How to Setup 5MW 10MW Solar PV Module Manufacturing Unit - Complete Business Model

5MWp/10MWp

SolarPVModule

ProductionUnit Total Business Model

A complete analysis & assessment have been done which can be utilised as bankable DPR.

The whole process of setting up a solar PV Module Production Unit and the required

business model have discussed in detail. Also The Market Analysis, Financial aspects,

Marketing strategies can be found in this article.

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1

Acknowledgement

Right now solar PV market is booming thanks to our Govt. support

which is constantly coming up with new & attractive energy policies.

In india, a lot of new companies are starting as system integrator,

EPC service providers. But, compared to these service providers, the

number of Solar PV Panel producing companies is very few. So in this

paper, Ill discuss about the technology & financial aspect of setting

up a Solar PV Module production unit in detail. The reader can find

about the detailed overview of machineries involved, total

investment required, how to deploy the marketing team, details of

production team HR structure and benefits related to the products

and a layout to setup the production unit.

This paper/project report will be adequate to prepare a bankable

DPR also. The most important thing is how to do the marketing and

the related scope. Keeping this in mind, the report enlightens this

particular topic with more detail.

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2

Table of Contents Market Analysis ....................................................................................................................................... 3

Solar PV Project Scenario .................................................................................................................... 3

Indian Market Overview ..................................................................................................................... 6

Technical Details Overview, Instruments, Raw Materials, Layout ....................................................... 8

Required Materials & their specification: ........................................................................................... 9

Technical Details of the Manufacturing Instruments ....................................................................... 11

Plant setup: ....................................................................................................................................... 19

Production Unit Layout/Floor Plan ............................................................................................... 19

Process Flow: .................................................................................................................................... 20

Financial Analysis Investment, Payback, Break Even & more. ........................................................ 21

Mode1 For 5MWp yearly PV Module Production Capacity ............................................................ 21

Payback Analysis ........................................................................................................................... 22

Return of Investment Analysis ...................................................................................................... 23

Break Even Analysis ....................................................................................................................... 24

Mode2 For 10MWp SPV Module Production Capacity .................................................................. 26

Investment & related: ................................................................................................................... 26

Cash Flow & Net Profit .................................................................................................................. 26

Investment Payback Analysis For 10MWp production unit .............................................. 27

ROI Analysis: .................................................................................................................................. 28

Break Even Analysis ....................................................................................................................... 29

Marketing Strategies ............................................................................................................................. 31

About Me: ............................................................................................................................................. 32

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3

Market Analysis

Solar PV Project Scenario

The charts presented below will give an overview of already commissioned/installed solar projects in

the major countries by 2014, March.

0

50

100

150

200

250

300

350

400

United States China Germany India United

Kingdom

Spain Italy

Installed Plants

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Installed Capacity

Now, with same consideration, For China it is = 18,840,000 or 18.84 millions of 250Wp PV Panels

For United States, it is = 25,680,000 or 25.68 millions of 250Wp SPV Panels

And for the listed 7 countries in total, it is = 83,000,000 or 83 millions of 250Wp SPV Panels.

Now, lets take the value from the chart about the India. According the presented chart, currently the number of

installed Solar Power Plants (cumulative) is 184 & the respective capacity is equals to 1975MWp. So, just for the

ease of understanding, lets consider these all power plants used 250Wp Poly-Si PV Panels which means the total

number of 250Wp PV panels used is equals to 7,900,000 or 7.9 millions number of 250Wp PV Panels.

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4

Now, lets see the up-coming or proposed or under development projects (June,2014 to

March,2015) in these same countries:

United States

China Germany

India

United

Kingdom

Spain Italy

Nos of Proposed Plants

Nos of Proposed Capacity

United States

China

Germany

India

United Kingdom

Spain

Italy

So, Upcoming demand of Panels in India = 22.30 millions of 250Wp SPV Panels (19%)

Upcoming demand in China = 24.04 millions of 250Wp SPV Panels (20%)

Upcoming demand in United States = 56.72 millions of 250Wp SPV Panels (48%)

Total demand in those 7 countries = 118.17 millions of 250Wp SPV Panels (100%)

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Lets have a look on the target set for 2020 by the leading countries in this Solar PV Energy Market:

0

10

20

30

40

50

60

China USA India Germany Italy United

Kingdom

Japan

Target in GW Installed Capacity as on dec, 2013 (GW) Rest of the Target (GW)

So from the above chart we can estimate the upcoming demand of solar PV Panels in those

countries. The estimates are

Country Project by 2020 (GW) SPV module demand

by 2020* in millions)

China 31.7 126.8

USA 18 72

India 17.7 70.8

Germany 16.5 66

Italy 5.4 21.6

United Kingdom 20.3 81.2

Japan 19.4 77.6

*just like the previous calculation, here also the 250Wp Poly-Si PV Panels have been considered.

