Solar Lights Assembly Unit For NGOs Charities SHGs PDF

Proposal for setting up Assembling Units
For
PV Solar LED lights
Detailed Project Report

Thrive Solar Energy Pvt. Ltd.
Plot No. 38/B, Phase I, IDA Cherlapally, Hyderabad - 500051.
Phone: +91 40 32901212, Fax: +91 40 27261212
Website: www.thriveenergy.co.in
Email: ranga@thriveenergy.co.in
Foreword
As per Census Report 2011, more than one lakh villages in India are yet to be electrified. Further,
more than 40 per cent rural households do not have access to electricity and largely depend on
kerosene for lighting. It is estimated that more than 13 crore school children use kerosene lamps
for studying after sunset.
Demand for power is growing exponentially. Industry and agriculture sectors are severely affected
on account of power shortage. In the short run it will be difficult to meet the energy demand
through already stressed out grid power. The need is therefore promote off-grid and renewable
energy so as to take power to remote areas. Even in electrified areas, frequent power outages;
suggest use of more renewable energy.
Solar Energy is emerging as a front runner amongst different sources of renewable energy because
of inherent advantages. It is an inexhaustible and free source of energy. India has the unique
advantage of having 300 plus clear sunny days. It has immense potential to tap unlimited solar
energy and become a world leader.
While solar energy could be linked to the grid, this Detailed Project Report (DPR) focuses on using
solar energy for home lighting through portable solar LED lights. The DPR would facilitate setting
up of localized solar LED lights assembling units by solar entrepreneurs, with analysis of the market
demand and setting up units with various capacities.
We hope this will propel setting up Solar LED light units across the country and taking light into the
lives of people who lack access to electricity. DPR also would help banks in financing for solar LED
lights assembling units. It would be a win-win situation for all stakeholders.
TAMASOMA JYOTIRGAMAYA
Dr. B. Ranganayakulu
DPR: Local production and assembly of quality solar led lights by SHGs/Microfinance organizations / cooperatives2
1. Introduction
1.1
Globally 1.7 billion people do

not have access to electricity
(www.lightingafrica.org). Out of
these 1.7 billion people roughly
25% are in India alone and rest
in other developing countries.
This is largely because in
developing
countries
Governments find the cost of
bringing the traditional grid
form of electricity to remote
villages
prohibitive;
hence
homes of many rural poor remain un-electrified. Once the sun sets, life in rural
households practically comes to a standstill, and everyday routine activities such as
cooking and dining become very difficult. Inadequate lighting is an impediment to
progress and development opportunities.
1.2
Majority of these people use kerosene lamp as their primary source of lighting followed
by dung cakes, firewood and crop residue after sun-set. Kerosene lamps are hazardous,
harmful to health, environmentally unfriendly (due to emission of greenhouse gases),
and also an expensive source of power. All these fossil fuel sources have direct impact
on the health, environment and safety norms. The deployment of Solar Light Emitting
Diode ('LED') lights means that life can go into extended hours after sunset under a
brighter, healthier, clean and
much more affordable light
which helps children to study,
village traders to work for more
hours and help women do more
productive work. Use of solar
energy in livelihoods can make a
huge difference to farmers,
weavers, craftsmen, fishermen
etc., with their earnings going
up significantly
1.3
The need is addressed through initiative on the basis of an entrepreneurial model of

energy service delivery and also through institutional mechanisms at District/Taluk
Levels. The entrepreneurial model benefits the user and it can sustain the whole
process. The individuals or Self-Help Groups are trained to manage and run a solar
assembling unit, charging stations. The model facilitates entrepreneurship development
among rural communities apart from providing reliable and ensured lighting to
households.
1.4
These types of rural technology models are more sustainable when they are promoted
as an enterprise model, which gives opportunity for income generation, in addition to
meeting basic needs.
The proposal discussed the profitable business model of setting up of an assembling unit
and also its impact in the society.
2. Indian Scenario
2.1
In India, it is estimated that more

