Solar Panels Product Profile Our

Solar Panels

Product Profile

Our company is going to sell and distribute solar panels to commercial, residential and farm clients throughout the Golden Horseshoe, with an emphasis on Hamilton, Brantford and the Niagara region. Solar panels consist of photovoltaic panels that convert light from the sun into electricity stored in batteries. Solar panels are typically used to supplement the conventional electric grid, providing cost savings to customers. Solar panel technology has existed for many years, and the typical solar panel array consists of the photovoltaic panels, batteries for storing energy, wiring, a stand, and an inverter that converts direct current to alternating current.

There are several sources for solar panels globally, with the majority of major producers originating in China, or sourcing their panels from China. Appendix a illustrates a typical home use for solar panels. Farms and commercial concerns typically have much bigger arrays, as they have more space to accommodate them, and more substantial energy needs. The price for an array of solar panels varies widely, depending on a number of factors. The price incorporates the size and design of the array itself, the amount of wiring needed, and the cost of installation. Installation cost varies significantly depending on factors such as the remoteness of the site, the difficulty in installation (roofs are more difficult than on-land installations, for example) and site-specific risk factors. Competitors rarely promote prices publicly, as they typically need to visit the site in order to provide an estimate. One area competitor (Solar Up Energy) quotes $500 for the site inspection alone. Small systems for boats or RVs available at retail range from $250-$700.

The types of customer systems we will install are more likely to be priced anywhere from $10,000 - $50,000 or more. The price of panels is also highly dependent on the price of silicon, the main ingredient, and this can be highly volatile (Sweet, 2009). Government incentives also play a role in determining the cost of solar panels to consumers, and therefore will also contribute to the prices that the company will charge. In Ontario, the MicroFIT program pays 80.2 cents per kilowatt-hour of electricity generated, for projects under 10 kw on a rooftop system and 64.2 cents per kwh on a ground system (OPA, 2011).

Legal Protection

There are a number of considerations when choosing the method of business organization. The cost and ease of setting the business up is a factor, but in this case the most important factor must be the legal ramifications. There are going to be a number of employees, so a sole proprietorship makes little sense. Partnerships are inappropriate because of the downside risk associated with the business. A corporation is the most appropriate structure for this business because there are many risks inherent with solar panel installation and the principles need to be protected from those risks. In addition, incorporation gives the company the ability to raise capital going forward, should this be warranted for expansion into new products or markets.

We do not intend to design solar panels ourselves -- we will buy them from manufacturers. In addition, we do not anticipate having any significant intellectual property. Should any member of our company develop a unique product or unique method of installing solar panels, we will seek protection for the intellectual property that arises.

Inventory

The inventory that the company will have on hand will consist of solar panels, which would then need to be arranged in arrays, and the various pieces that go into the manufacturing and installation of the array. If we use Canadian Solar as our supplier, the product range will include: standard modules, BIPV modules, e-modules, inverters and the basic wires and metal framing that are required in order to house the solar panels. Within each type of module, there are different sizes and strengths available. All of these will be offered to consumers. We will also offer Canadian Solar's range of car battery charger, GPS, lights and other small solar systems for consumers.

The company is not expected to house significant inventory in-house. There will be some materials for framing and wiring in inventory, but the solar panels themselves will be ordered using a just-in-time ordering system. The reason for this is because the clients are going have custom-designed systems. The process of meeting with the client, doing a home visit and designing the systems takes days at best and usually weeks, providing ample time from purchase to installation to have the products delivered. We expect to use Canadian Solar, one of the world's largest solar panel makers and based in Kitchener, as our supplier. Thus, there is no need to keep solar panels in inventory.

One potential supplier, being the only major solar panel supplier from Canada, is Canadian solar. The company operates in seven countries and had worldwide revenue of $705 million in 2008. The company is listed on the Nasdaq exchange. Canadian Solar is based in Kitchener, which allows us to have a close relationship with our main supplier, being only an hour away.

CRM Policies

The company should have key performance indicators for customer service. These include customer satisfaction, customer intent to recommend, return customers, new customers, median revenue per customer and warranty costs. The customer feedback process will have two main parts. The first will be a phone call shortly after installation. A follow-up phone call and possible email survey will be conducted six months after installation, to gauge the degree of long-run satisfaction.