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6

Indian Market Overview:

State Wise target under JNNSM scheme & other State Govt. Policies :

State Target By the year Proposed Allocations in 2014

Uttar Pradesh 500MW by 2017 300MW

Uttarakhand 500MW by 2017 50MW

Karnataka 200MW by 2016 50MW

Rajasthan 750MW by 2017 None

Punjab 1000MW by 2022 300MW

Tamil Nadu 3000MW by 2015 None

Chandigarh 1000MW by 2017 100MW

Odisha 135MW by 2015 20MW

Madhya Pradesh 800MW 100MW

Existing Solar PV Module Manufacturing Company Company Name Production Capacity

Per year (in MW)

Company Name Production Capacity Per

year (in MW)

Access Solar 15 Premier Solar 8

Ajit Solar 20 Rajratna ventures 20

Ammini Solar 1 Radiant Solar 0.5

Amro Technology 2 Rashmi Industries 30

Akshaya Solar 6 REIL 2.5

Alpex Solar 60 Sahaj Solar 0.4

Aroma Renewable

Energy

2 Shan Solar 30

Andromeda Energy

Technology

5 Shivam Solar 25

Cira Renewables 3 SLG Solar 5

Deshmukh Solar 100 Sun Energy System 18

Divakar PV Solar 15 Sun Solar Techno 2.5

Ecosol Power 10 Sungrace Energy 10

Electromac Solar 24 SVL 140

Empire Photovoltaic 8 Synergy Electric 35

EMMVEE Photovoltaic 135 TES 5

Enfield Solar Energy 5 Tapan Solar 20

Evergreen Solar 20 TATA Power Solar 100

Goldi Green 100 Titan Energy Systems 110

HHV Solar Technologies 35 Topsun Energy 70

ICOMM Tele Ltd 15 Trom Solar 1.2

JJ PV Solar 15 UPV Solar 12

KCP Solar Industry 16 Vega solar 14

KL Solar 30 Vikram Solar 48

Kohima Energy 50 Vinova Energy 1

Lubi Electronics 25 Vipul Enterprises 50

Kotak Urja 20 VJ Solar 5

Lanco Solar 75 Waaree Energies 250

NEASE 20 Vorks Energy 3.5

Novergy Energy 37 XL Energy Systems 15

Photonix Solar 15 Websol Solar 25

PLG Power 18

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Indian Market Analysis & Scope of New Production Unit Total Production Capacity Per Year in Indian Market 2GW (around)

Total Production by 2020 (considering yearly yield at

fixed value)

14GW

Demand in Indian market by 2020 17.7GW

Extra Production Capacity required per year 620MW

Global Market Analysis & Scope of New Production Unit Considering the Global Market, demand per year 26GW

Installed production unit all around the world 16.7GW

Excess Solar PV demand per year around the world 9.3GW

Benefits for Indian PV Module Production Company:

Large scale projects are going on or proposed to be executed very soon in India

Residential/ domestic applications have increased by nearly 40% by 2013

A big opportunity to export solar PV Module to global market

The countries which are now in 1st phase of Solar energy implementation, preferring Indian

companies more

Small scale projects like solar irrigation, rooftop solutions, micro & mini grids etc. are in

their peak demand now and will increase more in the coming years

Indian Govt. recently announces some great policies and relaxation in tax duties which is a

very good indication for high profit may be attended by exporting solar PV Panels to global

market

**Though the current cumulative capacity of India is 2GW which the highest capacity can be achieved, many of these

production/assembly units work as OEM or subsidiary type.

For an example, suppose there is a company XYZ in India with production capacity 100MW/year and there is another

production company ABC with a production capacity n MW/year where n may be less or greater than 100. It may

happen that at any time ABC company get an order larger than there current production capacity nMW/year or

(n/12)MW/month. Then ABC would approach to XYZ and give them a portion of ABCs work order where the panels will

be manufactured at XYZs factory under the name plate & brand name of ABCs.