than 7.5 crores households have
no access to the electricity and
use kerosene for lighting which is
dangerous from health point of
view. Annual expenditure on
kerosene for lighting in India is
approximately INR 200 Croresin
rural areas. Need to develop
mechanism for making rural India
free of kerosene by transfer of
kerosene subsidy to solar lantern and solar home lighting System. Approximately 2.7-3.7
Crores solar lanterns and 1.9-2.9 Crores solar home lighting systems shall be required for
making India free of kerosene.
2.2
About 16% of villages are un-electrified, approximately 95,000 villages. These villages of
India are deprived from modern equipment such as TV, computers and mobiles.
Therefore, these villages are socially and economically backward. Solar PV micro- grids
can be set up in the villages for betterment of lives of rural India in solar resource
regions. 42,750 villages may be electrified having 150- 200 households. The potential is
around 3000 MW.
2.3
90 lakh diesel pump sets have been deployed by farmers for irrigation in India. Out of
these 90 lakh pump sets, 45 lakh diesel pump sets are located in solar resource regions
and have the land for installation Solar PV system. Average capacity of pump is 3.73 KW,
and total potential of these pumps comes to 16,785 MW.
2.4
4,00,000 telecommunication towers are installed in India, out of which 84,000 telecom
towers powered by diesel generating sets are located in solar resource regions and
having land for installation of solar PV. Average capacity of diesel generating set is 4KW;
the total potential comes to 336 MW.
2.5
Off-grid solar PV has a bright future in India. Mainly, three factors will collectively work
and increase off- grid potential several times in India. First factor- limited land resource
in India restricts utility scale solar PV end use sector, Second factor- electrifying remote
villages is not techno-economically feasible, since requires long transmission and
distribution lines which involve heavy capital expenditure, and third factor - economic
and population growth of the country will increase supply and demand gap of electricity,
this increasing supply and demand gap would substantially increase in off-grid potential.
As per IEA, Technology Roadmap, Solar Photovoltaic Energy 2010, off- grid solar PV
potential of the world would be 463 GW by 2050, India would have potential of 20 to
25%, 92 GW to 115 GW by 2050.
2.6
India has the highest off-grid potential in the world, therefore, there is need to develop
strong R&D on offgrid solar PV to enable to provide minimum requirement of
electricity to the rural peoples at reasonable and affordable rates. Government of India
and the State Governments need to encourage off-grid solar PV system in India, by
providing capital subsidy and soft loans to phase out Kerosene and diesel from the
Indian scene.
(Reference: World Energy Outlook, IEA, 2011)
The demand and supply estimates for solar lights based upon Census Report 2011, is
given in the para Market Demand in the foregoing paragraphs.
3. Alternative Low Cost Lighting Solutions for the Poor

3.1
Role of Solar and LED Technologies
3.1.1
Solar technology coupled with LED technology has made it possible for
entrepreneurs in the lighting industry to come up with innovative low cost lighting
solutions for the off-grid poor around the world.
3.1.2
The impressive growth of the photovoltaic market, mainly driven by European

interest for this technology, has led to a large scale decrease in prices of solar panels.
Solar Panels of different sizes are now available even in small towns and cities of the
developing world at a very low retail price of about US$ 1 (INR 60/-) per watt.
3.1.3
Solar panels, when coupled with Light Emitting Diodes (LEDs), which are durable
semiconductors under Solid State Lighting, provide one of the worlds most energy
efficient light sources. White LED commercial bulbs have today reached efficacies of
180 lm/W, comparable to the efficacies of certain fluorescent and high intensity
discharge (HID) lamps, LED bulb efficacies will only continue to get better. LED lights
use approximately 10% of the energy consumption of incandescent bulbs (normal
light bulbs) and 40% of the energy of compact fluorescent
lamp (CFL) bulbs. LED lights have very low failure rates (less
than 1 in every 1000) and consume very little power (either
from the grid or from solar recharging). Few years ago, a
one watt solar panel could not do anything by itself, and
probably they were not even made for any consumption.
But, today with LED technology even a half watt solar panel
can be put to use with a light that delivers 30 to 60 lumens
of light without fail every day.
3.2
Solar LED lights- User benefits
Provide clean and reliable

lighting to rural / tribal
homes.
Eliminate air pollution in

the homes by replacing
kerosene lights. A recent
report by the World Bank
suggests that indoor air
pollution from kerosene
results in 16 Lakh deaths
worldwide every year. The
World Bank also notes that 78 Crore people in the developing world, mostly
women and children, are exposed to kerosene lantern fumes, which are
equivalent to two packs of cigarettes a day.
3.3.
Reduce the incidence of Malaria, by not attracting mosquitoes to its LED lights
unlike kerosene lamps.
Reduce the cost of lighting. Despite Kerosene being heavily subsidized in India, it
still consumes nearly 4% of a rural Indian household's budget.
Provide the right ambience for women while cooking and dining and improve
their lifestyle and productivity.
Provide safety / security for women and children walking at night in the dark.
Help children study at night.
Help women and men do any vocational activity that can be done from homes in
the night and thereby raise their income.
Saving on Government Kerosene Subsidy:

In India, the Central Government through State Governments provides subsidy to
households on kerosene consumption. This subsidy costs the government in the
minimum INR 90/- each month or INR 1,080/- each year per family. LED lights when
marketed through governments and NGOs at the rate of INR 1,200/- will result into
large scale saving of the subsidy component for the government. For every solar LED
home light that the government provides to households, it can save INR 1,080/- per
annum. This saving for the government comes with the extra hidden social and
health benefits of using Solar based lights.
3.4
Solar LED lights- Environmental benefits:

The use of Solar LED lights will reduce the environmental damage that kerosene
lighting creates. Using a LED light in place of a kerosene lamp saves one ton of
carbon emissions over 3-4 years, which equates to INR 1200/- of gold standard
carbon credits. The use of 1 Crore LED lights in place of 1 Crore kerosene lamps
would save an estimated 1 crore tons of carbon emissions.
4. Thrive Solar Energy Private Limited

4.1
It is in this innovative space that organizations like THRIVE SOLAR have come to play.
THRIVE SOLAR helps the needy by providing them with lights that use very small and
low cost solar panels and low watt LED lights. These lights are not only less expensive
and reliable but much brighter and safer than kerosene lamps.
The Company was formed and incorporated as Thrive Energy Technologies Private
Limited under the Companies Act 1956 in India on 24th February 2007. On May 19,
2013, it was renamed as Thrive Solar Energy Private Ltd., (THRIVE SOLAR). The
Companys Headquarters is located in Hyderabad, Telangana, and is focused on
designing and developing high quality, low-cost LED home lights that help serve the
millions of poor in inaccessible areas in Asia and Africa. The complete profile of THRIVE
SOLAR is attached and is a part of this proposal.
4.2 Creation of Social Entrepreneurs at village level:

THRIVE SOLARs sustainable
business model in rural villages
includes the creation of
employment opportunities for
local entrepreneurs. For every
1,000/1,500 lights that THRIVE
SOLAR sells in the village,
THRIVE SOLAR trains one
person to be fully employed
for maintaining and charging
its lights and for every 1,000
lights sold, one person is
trained to be fully employed in servicing the lights. THRIVE SOLARs vision is to promote
and develop light entrepreneurs around the world.
4.3 Healthy substitute for urban emergency lights:

Though primarily intended and targeted for rural communities, erratic power supply in
urban areas provides ample market for solar LED lights in urban communities as well.
LED lights of THRIVE SOLAR provide effective substitution in the time of power cuts and
compare favorably (both in performance and cost) to other emergency lights in the
market.
5. Estimated Social, Economic And Environmental Impact Of

Thrive Solar Products
5.1
THRIVE SOLAR, by virtue of its

presence in the market for
some time, has guesstimates of
the social, economic and
environmental impact of the
sale, installation and use of its
products.
THRIVE
SOLAR
believes that by the use of 50
lakh THRIVE Solar LED Study
Lights can improve the literacy
levels of that many rural
children and ultimately enable
these children to compete with urban children to become professionals-engineers,
doctors, policy makers, legislators or businessmen. The use of 20 lakh ACCENDO Solar
LED Mini lights can improve women's economic productivity by 10 to 30%. 15 Lakhs
ACCENDO Solar LED Home Lights can improve home and outdoor productivity in the
villages, and help improve the incomes of households. 50,000 village streets lighted up
would mean better ambience, safety and security to women, and reduced alcoholics
moving around in the villages in the nights. The sale of 100,000 Hawker lights for
fishermen, weavers, small businesses can improve their daily earnings by 10 to 20%.
5.2
On the whole, THRIVE SOLARs ambitious sale of 1 crore lights can save 72 Crore liters
of kerosene a year or 20 Lakh tons of carbon pollution every year Also, 1 Crore lights
spread over at least 10,000 villages provide employment opportunity to 10,000 village
youth. Though measuring social impact of the lights is difficult, it is easy to visualize the
value of a reliable light to the emotional safety of old or sick people, children or small
businesswomen who make a living with meager incomes.
6. Market Demand
It is estimated that the demand for LED home lights will be 10 Crore units in the next 5 years.
THRIVE SOLAR's business plan assumes that it takes just 2% of this (20 Lakhs lights).
Considering that THRIVE SOLAR today has the largest LED home lights base installed in the
country, the projected market share seems to be extremely conservative given the capital
injection. The growth opportunity to provide LED lights is comparable to the growth
opportunity in mobile phones that existed 10 years ago.
6.1 Opportunity 1 Supply of Solar Home Lighting Systems

