: Western Greece, Eastern Macedonia, Thrace, Epirus, Peloponnesus, Northern Aegean Islands
40
An extra 10% for each region can be added for medium sized companies and 20% for small sized companies. A
medium sized company has revenues less than 50,000,000 and personnel less than 250 persons. A small
sized company has revenues less than 10,000,000 and employs less than 50 people.
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Factors justifying that the investment in PV systems is a guaranteed investment
The PV panels that are the most expensive part of a system usually ship with a 10-‐25 years warranty
The inverters ship with a 10 year warranty
Big Greek companies that operate in the market guarantee that the system will work flawlessly for 2
years and offer long-‐term contracts of maintenance combined with report systems of the installation
and statistical analysis tools that can diagnose every problem in a particular part of the system thus
having ultra fast repair.
The annual maintenance cost ranges between 0.3%-‐0.6% of the system cost and entails fast re-‐
establishment of every flaw and optimum operation of the unit.
The rest of the maintenance and operational cost of the unit is practically zero. The only need is to
rinse them with water, if needed, to avoid having dust in the panels and to make sure that the space
around them will not create any problems of shadows.
Other potential threats such as vandalism, earthquake, fire, thievery etc. can be covered from the
insurance policy. The refund can cover payment of the damage up to refund for losses because of
decreased performance. The typical cost for an insurance contract is 0.25%-‐0.5% of the unit cost
depending on the contract.
Judging from the facts it is easy to understand that with stable and forecasted cost for a 20 year period,
with a forecasted performance as well as predetermined power selling price investing on PVs is a
guaranteed investment.
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The steps that an investor must follow before money is invested on PV systems
The evaluation of the plot(s) or building(s) that the PVs are going to be installed.
Company formation and then a buy-‐rent-‐cession of the plot or building to the company.
Determination of the best available PV solution according to the plot and available capital in order to
start the specifications research.
Collection and analysis of the offers provided.
Filling and sending the application for production license.
Application to DEH to conclude about connection terms for systems between 20kW and 150kW.
Installation license for systems larger than 150kW.
Filling and sending a research of environmental approval and evaluation for systems between 20kW-‐
150kW.
Contract with DEH to connect to the network.
Contract for selling the power with DESMIE.
Business plan in order to be funded by investment law.
Contract with the suppliers of the equipment to start the project.
Operation license for systems larger than 150kW.
Progress and completion reports in order to get the full funding from the investment law.
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Technical Analysis of the Park
How a PV system works: The operation of a PV system is based upon the photovoltaic phenomenon, meaning the production of
electrical power directly from solar radiation. The power production happens with the use of appropriate
materials (semi-‐conductors), which have the ability to absorb photons and release electrons (photoelectric
phenomenon). This flow of free electrons causes electrical current.
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A typical PV system connected to the network consists of the following subsystems:
PV panels (generators)
Support frame
Inverter (the system that transforms the power)
Electronic Control Systems, Security Systems, etc.
PV panels The PV panels usually consist of PV elements sealed in special transparent material. The front of the panel is
well protected by special very durable glass with low contents of iron-‐oxide. This construction that has a width
of 4mm 5mm is being placed on an aluminum frame like the glasses in the buildings. The PV elements in the
panels are connected in a row or in parallel depending on the use and the application that is needed.
Support frame The PV panels in order to be well supported and installed to the location that is chosen, are equipped with
special constructions. This support frames have to meet certain criteria like being able to withstand loads that
come from the panels and the winds, not to create shadows to the panels, allowing the panels to be physically
accessed but in the same time to ensure their security.
Inverters The PV panels produce Direct Current (DC) but the network consumes Alternating Current (AC). For the
transformation of the power in the PV systems inverters are usually used to convert the power from DC to AC.
The purpose of the power transformation systems is to properly adjust the produced current in order to be
able to be used for consumption.
The most important criteria that an inverter must fulfill are:
Reliability
Energy performance
Harmonious Deformities
Cost
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Compat In a typical PV system the inverter(s) is placed in a certain distance from the panels inside a shelter. In this case
the wires that are used are for DC. However new PV systems have been developed where the panels include
the AC-‐modules so AC wiring is used providing lower costs and better security.
Electronic Control Systems, Security Systems, etc These systems complete a PV system. Electronic control, ground connection, security systems, power meter,
surveillance and monitoring systems (optional but recommended). Something that should be mentioned is
that DEH demands protection measures to avoid problems such as deviation from the specific requirements
for voltage.
Voltage: +15% to -‐20% from 230V
Frequency: ±0.5 Hz from 50Hz
If these two numbers cannot be achieved the inverter automatically disconnects.