So, the point is that the actual manufacturing or production capacity is always 60-70% of the highest (which is 2GW for

India)

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8

Technical Details Overview, Instruments, Raw Materials, Layout

Overview:

This document will discuss about the mainly 5MWp & 10MWp Panel Production line with an

option of turning it into 10MWp & 20MWp yearly production capacity.

The technical discussion will consist of instrument details, materials & components to produce

the Solar PV Modules, operational details, floor plan and the basic process flow of the production

line.

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9

Required Materials & their specification:

For 250Wp Modules (as an example)

Materials Specification Remarks

Solar Cell: Conversion efficiency: >16%

Rated Power: 4.08Wp

Imp: 7.94A Isc: 8.41A

Vmp: 0.519V Voc: 0.62V

Dimension: 156x156mm2 (LxW), T= 0.2mm

Power Co-Efficient: 0.405 0.05%/0C

Importance: The key component, the

main and most important

basic building block of

Solar PV Module & Panels

Ethylene Vinyl Acetate (EVA) Film: Thickness: 0.45-0.625mm

Tensile: 8.5MPa

Elongation: 800%

Dielectric Strength: 49.9KV/mm

Refractive index: 1.49

Surface resistivity: 8.1x1012 ohms

Used For: High Stability against

Damp heat

High light transmission Optimizing the bond

strength with bond glass

and backsheet.

Highest protection & encapsulation against UV

and weathering.

Solar Glass: Dimension (max): 2134mmx2134mm or

3000mmx1830mm

Thickness: 3.2mm

Solar Energy Transmittance: 91%, 300~2500nm

wavelength range

Importance of Solar glass: Protection from

Weathering & outside

objects

A wide spectrum of light for solar cells to operate

Stability against UV

Soldering ribbon: Type1 PV Busbar ribbon (3mmx0.2mm; WxT)

Type2 Interconnect ribbon (1x0.08 mm2;WxT)

Conductor Material: ETP/DIP/OFC form

Tensile strength: 250N/mm2

Elongation: 20%

Camber: 0.5% (5mm on 1m length)

Used For:

To create the PV busbar over the solar cells

To connect the cells in electrically series-parallel

connection

Thermo Plastic Elastomer (TPE) Back sheet:

Construction type: PVF/PET/PE

Thickness: 0.25mm

Length: 100 meters per roll; width: 1.2m max

Peel Strength PET/PVF: 6N/10mm

Peel Strength PE/PET: 10.5N/10mm

Peel Strength PET/EVA: Destruct

Dielectric Strength: 15.55KV

Moisture Permeability: 3.1g/m2/day

Partial Discharge: 1000VDC

Importance of TPE backsheet:

Improved module eff. High gloss surface to

increase solar reflectance

Easily cleanable Higher stability under

damp heat & freze thaw

conditions.

Very strong tear-bond to EVA

Chemically resistant

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Module Frame: Dimension: 1638x982x40mm (LxWxH); 50mm

end-end gap in L & W.

Material: Anodized Aluminium Alloy

Used For: To give a structural solid

usable shape to solar PV

module & to create a

Solar PV Panel

Junction Box: Protection class: IP67/IP65

Bypass Diodes: 3 diodes

Importance: To complete the

electrical circuit of solar

cells & make it ready to

use as power generation

module

To maintain the electrical safety

Cable (Optional): Thickness: 4mm2

Length: 1000mm (650mm optional)

Voltage range: 1.5KV DC/(1.2/1.0)KV AC

Max Voltage tolerance: 6.5KV for 5mins

Operating temperature range: (-400 to 1200C)

Safe pulling force: 50N/m2

Used For: To connect to other PV

modules in the

string/array

MC4 connector

Type: Male-female coupler interlocking (snapin)

Protection class: IP65 (as per NEC - 2011)

Rated current max: 30A

System Voltage Max: 1000V

Operating temperature range: (-400 to 1200C)

Importance:

To connect to next Module

To complete the string To connect to

inverter/charger device

To maintain the electrical safety in the system

Sealant: Consistency: Paste

Polymer: 100% Silicone

Hardness: 30

Peel Strength: >35 pil

Movement capability: 25%

Operating temperature range: (-480 to 1200 C)

Used For: To seal the

envelope/frame

To fix the JB on the back side of Panel

To make the Panel weather proof

As far now, I hope that readers will get a clear idea about the basic components required to make a

solar PV Module. Next, Ill present the technical details of the equipment required to

Assemble/Manufacture a Solar PV Module. Ill show you the details & the related mechanism of

Machines/equipment used in 5MWp & 10MWp yearly production capacity based units and how to

double the production capacity when required.