As per Census of India 2011 Report, the consolidated picture about Source of Lighting
for all the households in India is given in the following table.
Total Number of Households (in Crores)
Percentage of households having:
Electricity
Kerosene
Other Sources
No Lighting
24.67
67.20%
31.50%
0.80%
0.50%
16.59
7.76
0.20
0.12
The further breakdown of the above information into Rural and Urban segment validates
the market demand estimated above.
Total Number of Households (in Crores)
Rural 16.78
Percentage
No. of
Households
% of households having
Electricity
55.30%
9.28
Kerosene
43.20%
7.25
Other
1.00%
0.16
Sources
No Lighting
0.50%
0.09
Total
100.00%
16.78
Total Population Size Rural ( in Crores)

No. of Households in Rural
Average Number of Persons per Household
No. of Households who have Kerosene as Main
lighting source (in Crores)
24.67
Urban 7.89
Percentage
No. of
Households
92.70%
6.50%
0.50%
7.31
0.51
0.04
0.30%
100.00%
0.03
7.89
83.38
16.78
4.96 say 5 Persons per
Household
7.25
No. of Persons who are exposed to kerosene
7.25 Crores x 5 = 36.25

Crores persons
Out of the 7.25 Crore households who have Kerosene as main lighting source (in India) if
2% market is targeted it results to supply of 14.50Lakhsolar LED lights. Those households
who are categorized under Electricity (9.28 Crores households in rural areas) also do
not have regular grid power supply and the erratic power supply forced them to use
alternative energy. 90% of households do not have regular supply of grid power. Even
1% of market from this segment is targeted it results to 9.28Lakh. Thereby, the target of
THRIVE SOLAR of 20 Lakh Lights can be considered quite conservative.
6.2 Opportunity 2 Setting up Assembling Units

Creation of entrepreneurship among the rural households is one of the primary goals of
THRIVE SOLAR. The total rural population as per census 2011 is estimated at 83.38
Crores and the number of villages is 640,867.
Total Population Size Rural in Crores
No. of Districts in India
Number of villages
Number of proposed Assembling Units
No. of Rural Households using Kerosene in Crores
Average Number of households that can be served by
each manufacturing/Assembling Unit
83.38
640
640,867
500
7.25
1,45,000@@
@@This is the opportunity available for the entrepreneurs in the villages for setting up
an manufacturing/assembling unit with backup service facilities ensuring regular O&M
to the lights manufactured/assembled.
The feasibility of the opportunity is discussed in the foregoing paragraphs.
6.3 Promoting local production in a block or a large village.

Although on a large scale, lights (almost 1000 Million+ for all varieties) can always be
produced in large factories like mobile phones and others, THRIVE SOLAR believes in
promoting their production in small block HQ or large village through women groups,
cooperatives, federations and others. Advantages of this approach include:
1) Women groups are empowered with technology, finance and with host of other
skills.
2) Knowledge of production, business and host of other formalities of doing quality
work, will spin off into other businesses by the women or their peers.
3) Service and maintenance support is available to the customers from the
manufacturer themselves or their trained village level technicians and this is all done
locally.
4) The production processes are made simple.
5) The required capital is reasonable.
6) The space and power requirements are also limited.
7) They can easily market them in their area/block/district.
8) With little training any unskilled women groups can start producing the lights.
6.4 Proposed Intervention

Thrive solar proposes to help set up around 500 SOLAR LED lights manufacturing and
assembly centers in India to help empower women, provide local employment, increase
the work skills and provide for kerosene free and well lighted rural India.
However the production is simplified, processes can be mastered, the skills can be easily
acquired, but the critical issue is to market the lights in reasonable quantity. It all
depends on how much they can market the lights in local area or in
The production size, teams, finances, machinery, marketing plans and other details are
discussed in the ensuing paragraphs.
It is proposed to set-up facility of assembly of lights and sales with less manpower and
capital.
6.5 Proposed Product for Assembling Unit and its features:
Front Side
Back Side
TM
Brand
Description
Lighting Hours on fully charged
Battery 2 lighting modes
ACCENDO
Mini Solar LED Light
Normal Mode
10 Hours
Technology
Product specifications
LED Wattage
Battery
Solar Panel
Body
Circuit
Warranty
High Bright Japanese LED technology
High Bright Mode
5 Hours
0.5 Watts
1200 mAh
0.5 Watts
ABS Plastic
Microprocessor based electronic circutory
Product warranty of 6 months against any
manufacturing defects
Product features
Advanced and innovative design with 0.5 watt embedded solar panel for charging
Uses the worlds best LEDs from Nichia, Japan
Light bright enough to match 2-3 kerosene lanterns and oil lamps
Eco-friendly light with zero emissions No smoke, fumes, soot etc
Safe for everyone use
6.6 Technical Aspects:

6.6.1
Process of Manufacture/Assembling:Solar LED lantern consists of Cabinet, LED PCB, Main PCB, Battery,, Cables, Solar
Panels and other accessories. After checking all these items and their value, the kits
will be provided to the assembling Units by THRIVE SOLAR in set of 100. The Unit
assembles and solders on the terminal strip/PCB etc. The PCB is mounted on the
cabinet along with the components. Electro-mechanical components are fixed.
After the wiring is completed, the product is finally thoroughly tested for its specified
output voltage/current/illumination and reflection etc., before packing the product
for dispatch. The packing material also will be provided by THRIVE SOLAR.
6.6.2.
Capacity per Annum:THRIVE SOLAR proposes Solar LED Light Mini Accendo a range of 1,000 to 10,000
lights per month @ INR 200/- normal price and @ INR 250/- at higher price. The
capacities get readjusted as per the supply/demand position.
6.7 Financial Aspects:6.7.1.
Basis and Presumptions for the Proposal
The salaries and wages, cost of kits, utilities are based on the prevailing rates.
The cost factors are likely to vary with time and location.
The cost of machinery and equipment refer to particular make presumed as
approximate.
The essential equipment required for the unit have been indicated with diagrams
wherever necessary.
6.7.2. Fixed Capital:

Premises: - Rented Premises @ INR 2000/- per month taken into expenses. Six months
advance rent i.e, INR 12,000/- as taken as pre-operative expenses.
Sr. No
1
2
3
4
5
6
Description
Office space
Assembly space
Store for raw materials and
finished goods
Loading and unloading area
Bathroom
Others
In Sq. Ft.
100
400
100
100
50
50
Except some Civil works of INR 50,000/- (taken as a pre-operative expenses) no other
fixed cost is envisaged for Premises. Total pre-operative expenses = INR 62,000
6.7.2.1.
Sr.
No
1
Machinery and Equipment:Description

The automatic injection molding
machine (horizontal type or
vertical type) The machine is
used to obtain molded product
by injecting plastic materials
molten by heat into a mold and
then cooling and solidifying
them/..
The machine can produce around
300 sets a day easily
Sourcing
The machine is
available in India in
many models and
dealer network is
available
with
service maintenance
contracts in
all
important
cities/towns in India.
The plastic pellets
can be procured
locally or obtained
from Thrive Solar,
Hyderabad
Cost in INR
3,00,000
Screen Printer
The material is
Daily 1000 stickers can be made available locally as
with one person
that is the same
screen
printing
material
10,000
Good quality ironing station
10,000
Power screw driver
Dies/Molds
Available in India
across all important
Cities/major towns
5,000
Mold- 1
2,00,000
Total cost
6.7.2.2.
5,25,000
Furniture Items.
Sr. No
1
2
3
4
5
6
7
8
Type
Office table
Office Cup-Board
Assembling table
Packing table
Solar table
Chairs - office
Chairs - Assembly
Storage racks
Total
Cost and locally

available (INR)
3,000
4,000
5,000
5,000
5,000
3,000
7,000
15,000
47,000
A) Total Fixed Cost (6.7.2+6.7.2.1+6.7.2.2) = with only One Mold

Sl .No.
1
2
3
Item
Amount in INR
Preoperative expenses +civil
62,000
works
Machinery and equipment
5,25,000
Furniture
47,000
Total
6,34,000
6.8 Working Capital (per month)

i) Production Staff Required And Budget:
Assumption:- Monthly output volume 1,000 lights to 5,000 lights.
For additional production, we need to increase the Sr. No 4 solar tabbing and stringing
and lights assembly teams by 1 each or 2 each as per the increase in scale of production.
Sr. No
Description
Strength
(Nos.)
Salary per
Month
(INR)
Total
Salary
(INR)
Accounts and office
5,000
5,000
4,000
4,000
Transportation
and
material
coordination
Office cleaning and security
3,500
3,500
Solar tabbing and stringing
4,000
8,000
Lights Assembly
4,000
8,000
Packing
4,000
4,000
Screen print and others
4,000
4,000
Marketing
4,000
4,000
Total
10
Add Perquisites
Total
40,500
4,500
45,000
For capacity of 5,000+ more lights, additional cost to be incurred.

