Solar Water Heaters Project - Essay Example

? Solar Water Heaters Project Business Case 0 Introduction Background With the ever increasing awareness to conserve the environment coupled with the ever rising cost of gas and electricity as well as other sources of energy, harnessing solar energy has become one of the major ways of using sustainable, renewable and cheap energy that is also environmentally friendly. Many residential houses as well as commercial buildings are increasingly installing solar panels for electricity generation as well as solar water heaters for provision of hot water. 2.0 Business Objective The objectives of this solar water heaters project is to empower the poor and low income group individuals by giving them an alternative source of energy that has numerous benefits including reduction of bill and gas costs by 95% because solar energy is free. All that the people have to do is install a solar water heating system and they are good to go. The other objective is provision of clean, environmentally friendly and renewable energy that is sustainable for the development of all in society as well as a major contribution to environmental conservation. The aim of the project is to formulate an action plan for the successful installation of about 150 solar water heating systems in Acton area. 3.0 Current Situation and problem/Opportunity Statement It is evident that our actions now have a huge impact on the environment in the future. The continuous use of fossil fuels has produced tones of toxic gases like carbon dioxide, carbon monoxide and nitrogen dioxide all of which have adverse effects on the ozone layer and the environment in general. We cannot deny that we are responsible for the current erratic weather patterns characterize by flush floods, bizarre heat waves and harsh droughts which bring about famine and the death of so many people as well as having a negative impact on the economy as certain sectors like agriculture are seriously affected due to the uncertain and harsh weather patterns. The continuous cutting down of trees for fuel, settlement, real estate development, logs and commercial agriculture has also gone a long way in contributing to the current crisis of global warming. People are now more than ever aware that their actions nomatter how simple play a significant role to the conservation or degradation of the environment and normal life as we know it and hence there are massive campaigns to go green by adopting to alternative sources of energy that are environmentally friendly and cost efficient at the same time. Solar energy is one of the known and widely utilized alternative energy that is renewable and free from nature. The other is natural gas. This is truly a win-win situation for all the stakeholders and an effort to reverse the current harsh conditions by conserving our environment for a better future. 4.0 Critical Assumptions and Constraints As much as there is growing awareness of the need to find and use alternative sources of energy, in this case solar energy through the solar water heaters, many people are still reluctant to adapting to this mode of energy. This project requires strong participation and cooperation from a wide variety of people so that people can be educated on the benefits of using solar water heaters. This project is capital intensive because of procurement and installation of the solar water heater system and customers view it to be expensive at first but the truth is that this cost is recovered over time as the electricity and gas costs go down considerably to make up for the installation and maintenance cost. 5.0 Analysis of Options and Recommendation To properly address this opportunity a massive awareness program should be carried out in Acton area to intensify the usefulness and benefits of using solar water heaters in residential places as well as in industries. Secondly a market research to identify potential and willing customers has to be done so as to ensure that all the 150 units will be sold out. 6.0 Budget Estimate and Financial Analysis A good solar water heater goes for between $1,000 and $3,500. The project aims at installing 150 solar water heaters at a total of $6,000 per house. The project will procure solar water heaters worth $ 3,500 each. The total expense for purchases will be $525,000. The actual cost of installing the solar water heater is $1,500 Therefore the budget estimate consisting of the total combined costs of procurement and installation of the 150 solar water heaters will be $750,000. The profit realized will be $150,000. Financial Analysis Month 1for 50 SWH Month 2 for 50 SWH Month 3 for 50 SWH Total Cost of Purchases 175000 175000 175000 525000 Cost of Labor 75000 75000 75000 225000 Total Cost 250000 250000 250000 750000 Appendix A Table of Financial Analysis A look at the PESTEL analysis of the business has the following results: the project is viable because it has a backing from the political spheres that advocate for the use of alternative fuels, economically, the costs of the solar water heaters is continually being made affordable to all so as to cater for many people and have a huge positive impact on the use of solar energy. Socially, many people are embracing the use of solar energy. Technologically, more and more innovations are being made on the use of solar powered items and different models of solar power compatible items are being churned out as time goes by, an example is the solar powered net books by Samsung which is now in the market and very popular with all the people. The environment is in need of such projects to lessen the reliability of fossil fuels. Legally the harnessing of energy from the sun has no legal consequences. A SWOT analysis on the business case also has a positive result. A look at the strengths where the main advantage/strength is that the solar water heater relies on the sun which is free for all an readily available every day hence it is renewable. The major weakness would be the high initial cost of installation and also that during certain seasons especially winter power from the sun will be greatly affected. Opportunities are ever present as more and more people get aware and see the importance of conserving the environment as well as reduce energy costs considerably. Threats that face this case are minimal if not non-existent. They threats are the production of low quality solar water heaters that need frequent repairs and maintenance and later on break down. This frustrates the customers who then turn to their old ways of relying on gas and electricity. A SMART analysis on the case also has a good result. The business case is specific as it focuses solely on solar water heaters. The objectives set forth are measurable because it is planned that 150 units are to be installed. The objectives are easily achievable through creating awareness as well as carrying out market research. The objectives are also relevant as the use of solar water heaters will reduce reliance of gas and electricity and help I environmental conservation as well as reduce the costs of the conventional energy sources that are ever increasing. The objectives are also time-bound because a project has to run on a schedule. Self monitoring of the ever growing market needs is necessary in order to keep up with the changing times. An analysis needs to be carried out to identify the market needs as well as improve on areas of weakness. There needs to be constant reports gotten from the analysis so as to interpret the data into meaningful information. Technology is also looking up because more and more innovations are being made in the solar powered industry where equipment is being designed to use solar power. References Ramlow, B. (2011). Solar Water Heating: A Comprehensive Guide to Solar Water and Space Heating Systems. New York : New Society Publishers. Read More