So, please proceed to next part of this document.

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Technical Details of the Manufacturing Instruments

Automatic Solar PV Module Laminator Image source: www.reoo.net

Dimension 2.2x3.6m2

Laminating Area (WxLxH) 2200mm x 3600mm x 25mm

Control mode Manual / Automatic

Control System PLC (); HIMS: Touch Screen ()

Laminating time 2-4 minutes (excluding solidification time)

Heating Mode Oil heating with flow pressure 0.28~0.32MPa

Temperature Control PID based

Temperature Uniformity 1.50C

Temperature control accuracy 1.00C

Temperature control range 300C - 180

0C

Pumping Rate 70 Lps

Heating rate 1350C at room temp. with 50-60 minutes

Vacuum rate 200Lps

Silicone sheet size 3800mm x 2400mm, 5mm thickness

Lid Opening Straight from hydraulic (200mm max height)

Production capacity (this equipment is for laminate solar glass, EVA, Solar cell & backsheet)

Mode-1 (Single shift; 8hours a

day)

250Wp x 3pieces/time x 3times/hour x 8 hours

x 300 days = 5.4MWp/year

Mode-2 (Double shift; 16hours a

day)

250Wp x 3pieces/time x 3times/hour x 16

hours x 300 days = 10.8MWp/year

Comp. air pressure required 0.6 1.0 MPa

Total Power Consumption

(Rated/Actual)

75KW/38KW (3-ph, 5line; 50Hz)

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Solar Cell Tester : Required to sort solar cells according to their electrical performance under a test condition of

simulated sunlight (variable irradiation value e.g. 100W/cm2 , 80W/cm2, 120W/cm2).

Testing Area/range 200x200mm/ 0.1 5Wp

Illumination uniformity 3%

Single flash time 10ms

Test period 3 second for each cell

Testing Parameters Isc, Voc, Pmax, Vmp, Imp, FF, EFF, Temp, Rs,

Rsh

Power Supply 1KW, 230V, 50Hz (1-ph)

Solar PV Module Tester: To measure I-V characteristics and other electrical parameters of poly & mono crystalline PV

Modules

Effective test area/test range 2000 x 1100 mm/ 5W to 300W

Uniformity of test result 3%

Single Flash time 10ms

Testing Parameters Isc, Voc, Pmax, Vmp, Imp, FF, EFF, Temp, Rs,

Rsh

Power Supply 3KW, 230V, 50Hz (1-ph)

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Electro-Luminance (EL) Tester: Required to inspect the solar PV Module for secluded split, cracked cell, rosin joint, wire break &

defects

Module testing capacity 2100mm x 1200mm

Maximum current 10A

Maximum Voltage 60V

Inspecting camera resolution 14000x1040 pixel

Time of exposure 0.1 25.5 seconds (Adjustable)

Required temperature 100C - 300C

Permissible Humidity 20 70%

Power 2KW, 230V (running condition)

Glass Washing Machine: Using to dry Solar PV Glass automatically & efficiently to improve the Solar Panels quality

Max permissible width of glass 1200mm

Minimum length of glass 200mm

Applicable thickness of glass 1.8 8mm

Number of brushes 2 pairs

Air Knife 2 tricks

Frequency converter Delta VFD

Air blower rating 2x11KW

Water pump power rating 2x0.75KW, 0.55KW

Working Speed 2m/min

Actual power consume 10KW (running condition)

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Framing Machine: Required to fix solar Module frame and seal the 4 corner of the frame

Maximum Module dimension 2000mm x 1100mm

Difference of diagonal line difference 1.5mm

Power Supply Single Phase

EVA, TPE back sheet cutting station: This is actually a table with a tough top for

cutting EVA & TPT back sheet for solar panels

Working table dimension 220 x 1100mm

Solar cell Soldering station: The soldering station includes operating platform with power distribution board, heating platform

and its control system. Soldering template for both single cell soldering and string soldering.