Sr. No
Description
Strength
(Nos.)
Salary per
Month INR
Total
Salary
INR
Solar tabbing and stringing
4,000
8,000
Lights Assembly
4,000
8,000
Marketing
4,000
12,000
Total
28,000
Add Perquisites @10%

Total
3,000
31,000
ii) Raw Material Required :

The kits will be provided by Thrive Solar in a box of 100 sets to the nearest railway
station or through door-to-door first class approved couriers. The KITs include
Battery, LED PCB, Main PCB, Cables, Packing Box, Solar Panels, Glue and others,
Screws.
Each KIT will be supplied @ INR 125/- . At different scales of production, the total
costs of kits would be as follows.
Sl.No.
1
2
3
4
5
6
No. of Units planned per Per Unit Total KITs cost

month
Kit cost
1,000
125
1,25,000
1,500
125
1,87,500
2,000
125
2,50,000
4,000
125
5,00,000
6,000
125
7,50,000
10,000
125
12,50,000
iii) Utilities (per month) in INR

Power
Water
Total
2,000
500
2,500
iv) Other Operational expenses (INR per month)

Office expenses
Taxes
Transport and conveyance
Marketing
Repairs and maintenance
Rent
Miscellaneous
Total
5,000
1,000
5,000
5,000
3,000
2,000
4,000
25,000
Total Recurring Expenditure = (i)+(ii)+(iii)+(iv)= INR45,000+5,00,000+2,500+25,000 =

INR 5,72,500/Please Note: For Item ii the production scale is taken at 4,000 Units.
Total Capital Investment:
A Fixed Capital
B Working Capital on 2 Months basis
Total
6,34,000
11,45,000
17,79.000
6.9 Financial Analysis

(i)
Cost of Production (per annum) 1st Year

Total Recurring Expenditure (INR 5,72,500* 12)
Depreciation on Machinery and equipment at 10%
Depreciation to tools, jigs, dies and fixtures at 25%
Depreciation on office equipment and furniture at 20%
Interest on capital investment at 12%
Total Cost
68,70,000
30,000
56,250
9,400
1,63,088
71,28,738
(ii)
Turnover (per annum) shown at different capacities
Sl.No.
1
2
3
4
5
6
No. of lights
per Month
1,000
1,500
2,000
4,000
6,000
10,000
No. of lights Revenue @ normal

per year
price of INR 200
12,000
24,00,000
18,000
36,00,000
24,000
48,00,000
48,000
96,00,000
72,000
1,44,00,000
1,20,000
2,40,00,000
Revenue @ normal
price of INR 250
30,00,000
45,00,000
60,00,000
1,20,00,000
1,80,00,000
3,00,00,000
Note: For computation purpose, the Turnover is taken at 48,000 Units per Annum (i.e.,
4,000 Units per month)
(iii)
Net Profit (per annum) (before taxes)(amount in INR)
At Scenario of
Sale Price per
Light
At 200/At 250/-
Turnover per
annum
96,00,000
1,20,00,000
Cost of
Production as
per above table
71,28,738
71,28,738
Net profit
24,71,262
48,71,262
Net Profit
ratio
25.74%
40.59%
Breakeven Analysis and Revenue at Different Levels of Sales

(Reference: Table 6.9 ii (Turnover) Per Annum)
Sr.
No.
No of
lights per
year
Total
Total Revenue
Revenue
(INR 250/- per
(INR 200/- per
unit)
unit)
Scenario I
Scenario 2
Total Cost
INR
Profit
INR
Profit
INR
Scenario 1
Scenario 2
12,000
24,00,000
30,00,000
23,70,000
30,000
6,30,000
18,000
36,00,000
45,00,000
31,20,000
4,80,000
13,80,000
24,000
48,00,000
60,00,000
38,70,000
9,30,000
21,30,000
48,000
96,00,000
1,20,00,000
68,70,000
27,30,000
51,30,000
72,000
1,44,00,000
1,80,00,000
41,58,000
77,58,000
1,20,000
2,40,00,000
3,00,00,000
1,02,42,00
0
1,62,42,00
0
77,58,000 1,37,58,00
0
Additional Points:
(a) The project profile is prepared taking into consideration the average individual
entrepreneurship qualities/capacity, production programme, local characteristics
generally applicable to towns/village clusters.
(b) The other sources income through the assembly unit like mobile charging stations,
lamps on rents etc., are not taken into consideration while arriving the net profit. This
will be additional income for the entrepreneurs.
(c) The utilities of power, water etc., are taken on average basis. The escalation costs can
be easily borne from the surplus available.
FINANCING THE ASSEMBLING UNITS:

There are quite a number of financial assistance linkages available in India. Some of the
reliable options are given below.
1.
2.
3.
4.
Commercial Banks / Regional Rural Banks (RRBs)/Co-Operative Banks

Microfinance Institutions
Private Financing Modes
Grants used as rolling fund or a margin money support for loans
The financing through Banks is the best option in view of the following.
1. Solar home lighting systems and other off-grid systems have been included under
Priority Sector Lending based on the guidelines by the Reserve Bank of India.
2. Set guidelines exist for Interest Rate applications, quantum of finance, refinance
schemes for the Banks for such lendings from NABARD.
3. The sanctioning authority mostly rests with the Bank Manager in view of the priority
guidelines.
4. Most of the nationalized banks have wide network of their branches and easily
accessible.
The assembling units are categorized as Service Enterprises for the purpose of lending and
further categorized as Micro Enterprise (where the investment in equipment does not
exceed INR 10 Lakh); Small Enterprise (where the investment in equipment does not exceed
more than INR 10 lakh but does not exceed INR 200 Lakhs)
The following are common aspects that Banks look into before financing the unit.
What is the amount of loan required?

What will the loan mean to the borrower from the profit point of view?
When and how will the loan be repaid?
Where will the funds come from for repaying the loan?
What is the borrowers commanding areas and demand for the SHLs?
How will the borrower bring in the required margin money?
Does the borrower have the necessary technical skill to handle the PV systems and
its maintenance? How will he/she upgrade the skills?
Has he/she properly assessed the special features such as number of lights required,
demand for next two or three years?
Are there any additional sources of income for the Unit like through rentals of the
lights, through dealer commissions, mobile charging fees, any surplus from other
sources etc.,
What are the terms of sales by the Assembling Unit to the village people? Any
support from Self Help groups is available?
Interest Rates:
The category of the borrower, quantum of the loans, repayment capacity of the borrower
etc., determine the rate of Interest to be charged on the loan borrowed.
However in many cases, the interest rate is regulated as the loan is categorized under
priority sector lending and refinance is normally available for such loans.
Applicability of JNNSM scheme:
The main objectives of the scheme are to promote off-grid applications of solar energy and
create a paradigm shift needed for commodization of off-grid solar applications. The margin
money, loan period and rate of interest on the loans will be based upon the capital subsidy
scheme by NABARD through Regional Rural Banks and other Commercial Banks for solar
lighting systems.
Calculations On Availment Of Bank Loan Facility.
Assumptions:
1) No collateral security assumed as per the present banking norms available to Micro
enterprises.
2) Capital Cost+2 months working capital Cost are capitalized as WCTL.
3) Margin is pegged at 20%. Margin money also can be brought by MFI to support the unit.
However in the present case it is not assumed.
4) Interest Rate is assumed at 12%.
5) For calculation purpose the turnover of 4,000 lamps per month is taken into
consideration as worked in preceding paragraphs.
Calculations of Bank Loan

Sl. No.
Component
1
Fixed Cost
2
Operational cost for 2 months cycle
Total
Bank Loan (80%)
Margin
Interest on Bank Loan (WCTL)
Amount in INR
6,34,000
11,45,000
17,79,000
14,23,200
3,55,800
12%
Repayment Schedule:
Year
(1)
1
2
3
4
5
Loan
Net Income (at Principal
Interest
Net
Outstanding 200/- per lamp)
Surplus
(2)
(3)
(4)
(5)
(6)
12,33,952
27,30,000
2,26,848
1,63,088 23,40,064
9,78,334
27,30,000
2,55,618
1,34,318 23,40,064
6,90,297
27,30,000
2,88,037
1,01,910 23,40,053
3,65,730
27,30,000
3,24,567
65,369 23,40,064
nil
27,30,000
3,65,408
24,206 23,40,386
7.
The Effectiveness of the Assembly Units
7.1
Scope of the Model:
7.2
Identification and training of local individuals, youth, women, physical challenged and
also Self Help Groups (SHGs) on solar lantern assembling.
Installation of the solar lantern charging stations in the identified location.
Development of appropriate service model with provisions of training and capacity

