Solar Farm Business Plan Template
If you want to start a new Solar Farm or expand your current Solar Farm, you need a business plan.
The following Solar Farm business plan template gives you the key elements to include in a winning Solar Farm business plan. It can be used for a solar energy business, renewable energy business, alternative energy providers and a solar panels business plan.
Solar Business Plan Sample
I. Executive Summary
Business Overview
[Company Name] is a privately held, family-owned solar farm that aims to provide renewable energy in the [Location] area. It will supply energy to both residential and commercial clients. The clean energy generated by [Company Name]’s 40 acres, displaces more than 30 million pounds of greenhouse gas emissions per year.
[Founder’s name], the brains behind this company, has a vision to make Photovoltaic Panels be the main source of energy for [Location] and its surrounding cities. The rising concern for the environment can be lessened by using renewable sources of energy, this is where [Company Name] comes in the picture. Our company has a team of experts in the solar farms industry that will provide the best and the most reliable services to all our clients.
Established in [Year], [Company Name] is making a name for itself in the photovoltaic industry. The company was founded by [Founder’s Name], who at a young age of [x], earned a Master’s degree in Science and Engineering at [University Name]. He has been working with big solar companies for more than 21 years, developing and designing solar panels. [Founder] has also managed similar businesses in the past and is now running one of the rising solar farm companies in [location].
Products and Services
[Company Name] will be a 40-acre solar farm that provides 14,000 megawatt-hours of nuclear, gas, wind, solar and hydroelectric energy per year. The company will provide clean, renewable energy to residents and commercial clients.
Customer Focus
[Company Name] will primarily serve the residents and businesses within a 10-mile radius of our location. The demographics of these customers are as follows:
- 50,336 residents
- 1,876 businesses
- 6 utility companies
- Annual utility spend/household=$3200
Management Team
[Founder’s Name] the founder of [Company Name] will be mostly in charge of managing the business and approving projects and product developments. His business partner, [Name], will be in charge of handling the company’s finances.
The team is composed of a Projects Manager, Head Engineers, Design and Construction Head, Marketing Head and Administrative Head. These people are the company’s spine, and they all work together to take the company to the next level.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- [Company Name] provides customized residential and business energy solutions. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to make use of our services when launched.
- Our location is in a high-wealth area and is environment friendly; customers here are interested in renewable and sustainable energy.
- The management team has a track record of success in the solar energy industry.
Financial Highlights
[Company Name] is seeking a total funding of $470,000 of debt capital to open its solar farm business. The capital will be used for funding capital expenditures, location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Research, product sourcing/purchase, and equipment: $170,000
- Business office design/build: $90,000
- Working capital: $210,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | $965,742 | $1,878,611 | $2,718,300 | $3,477,900 | $4,285,228 |
| Total Expenses | $390,241 | $630,018 | $931,935 | $1,171,906 | $1,429,992 |
| EBITDA | $575,501 | $1,248,593 | $1,786,365 | $2,305,994 | $2,855,237 |
| Depreciation | $8,720 | $8,720 | $8,720 | $8,720 | $8,720 |
| EBIT | $566,781 | $1,239,873 | $1,777,645 | $2,297,274 | $2,846,517 |
| Interest | $5,077 | $4,442 | $3,807 | $3,173 | $2,538 |
| Pre-Tax Income | $561,705 | $1,235,431 | $1,773,838 | $2,294,101 | $2,843,978 |
| Income Tax Expense | $196,597 | $432,401 | $620,843 | $802,935 | $995,392 |
| Net Income | $365,108 | $803,030 | $1,152,995 | $1,491,166 | $1,848,586 |
| Net Profit Margin | 38% | 43% | 42% | 43% | 43% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a privately held, family-owned company that aims to provide renewable energy in the [Location] area. It will supply energy to both residential and commercial clients. The clean energy generated by [Company Name] displaces more than 30 million pounds of greenhouse gas emissions per year. The company will also design and installs solar panels to residential homes and corporate buildings.
[Founder’s name], the brains behind this company, has a vision to make Photovoltaic Panels be the main source of energy for [Location] and its surrounding cities. The rising concern for the environment can be lessened by using renewable sources of energy, this is where [Company Name] comes in the picture. Our company has a team of experts in the solar farms industry that will provide the best and the most reliable services to all our clients.
[Company Name]’s History
Established in [Year], [Company Name] is making a name for itself in the photovoltaic industry. The company was founded by [Founder’s Name], who at a young age of [x], earned a Master’s degree on Materials Science and Engineering at [University Name]. He has been working with big solar companies for more than 21 years, developing and designing solar panels. [Founder] has also managed similar businesses in the past and is now running one of the rising solar farm companies in [location].
In [insert Month Year], [Company Name] has built a core team of experts that have the same passion for creating renewable and sustainable energy sources. These people are excellent in their own fields and love to engage, inspire, and empower the people through their innovations and ideas.
[Company Name]’s Products/Services
[Company Name] will be a 40-acre solar farm that provides 14,000 megawatt-hours of nuclear, gas, wind, solar and hydroelectric energy per year. The company will provide clean, renewable energy to residents and commercial clients.