2 set Single soldering heating plate and

controller.

1 set String soldering heating plate and

controller. 1 pcs String soldering model plate 125 x 125

. 1 pcs String soldering model plate 156 x 156,

2 bar lines. 1 pcs String soldering model plate 156 x 156,

3 bar lines. 3 pcs Intelligent lead free electrical iron. 3 pcs working chair.

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Operating platform dimension 1800 x 1200 mm

Electric Iron: Heating by high frequency vortex, special sensor can accurately rapid control iron the soldering

temperature.

Dimension(WxLxT) 96mm x 135mm x 160mm

Operating temperature of iron 1000C 5000C

Temperature stability 20C

Dormant time 0~99min

Soldering ribbon cutting machine: The machine can level the ribbon, which in term

can improve the quality of soldering.

Module transfer Carrier: Hand truck for transportation of Glass / Modules

/ Panel at different stage of production

Ready Material Carrier: Hand truck for transporting the finished laying

up module to be laminated, carry 10 pcs 300W

solar panel with proper protection.

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Laying up station: Provide horizontal surface to lay up the solar cell

string, Stack solar cell string, tempered glass,

EVA & back sheet and wire the solar cell string

with ribbon.

Visual Inspection Station: For inspection of the finished lay up solar

module before laminating

Edge Trimming Table: Table for trimming the EVA & TPT around the

panel after lamination. Support 300w panel,

Include the electrical knife.

Cleaning table: Table for cleaning the surface of the finished

module.

Dimension: 1200X800X800mm,

Support 300w panel

Cell sorting Station: Working table for select out solar

cells from the faulty one. And

classification the solar cell for solar

production.

Dimension :1200X1200X800mm

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Lacer Dicer: The small solar module need

made by small solar cell. such as

the solar module under 50W

Compressor: Used to generate compressed air for laminator,

Framing machine, Solar cell tester and other

pneumatic equipments

Total power: 7.5 KW, 380V/50Hz, or according

customers need.

Capacity: 1.2CBM /s

Pressure: 1 Mpa

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Plant setup:

Total Space required 935m2

Power Source 3-ph 5 line 50KW for 5MWp & 100KW for 10MWp yearly production capacity

Air conditioning Should be maintained at 250C until the lamination process

Compressed air source Max 1.2MPa

Environment Dust-proof, enclosed

Water supply To a small extent

Condition of Stock room Ambient temp at 250C with controlled humidity

Production Unit Layout/Floor Plan

Interconnection

Module tester

Stringer

Laminator

Layup station

Cell testing

Glass washing

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Process Flow:

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Financial Analysis Investment, Payback, Break Even & more.

Mode1 For 5MWp yearly PV Module Production Capacity

Investment & related:

Initial Investment 115,000USD

Yearly Production Capacity 5MWp SPV Modules (single shift, 8hrs/day)

Number of shifts Single shifts, 8 hours/day, 300 working days/year

Production Unit staffs 9 (7 technicians + +1 supervisor + 1 Production Engineer)

Marketing & Sales team staffs 14 (12 Mktg Executives + 1 Re. Manager + 1 GM)

After Sales team staffs 3

Admin + Office staffs 4 (1 admin + 1 accountant + 1 CCE +1 HR Exc.)

Yearly utility bill + expenses 15,350USD

Office & plant space rental 1,000USD

Cash Flow & Net Profit

Yearly Production 5MWp SPV Modules

Cost of raw materials 0.35USD/Wp

Finishing into saleable product cost 0.08USD/Wp

Average sale price 0.64USD/Wp

Yearly expenses in Staffing & HR 77,000USD

Yearly expenses Utility, rental & others 18,000USD

Yearly Production cost 2,150,000USD

Yearly average sales (of 5MWp) 3,200,000USD

Before We Proceed:

Before we get into more further of financial analysis, we need to keep some points in consideration:

1. To setup this production unit of 5MWp (/10MWp) yearly capacity, the initial investment or the

setup cost is 115,000USD (69Lakhs INR)* as per the Indian & Asian market.

2. The major turnkey solution providers of this production line are from China, Italy, German, India

& USA

3. Using the described production line above, one can produce Poly-crystalline & Mono-crystalline

solar PV Panels ranging from 1Wp to 300Wp.