Inverter switches off in 0.5secs
Inverter is reconnected after 3 min
If DEH detects that the PV system has other problems, such as harmonics or giving DC to the network, it can
demand extra measures to be taken (i.e.: filters)
Constructors with the biggest PV panel production Ranking Constructor Origin Production (MW) 1 Sharp Japan 324 2 Kyocera Japan 105 3 BP Solar USA-‐Spain-‐Australia India 85 4 Q. Cells Germany 75 5 Mitsubishi Japan 75 6 Shell Solar Germany 72 7 Sanyo Japan 65 8 Schott Solar Germany 63 9 Isofoton Spain 53 10 Motech Taiwan 35 11 Suntech China 28 12 Deutsche Cell Germany 28 13 General Electric USA 25 14 Photowatt France 22 Summary 1055 World Production for 2004 1195
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Factors that determine the appropriateness of a plot
Orientation (southern orientation is the best)
Angle of the ground
Anomalies of the plot (streams, rocks etc.)
Presence of trees and if they can be cut (possible problem with the authorities)
Presence of any other factors that can create shadow and if so how many hours per day.
What is the geographical latitude of the plot? What is the expected performance?
Are there any signs of change in the climate of the area?
Difficulties in accessing the plot. Will the road be in good condition at winter?
Ability to connect with the network of DEH
What is the distance of the low voltage network?
What is the distance of the medium voltage network?
What is the distance of the nearest substation of DEH?
Is the plot at the end of the medium voltage network?
What is the distribution of the loads in the territory?
What are the loads from RES in the area?
Factors that determine the unproblematic licensing procedure by the authorities
Opinion from the archaeological services
Opinion from the archaeological office of Byzantine period
Opinion from the office of later monuments
Opinion from the prefecture about the plot that is not in a protected area (Natura, Ramsar etc) or
aesthetic forest, traditional settlement or high performing agricultural area.
Paperwork that assures that the plot is not on an area that settlements will be built.
Opinion from EOT, OTE, YPA, GEETHA
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Solar Energy Production Park in Larisa
Location The PV park will be located in a privately owned location totaling approximately 5,000 m2 very close to the city
of Farsala, prefecture of Larisa. What is more the location of the land happens to be very close to a DEH power
line, so the set up cost for the connection to the electricity network will be significantly less expensive thus
creating a lower budget need to start the park. Actually there is a DEH power pillar in a distance of
approximately 500m from the installation location perfectly matching the criteria for power delivery that will
be produced from the PV park. To further explain the advantages of the particular location we should proceed
with some technical facts that directly affect the performance of a PV array. These factors are:
Sufficient free and directly facing the sky space
The PV arrays have significantly better performance when the orientation can be to south without any
deviations.
The best performing angle for a PV to perform well is 30o. So the location should easily provide this
setup.
In our particular case all these 3 factors are fulfilled by our location. There is a vast amount of earth to exploit
(800,000m2) and actually all that is needed is maximum 5,000m2. There are no physical obstacles that could
create shadow or prevent the formation of the PV park. Furthermore the location complies with every
prerequisite. It has a south orientation and its angle is approximately 5o-‐10o something that makes it very easy
for the technician to install them with the optimum angle very easy. To further continue the description of the
location it must be said that the Thessaly plain is a Greek region which most of the time has sunshine
something that boosts the performance of the PVs.
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Here is a table explaining the Greek areas:
Location Performance with a typical Thessaloniki 1.200-‐1.325 kWh/year/kW Larisa 1.250-‐1.425 kWh/year/kW Attica 1.300-‐1.450 kWh/year/kW Crete 1.400-‐1.500 kWh/year/kW Rhodes 1.450-‐1.500 kWh/year/kW
To close with, let us not forget to mention that the location is not included in protected areas by greek
government such as Natura 2000, Ramsar, national Parks, aesthetic forests, traditional settlements or
archaeological interest areas. Furthermore it complies with all other conditions that are requested.
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Personnel and Processes It has not been mentioned yet but one of the great advantages of PV arrays is that they literally need very
little maintenance or no maintenance at all. Actually the remote monitoring systems can carry out all the
needed actions.
Operation License For installations ranging between 20kW-‐150kW there is no need for production, installation and operation
licenses. But in this case there is a need for technical specifications which is give by the Regulatory Authority of
Energy (RAE) in the first 10 working days after the application is filled. What is more in order to start operating
an approval of environmental conditions must be completed, which usually takes 3-‐5 months. The location
that the park is going to be approved has passed these terms as it is not included in protected areas such a
Natura 2000, Ramsar, national parks or aesthetic forests nor any other areas that can create infringements
with the authorities.
In every case for the connection of the PV stations with the network there must be a relevant study which has
to be approved by the administrator (DEH or Desmie). The sale of electricity is done by contract with Desmie
and has a life of 10 years. This contract can be automatically renewed for a period of 10 more years as long as
the producer fills a new application form 3 months before the expiration of the contract.
