Photovoltaic Plant Business Plan: Scenario and Opportunities

Creating a business plan for a photovoltaic system is one of the first steps to take when deciding to invest in this technology. The advantages of an industrial photovoltaic system are significant and of various kinds: environmental, economic, managerial, and more. However, relying on an established industry operator means making these advantages tangible, and above all, perfectly aligned with the specific needs of individual businesses. This is what a photovoltaic business plan presupposes: understanding not only the logic associated with a fluctuating energy market but also being able to apply it in every aspect to the specific benefit expected for a company that decides to embark on this virtuous path of energy transition.

What Is a Business Plan for a Photovoltaic Plant?

It is a document that describes all aspects of the project: market analysis, study of consumer habits and needs, financial planning, technical design, operational strategies, cash flows, and risk assessment. It is a useful tool for evaluating all aspects related to our investment, both in the short and long term. The installation of the system is just one aspect of the entire value chain related to renewable energy generation. Being able to rely on an operator capable of managing every single phase of the value chain internally is therefore essential to maximize the value of our investment. The methodology that Southenergy has been operating on for 16 years is based precisely on these assumptions, which we consider the only valid ones for ensuring that the investment truly generates value. We consider ourselves guarantors of our clients’ investment, regardless of the system’s power.

Here are the main elements of a photovoltaic business plan, as an example, to share the general principles.

Market Analysis and Energy Demand

This is a crucial phase, as it goes beyond simply assessing the availability of sunlight. It involves understanding the context in which the company operates, its historical and expected production, market dynamics, and consumption associated with the existing supply and their translation into the photovoltaic field.

As a first step, it is crucial to proceed with the analysis of historical energy consumption data of the counterparty, not only in terms of total consumption but also by analyzing specific consumption bands and their respective consumption peaks.

Identifying consumption time bands and current energy tariffs helps understand to what extent the system can contribute to energy savings, both for the portion of self-consumed energy and in terms of energy injected into and drawn from the grid. This phase allows for quantitatively determining the resulting economic and technical choices. In this phase, Southenergy operators analyze client specifications as a unique case, full of specific peculiarities, reconciling the result of this initial analysis with the expertise gained over more than 15 years of applying this methodology.

Evaluation of Technical Feasibility

After completing the market and energy demand analysis, the next phase is the evaluation of the technical feasibility of the project in accordance with the scenario and structural specifications learned previously. This means carefully examining the technical aspects to determine not only the project’s feasibility but also the best possible technical configuration.

Parameters to Consider

  • Latitude of the site: Depending on the geographical location of the site where the photovoltaic system will be installed, the optimal tilt of the photovoltaic modules will change.
  • Solar irradiance: This parameter indicates the energy of solar radiation incident on a unit area. Essentially, solar irradiance represents the density of solar energy that reaches the photovoltaic modules.
  • Efficiency of photovoltaic modules: Refers to the efficiency with which photovoltaic modules convert sunlight into usable electrical energy. With advancing technology, modern photovoltaic systems offer increasingly higher efficiency, allowing for maximizing energy production over a given installation area.
  • Orientation of modules: The orientation of photovoltaic modules, including inclination and angle relative to the sun, plays a significant role in the energy production of the system. Proper orientation of solar panels allows for maximizing the use of available solar energy, thus optimizing the overall performance of the system.

These parameters are fundamental elements to consider in the design and implementation of an efficient and productive photovoltaic system, as they allow for an accurate estimation of the system’s energy productivity.

Economic Feasibility Assessment

The economic feasibility assessment includes estimating the project’s expected costs and revenues. This involves determining the initial investment costs for design, material purchase, and system installation, as well as the expected operating costs for managing the system over time. At the same time, it is important to estimate the revenues derived from self-consumption of self-produced energy and from the relationship between our photovoltaic system and the traditional grid.

Cost Estimation

First and foremost, accurately estimating the initial investment costs is crucial to understanding the capital required to start the project. These costs may include equipment and material purchases, site preparation, design and installation costs, as well as administrative expenses consistent with legal obligations. A truly “turnkey” service cannot overlook comprehensive management of the aforementioned requirements: the risk is to overlook the project’s overall investment by focusing solely on installation costs, and then incurring unforeseen but necessary costs in the proper management of a system.

Revenue Estimation

Energy consumption plays a key role in determining the revenues derived from installing a photovoltaic system. One of the most significant ways to capitalize on the energy produced is through self-consumption. Additionally, forms of incentivization contribute to revenues, such as on-site exchange and dedicated withdrawal (Rid), incentive formulas for regulating the sale of energy.

“Management” Costs

A successful business plan cannot ignore a careful analysis of the costs related to the entire life cycle of the system, i.e., initial installation costs and ongoing management and maintenance costs. Proper cash flow management regarding this cannot ignore an assessment of the timing of when these expenses will occur, essential for managing the investment over time.

The above elements, along with other additional analytical variables, allow for determining whether the project is economically feasible and how to maximize the project’s profitability in the long term. Representing a precise payback period at the end of the analysis (estimating the time required for cash flows to generate sufficient income to repay the initial investment) is synonymous with professionalism and assurance of the investment.

Southenergy: 16 Years of Renewable Energy in Service of Your Photovoltaic Business Plan

Since 2008, Southenergy has been providing personalized solutions aimed at enhancing renewable energy sources, providing all the information and a personalized consulting path to companies and families. Discover the efficiency of our photovoltaic systems and the turnkey solutions we have reserved for those who have already chosen us: visit the section of our website dedicated to some of our projects. If you wish to get in touch with our technical staff for a free personalized consultation, contact us by filling out the following form. We will strive to identify the best solution for your energy problem.

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