4. This part of the discussion will be divided into 2 parts namely Mode1 (for yearly 5MWp capacity)

and Mode2 (for yearly 10MWp capacity).

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Payback Analysis Year: 1 2 3 4 5 6 7

Relevant benefits:

Incremental Value of New Business $32,00,000 $30,40,000 $28,88,000 $28,01,360 $27,70,545 $27,70,545 $27,70,545

Relevant controllable costs:

Executive Salaries & Bonus $77,000 $82,390 $88,157 $94,328 $97,158 $98,130 $99,111

Direct Labor Costs $4,00,000 $4,12,000 $4,24,360 $4,37,091 $4,50,204 $4,63,710 $4,77,621

Materials Costs $17,50,000 $16,80,000 $16,12,800 $15,48,288 $14,86,356 $14,26,902 $13,69,826

Advertising $5,000 $5,000 $3,000 $3,600 $4,320 $5,184 $6,221

New Recruitment process $2,000 $4,000 $5,200 $6,760 $8,788 $11,424 $14,852

Market research expenses $25,000 $25,250 $25,503 $25,758 $26,015 $26,275 $26,538

Incremental maintenance $0 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000

Other Costs $18,000 $19,800 $19,800 $21,780 $21,780 $23,958 $23,958

Total costs $22,77,000 $22,33,440 $21,83,820 $21,42,605 $20,99,621 $20,61,583 $20,24,127

EBITDA $9,23,000 $8,06,560 $7,04,180 $6,58,755 $6,70,924 $7,08,962 $7,46,418 Less: Depreciation $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200

Income before taxes $7,01,800 $5,85,360 $4,82,980 $4,37,555 $4,49,724 $4,87,762 $5,25,218

Less: Taxes $49,126 $40,975 $33,809 $30,629 $31,481 $34,143 $36,765

Net income $6,52,674 $5,44,385 $4,49,172 $4,06,926 $4,18,243 $4,53,618 $4,88,453 Plus: Depreciation $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200

Minus: Investment $22,12,000 $0 $0 $0 $0 $0 $0

Net Cash Flow ($13,38,126) $7,65,585 $6,70,372 $6,28,126 $6,39,443 $6,74,818 $7,09,653

Cumulative Net Cash Flow ($13,38,126) ($5,72,541) $97,830 $7,25,957 $13,65,400 $20,40,218 $27,49,872

Undiscounted payback period: 2.75 Years

Discount Rate 10%

Discounted Cash Flow ($12,16,478) $6,32,715 $5,03,660 $4,29,019 $3,97,044 $3,80,917 $3,64,164

Cumulative Discounted Cash Flow ($12,16,478) ($5,83,763) ($80,103) $3,48,915 $7,45,959 $11,26,877 ($12,16,478)

Discounted payback period: 3.04 Years

Now, as a business model, when One is going to start the business of Solar PV Module

Production/manufacturing & marketing, then the actual investment at the beginning is required :

22,12,000USD (for the very first year)

*This investment amount is based on the 10 different solution providing companies from different

countries.

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Return of Investment Analysis

Year Total

Expenditure Cumulative Sales Comulative

Expenses Sales

0 $22,44,000 22,44,000 $32,00,000 32,00,000

1 $21,98,130 44,42,130 $30,40,000 62,40,000

2 $21,46,038 65,88,168 $28,88,000 91,28,000

3 $21,02,178 86,90,346 $28,01,360 1,19,29,360

4 $20,57,982 1,07,48,328 $27,70,545 1,46,99,905

5 $20,19,528 1,27,67,856 $27,70,545 1,74,70,450

6 1,27,67,856 1,74,70,450

1,27,67,856 1,74,70,450

ROI: 36.8%

$-

$5,00,000.00

$10,00,000.00

$15,00,000.00

$20,00,000.00

$25,00,000.00

$30,00,000.00

$35,00,000.00

Year1 Year2 Year3 Year4 Year5 Year6

Total Expenses Targeted Sales

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Break Even Analysis

Breakeven Point (units): 437

Sales volume analysis: Sales volume per month(units) 0 167 333 500 667 834 1,000 1,167 1,334 1,500 1,667

Sales price per unit 175 175 175 175 175 175 175 175 175 175 175

Fixed costs/month 20,750 20,750 20,750 20,750 20,750 20,750 20,750 20,750 20,750 20,750 20,750