III. Industry Analysis
Over the next five years, revenue within the Solar Farm industry is expected to grow tremendously. In general, the capital costs associated with developing and constructing a new solar farm are expected to fall substantially over the next five years due to an excess supply of solar panels as well as general improvements and advancements in solar power technology, which will reduce the per kilowatt-hour (kilowatt of electricity generated in one hour) cost of solar power. The key industry drivers include:
- Tax credits for energy efficiency – Tax credits generally encourage private investment into solar technologies by making development of solar energy projects cheaper. Demand for solar farm development will increase while the tax credit is in effect.
- Electric power consumption – Demand for solar power hinges primarily on the level of electric power consumption throughout the United States. Increased demand typically translates into growth in renewable energy implementation.
- World price of steaming coal – The price of steaming coal generally reflects demand for coal to produce electricity. An increase in the price of steaming coal leads to higher demand for alternative sources, including solar energy, to the benefit of solar farm developers.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediate surrounding areas as well as business establishments. The company will work closely with local utility companies and governments to provide the most sustainable, clean energy to its clients.
The area that we serve is affluent and are aware of the environmental problems that we are facing. The city is one of the most well-known cities in the US with the highest number of initiatives and movements for the environment.
Customer Segmentation
[Company Name] will primarily target the following customer segments:
- Local Government:Our goal is to establish close relationships with the city in order to become the city’s main source of clean, sustainable energy.
- Utility Companies: We will work closely with the local utility companies to deliver energy via our farms to local residents and businesses
- Homeowners: There are a large number of houses in the company’s location. We plan to reach out to these families and convince them that turning to a sustainable energy source is an investment that will benefit them forever. Their support will be key in reaching local government officials.
- Business Establishments: The company will look to the business community to lobby for clean, renewable energy sources and thus promote the use of our solar farm for energy
V. Competitive Analysis
Direct & Indirect Competitors
Solar Tec
Solar Tec is a privately held company that specializes in photovoltaic solar energy products. Specifically, the company develops, finances, designs, constructs, operates and maintains solar power plants, of which the company currently has 219 MW of solar power plants in operation. The company started doing business in the US market in 2009 and has developed and sold 55 MW of projects. Furthermore, Solar Tec has secured power purchase agreements for more than 100 MW of projects. Its international solar power plants in operation include South Africa, the Czech Republic, and Rwanda. In addition, Solar Tec has secured solar power sales contracts worth $2.4 billion through the year 2034
Vibrant Solar
Vibrant Solar is a solar power business that finances, designs, installs, and maintains solar energy systems to residential customers within the US. Vibrant Solar installs solar rooftop panels in California, Hawaii, Maryland, Massachusetts, New Jersey, New York, and Washington D.C and the company recently announced that it has begun to offer residential solar leases. The company is also looking to expand by targeting the following regions for photovoltaic installations: Europe, US, India, China, and South Africa.
Solar Capital
Founded in 2012, Solar Capital is a privately held, renewable energy company with a focus on solar power. The company currently has a project plan in place to install a 300 megawatt solar plant in cities across the U.S. Once constructed, the solar power plant will use single axis photovoltaic solar panels to generate renewable energy. The solar plant will power an estimated 80,000 homes in every city.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors including:
- High-Quality Services and Products: [Company Name] will work with the best engineers and designers to establish the most efficient solar farm in the region.
- Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 13 years, [Founder’s Name] knows all the local leaders, newspapers and other influencers that can help us reach our target customers.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering high quality renewable source of energy
- Giving high quality services and products to all of its clients
- In Depth industry knowledge and expertise
Promotions Strategy
[Company Name]’s target market are residents and businesses in [location]. The Company’s promotions strategy to reach these individuals includes:
Local Publications
[Company name] will create brand awareness through features in multiple local newspapers and publications. Regular advertisements will run to maintain exposure and build brand awareness to relevant markets.
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other enticements for people to avail our services.
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the benefits of renewable energy and solar farms and the unique value proposition of [Company Name].
Community Events/Organizations
[Company name] will conduct informative community discussions and seminars regarding the advantages of using sustainable energy. This seeks to educate people on the negative effects of nonrenewable resources on the environment, while simultaneously promoting our solar farm.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Service Functions
- CEO
- Operations Management
- Construction and installation
- Research and Development
Administrative Functions
- General administrative function
- Marketing and advertising
- Accounting
Milestones
[Company name]’s long term goal is to become the dominant solar farmer and renewable energy provider in [location]. We seek to the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Founder’s Name] the founder of [Company Name] will mostly be managing the business and approving contracts. His business partner, [Name], will be in charge of handling the company’s finances.
[Company Name] has built a core team of talented individuals who will help the company reach its goals. The team is composed of a Projects Manager, Head Engineers, Design and Construction Head, Marketing Head and Administrative Head. These people are the company’s spine, and they all work together to take the company to the next level.
Hiring Plan
In order to launch the solar farm business, we need to hire the following personnel:
- Operations Manager (2)
- Engineer (3)
- Marketing Officer (1)
- Administrative assistant (1)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from energy contracts.
The lease, research, maintenance and staff expenses are the key cost drivers of [Company Name]. Moreover, ongoing marketing expenditures are also notable cost drivers for the company.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $470,000 of debt capital to open its solar farm business. The capital will be used for funding capital expenditures, location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Research, product sourcing/purchase, and equipment: $170,000
- Headquarters design/build: $90,000
- Working capital: $210,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Clients per Quarter | Average |
|---|---|
| FY 1 | 28 |
| FY 2 | 56 |
| FY 3 | 80 |
| FY 4 | 100 |
| FY 5 | 124 |
| Annual Lease/rent (per location) | $50,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
