Project description
A Swiss entrepreneur founded an Inc. (AG) to distribute solar power systems in the German-speaking countries. EUR 6 million was necessary to build up the group of companies, which was raised by issuing shares to interested investors.
The company is gaining competitive advantages by focusing on marketing and sales (and less on technical aspects). It relies on the development of its own photovoltaic brand and on cooperations with well-known internet portals, through which numerous homeowners are won as interested parties.
By using solar cadastre data, a potential customer can immediately get an online calculation of how much a solar system on a specific house roof will cost and how big the annual savings there will be. A powerful sales force guides the prospective customer through the sales process and turns him into a customer.
Apart from the main target group of owners of private houses, commercial properties and non-profit buildings such as schools or kindergartens are also interesting targets. In addition, there are ground-mounted systems as well as charging stations for electric cars.
The attractiveness of the business model is flanked by the general conditions that prevail on the market: in German, electrical power is comparatively very expensive. Conventional energy sources such as nuclear and coal are being abandoned, and the German government has committed itself to achieving ambitious climate targets that are almost impossible to reach unless the expansion of photovoltaics is strongly promoted. All this speaks in favour of a tailwind for solar power plants.
We have structured the complex business model – it consists of six business segments – and prepared separate financial plans for each, consolidated them and calculated an enterprise value based on discounted future cash flows.
These calculation models and their textual description and discussion of the opportunities and risks of the individual business areas were core components of the investment memorandum issued to investors. Translated with www.DeepL.com/Translator (free version)
What banks look at in a photovoltaic business plan
Photovoltaic projects are assessed on yield and on regulation. The plan should show the planned capacity, the expected annual production, the feed-in or self-consumption model and the revenue assumptions for electricity over the lifetime of the project.
Investment costs for modules, inverters, installation and grid connection should be shown alongside operating costs for maintenance, insurance and monitoring. Sensitivity analyses on yield, energy prices and changes in regulation reveal how robust the project is.
Lenders typically examine the debt service coverage over the loan term and the security, such as the assignment of feed-in revenue. A transparent model makes this examination straightforward.