Variable costs 0.00 21,254 42,508 63,762 85,017 1,06,271 1,27,525 1,48,779 1,70,034 1,91,288 2,12,542

Total costs 20,750 42,004 63,258 84,512 1,05,767 1,27,021 1,48,275 1,69,529 1,90,784 2,12,038 2,33,292

Total sales 0.00 29,172 58,345 87,517 1,16,690 1,45,862 1,75,035 2,04,207 2,33,380 2,62,552 2,91,725

Net profit (loss) -

20,750 -

12,831 -4,913 3,004 10,923 18,841 26,759 34,677 42,596 50,514 58,432

Variable costs

per unit

73%

Unit

contribution

margin

27%

Unit Contribution Margin

Commissio

n per unit

68%

Direct material

per unit

16%

Shipping per unit

0%

Supplies per unit

10%

Other

variable

costs per

unit

6%

Variable Costs Per Unit

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(50,000.00)

0.00

50,000.00

1,00,000.00

1,50,000.00

2,00,000.00

2,50,000.00

3,00,000.00

3,50,000.00

1 2 3 4 5 6 7 8 9 10 11

Break Even Analysis Chart

Fixed costs per period Total costs Total sales Net profit (loss)

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Mode2 For 10MWp SPV Module Production Capacity

Investment & related: Initial Investment 115,000USD

Yearly Production Capacity 10MWp SPV Modules

Number of shifts Double shifts, 16 hours/day, 300 working days/year

Production Unit staffs 18 (14 technicians + +2 supervisor + 2 Production Engineer)

Marketing & Sales team staffs 22 (18 Mktg Executives + 3 Re. Manager + 1 GM)

After Sales team staffs 5

Admin + Office staffs 4 (1 admin + 1 accountant + 1 CCE +1 HR Exc.)

Yearly utility bill + expenses 29,600USD

Office & plant space rental 1,300USD

Cash Flow & Net Profit Yearly Production 10MWp SPV Modules

Cost of raw materials 0.35USD/Wp

Finishing into saleable product cost 0.08USD/Wp

Average sale price 0.64USD/Wp

Yearly expenses in Staffing & HR 120,000USD

Yearly expenses Utility, rental & others 39,000USD

Yearly Production cost 4,300,000USD

Yearly average sales (of 5MWp) 6,700,000USD

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Investment Payback Analysis For 10MWp production unit

Year: 1 2 3 4 5 6 7

Relevant benefits:

Incremental Value of New Business $67,00,000 $65,66,000 $64,34,680 $63,05,986 $61,79,867 $60,56,269 $59,35,144

Relevant controllable costs:

Executive Salaries & Bonus $1,17,000 $1,25,190 $1,33,953 $1,43,330 $1,47,630 $1,49,106 $1,50,597

Direct Labor Costs $8,00,000 $8,24,000 $8,48,720 $8,74,182 $9,00,407 $9,27,419 $9,55,242

Materials Costs $35,00,000 $33,60,000 $32,25,600 $30,96,576 $29,72,713 $28,53,804 $27,39,652

Advertising $5,000 $5,000 $3,000 $3,600 $4,320 $5,184 $6,221

New recruitment process $3,200 $4,000 $5,200 $6,760 $8,788 $11,424 $14,852

Market research expenses $25,000 $25,250 $25,503 $25,758 $26,015 $26,275 $26,538

Incremental maintenance $0 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000

Other Costs $23,000 $25,300 $19,800 $21,780 $21,780 $23,958 $23,958

Total costs $44,73,200 $43,73,740 $42,66,776 $41,76,985 $40,86,653 $40,03,172 $39,23,060

EBITDA $22,26,800 $21,92,260 $21,67,904 $21,29,001 $20,93,214 $20,53,098 $20,12,084

Less: Depreciation $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200

Income before taxes $20,05,600 $19,71,060 $19,46,704 $19,07,801 $18,72,014 $18,31,898 $17,90,884

Less: Taxes $1,40,392 $1,37,974 $1,36,269 $1,33,546 $1,31,041 $1,28,233 $1,25,362

Net income $18,65,208 $18,33,086 $18,10,435 $17,74,255 $17,40,973 $17,03,665 $16,65,522

Plus: Depreciation $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200 $2,21,200

Minus: Investment $22,12,000 $0 $0 $0 $0 $0 $0

Net Cash Flow ($1,25,592) $20,54,286 $20,31,635 $19,95,455 $19,62,173 $19,24,865 $18,86,722