Karatasios Dimitris has taken all the necessary actions in order to be sure that this investment can further
continue from theory to action. To be more specific he has contacted YPEXODE, DEH and has met with the
prefectural authorities of the area and everything shows that there will not be any problems in setting the
system.
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Set-up costs The cost of the PV system will be 600,000. This cost will include everything that is necessary for the park to
be productive and linked to the DEH network, including some more expenses that have to do with protection
of the area, remote surveillance and performance monitoring by the company that the equipment will be
bought. More precisely:
PV panels, support frame, inverters, connection to the network, other equipment: 570.000
F .000
Licenses, paperwork: .000
All parts of the equipment that will be used for the system will be of EU origin, because there is a mutual
agreement between all the country-‐members of EU for tax free European products.
So the preferable brands will be Q. Cells, Shell Solar, Schott Solar, Isofoton, Deutsche Cell or Photowatt. These
brands not only are they from EU but they also are of superior quality compared to other EU brands.
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Financial Plan The necessary capital to buy the equipment, according to 0,000.
The funding of the whole project is given below:
Capital Structure Euros Percentage (%) Funding 300,000 50% Bank Loan 150,000 25% Investors Capital 150,000 25% Total Set Up Costs 600,000 100%
Investment Law Funding
result the owners turned to the Greek Investment Incentives Law 3468/2006, which strongly supports
businesses offering power production from RES.
The photovoltaic park belongs to Zone B thus it will be funded by the Investment Law with 50% of the total
investment.
Funds per Location % of Funding Zone A: Attica-‐Thessaloniki (not including islands and industrial areas)
40
Zone B: Central Macedonia, Western Macedonia, Thessaly, Crete, Ionian Islands, Sterea Ellada, Southern Aegean Islands
50
Zone C: Western Greece, Eastern Macedonia, Thrace, Epirus, Peloponnesus, Northern Aegean Islands
60
The rest 50% of the investment is going to be funded by the owners and a bank loan. According to the
investment law at least 25% of the whole project must be directly funded by the owners. The rest 25% will be
funded by bank loan.
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Bank Loan Funding The amount of bank loan is 150,000 (25%), approved by Piraeus Bank with an interest of approximately 6%
(euribor + 2% + 0.6% government fee) for a ten year period. As guarantee the bank needs the contract with
DEH.
The remaining amount of money will be given to the company as capital from the two investors. This amount
is 150,000, covering 25% of the investment project. The investors will contribute equally concerning capital,
. Plus more, for setting up the company and some other initial expenses. This money
cannot be covered by investment law so that is why it is calculated separately.
Financial Data The financial data concerning the coming 20 years are presented in the following tables. Balance sheet,
income statement and budgets are formulated in order for management to have a clear view of its financial
information in the following years.
Assumptions:
Peak production of energy will reach 140,000 kWh/year; for a 100kW system
Performance ratios for power production will annually decrease by 0.5% for the first 10 years and 1%
for the next 10.
approximately 2.5%/year.
Administrative, maintenance and security costs are calculated a 600.000)
annually. This amount has been chosen after lot of discussion with experts and it was an amount that
everybody agreed. 9,000 per year plus 2.5% every year.
3,000 (administrative, maintenance, security at the beginning etc.).
The plot is already owned and no payment is needed.
Initial Capital Level is calculated by Own capital + License and other expenses = 150,000 + 20,000 =
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Year of establishment Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenues 6
Operating Expenses Administrative, Maintenance,
Security
EBIT -
Interest Expense
Operating Income -
Amortization of Capital
Income Before Taxes - 34,
Applicable Tax, 20%
Loan Amortization (Principal)
Net Income -
Capital Level - - - - - -
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Revenues 76,702.
Operating Expenses
Administrative, Maintenance, Security
EBIT
Interest Expense
Operating Income
Amortization of Capital
Income Before Taxes 4
Applicable Tax, 20%
Loan Amortization (Principal)
Net Income
Capital Level 55
*Note: Net Income is calculated as follows: Operating Income (Loan Amortization + Applicable Tax)
*Note 2: The owners can use the path of entrepreneurial fee if they want to. According to law 994, a partnership company can declare operating expenses up to 50% of its income before taxes for entrepreneurial fee. Depending on the situation this can be a useful exploit.
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T ted will be between years 5 to 6.
ROI
The ROI is calculated on the money that was invested for the company by our own capital and loan. It is estimated 15.1% (Average Net Profit/ Owners Invested Capital)
-‐300,000.00
-‐200,000.00
-‐100,000.00
0.00
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
800,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Capital Level
Capital Level
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Appendix PV examples:
A rtificial PV tree in Austria
C IS Tower London P Vs on the building
PVs on the roof
PVs in a parking lot
PV park in G ermany 1