Cumulative Net Cash Flow ($1,25,592) $19,28,694 $39,60,329 $59,55,784 $79,17,957 $98,42,821 $1,17,29,544

Undiscounted payback period: 2.75 Years

Discount Rate 10%

Discounted Cash Flow ($1,14,175) $16,97,757 $15,26,397 $13,62,923 $12,18,355 $10,86,536 $9,68,187

Cumulative Discounted Cash Flow ($12,16,478) ($5,83,763) ($80,103) $3,48,915 $7,45,959 $11,26,877 $77,45,980

Discounted payback period: 3.04 Years

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28

ROI Analysis:

Year Costs Cumulative Benefits Cumulative

Costs Benefits

0 $ 44,73,200 44,73,200 $67,00,000 67,00,000

1 $ 43,73,740 88,46,940 $65,66,000 1,32,66,000

2 $ 42,72,276 1,31,19,216 $64,34,680 1,97,00,680

3 $ 41,83,035 1,73,02,251 $63,05,986 2,60,06,666

4 $ 40,92,703 2,13,94,954 $61,79,867 3,21,86,533

5 $ 40,09,827 2,54,04,781 $60,56,269 3,82,42,802

6 $ 39,29,715 2,93,34,495 $59,35,144 4,41,77,946

2,93,34,495 4,41,77,946

ROI: 50.6%

0

10,00,000

20,00,000

30,00,000

40,00,000

50,00,000

60,00,000

70,00,000

Year0 Year1 Year2 Year3 Year4 Year5 Year6

Total Expenses Targeted Sales

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29

Break Even Analysis

Breakeven Point (units): 687

Sales volume analysis:

Sales volume per period (units) 0 333 667

1,000

1,334

1,667

2,000

2,334

2,667

3,001

3,334

Sales price per unit 175 175 175 175 175 175 175 175 175 175 175

Fixed costs per period

32,650

32,650

32,650

32,650

32,650

32,650

32,650

32,650

32,650

32,650

32,650

Variable costs 0.00 42,508

85,017

1,27,525

1,70,034

2,12,542

2,55,051

2,97,559

3,40,068

3,82,576

4,25,085

Total costs 32,650

75,158

1,17,667

1,60,175

2,02,684

2,45,192

2,87,701

3,30,209

3,72,718

4,15,226

4,57,735

Total sales 0.00 58,345

1,16,690

1,75,035

2,33,380

2,91,725

3,50,070

4,08,415

4,66,760

5,25,105

5,83,450

Net profit (loss)

-32,650

-16,813 -977

14,859

30,696

46,532

62,369

78,205

94,042

1,09,878

1,25,715

73%

27%

Unit Contribution Margin

Variable costs per unit

Unit contribution margin

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30

$87.50, 68%

$20.00, 16%

$0.00, 0%

$12.50 , 10%

$7.50 , 6%

Variable Costs Per Unit

Commission per unit

Direct material per unit

Shipping per unit

Supplies per unit

Other variable costs per unit

(1,00,000.00)

0.00

1,00,000.00

2,00,000.00

3,00,000.00

4,00,000.00

5,00,000.00

6,00,000.00

7,00,000.00

1 2 3 4 5 6 7 8 9 10 11

Dollars

Sales Volume (Units)

Breakeven Analysis Chart

Fixed costs perperiod

Total costs

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Marketing Strategies

And Your Market is Global:

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32

About Me: Hello! Myself Amrit Mandal, Executive Director (Technical) of OhmSolar & Technologies. In my

professional career, till now I have consulted & executed quite a number of MW scale Solar PV

projects in India and abroad.

We operate from West Bengal, India & provide services related to solar PV through the world.

For any queries Contact us: [email protected]

Please feel free to contact me to clear any doubt regarding Solar work at my personal e-mail id:

[email protected]

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As a company we provide:

Total Project consultancy for Solar Projects (Single window Solution)

Sourcing Management services to Solar companies - for both the developer & PV

manufacturers

Pre-feasibility studies of PV projects

Market research for PV projects, production units and upcoming & existing PV

companies

Owners engineering services for PV production line & projects

O&M services for Large scale PV Projects

Documents

How to Setup 5MW 10MW Solar PV Module Manufacturing Unit - Complete Business Model