building for participants.
Awareness generation among the communities on the benefit of the solar lantern and
its potential use for various livelihood generation activities.
Sharing and dissemination best practices.
Rural energy technologies are most sustainable when they are promoted as an
enterprise model, which gives opportunity for income generation, in addition to meeting
basic needs.
Employment Potential:
A centralized assembling unit one for each District/cluster
Provides employment for 10/20 persons unskilled and uneducated old and
handicapped
Assembly ranges from 1,000 to 10,000 Lanterns per month as per the size of the
Unit
Hiring of Lamps collection and Battery charging
Income from Charging of Lanterns
Have Dealers at various levels as collection agents
Mobile charging / lanterns / lamps for a fee
Facilities for local repair and service enhancing credibility
SHG / NGOs can provide market assistance
7.3
7.4
Advantages to the End Users:
Assurance of delivery across the counter, repair and maintenance of battery charge.
Greater faith in the product due to local entrepreneur managing the operations.
Easy availability by various product models
Pay per use or daily installments - choice is left with the end user
Acquisition of lantern by EMIs also.
Potential Assemblers
7.5
Uneducated, unemployed youth, women and handicapped adults

Skill set required is minimal.
Easy to assemble with minimal steps involved
Requirement of tools and space minimal
Thrive Solar Plans to Improve the Effectiveness

a. Through the training methods:
Thrive Solar plans to provide/arrange trainings in skill improvements both at the assembly
unit and also at the manufacturing facility of Thrive Solar in Hyderabad. The duration and
location of the training depends upon the efficiencies of the entrepreneurs. The Rural
Technology Project established at National Institute of Rural Development, Hyderabad by
Thrive Solar will be also a training centre for the proposed entrepreneurs.
b. Spares supplied by Thrive Solar:

Thrive Solar provides spares at an economical price (table given below) by direct or
through local franchisee arrangement.
Sr. No
1
2
3
4
5
6
7
8
Description
BATTERY
Led PCB
MAIN PCB
Cables
Packing box
Solar panels
Glue and others
Screws
Price in INR
40
15
35
5
4
40
2
c. Designing Floor Plan for the Unit:

Thrive Solar extends initial hand holding while setting up the assembly unit by designing
suitable floor plan for the unit keeping in view of the available space and utility sources.
The placement of furniture (tables and chairs, power points) would be used skillfully to
provide optimum performance.
Washroom
Office Cup-Board
Storage Space
Office Desk
Screen
Printing
/ Other
Assembly Table
Solar Table
Entrance
Packing Desk
Storage Racks
Women engaged in soldering
Women engaged in Solar panel

making
Microprocessor based advanced

Pick n Place machines
d. Ideas on Marketing the Lights:

The lights can be hand marketed, marketed through cooperatives, marketed through retail
shops with prior arrangements,
Particular NGOs/Individual Entrepreneurs who promoted this type of assembly line units
might have their own members/contacts. Generally NGOs service one or several districts
of India and have their own membership groups spanning into lakhs of households.
Schools in rural and semi urban areas.
Cooperatives of all types, like weavers, fishermen, handloom or any
Dairy federations and individual farmers(nomenclature vary in each state)
Small pan shops (they can use the light and as well make available for sale to their
customers)
Street vendors (they can use the light and as well make available for sale to their
customers)
Families in the vicinity of the factory
Gift ideas
Weavers, Fishermen, Handicraft makers
e. Sale and Service of other Thrive Products as indicated in the Annexure-B

The basic description of other products is given below.
1. Accendo Super LED Home Light: 3 Watt LED bulb, with 6V solar panel.
2. Accendo Solar LED Study Light: 1 Watt LED bulb with 2 x 1.2 V Batteries and 5.5V solar
panel
3. Thrive Solar Home Lighting Systems: Customized solutions
4. Solar LED Home Lighting Systems: Four bright LED lamps with a 6W Solar panel system
f. Proposed Maintenance and service of Lights

Warranty
General warranty of 6 months can be provided by the assembler on the lights

For items not in the warranty list, nominal service charge can be made from the light
owners so that the confidence in the local brand is increased.
Discounts and others

The assembler can provide for bulk discounts or commercial discounts or dealer
discounts within his own system
Payment terms
Cash basis or selective one month credit
Transportation method for Kits
By train or by the door to door service delivery system can be organized by the THRIVE
SOLAR
Urgent deliveries can be made for small quantities through Indian post parcel system
Operation instructions in Vernacular Languages (simple Brochures)

Further to the training to the entrepreneurs, operation instructions in vernacular languages
( simple Brochures) will improve the efficiency of the unit.
g. Other sources of Income:
The unit can also consider obtain dealerships to implement MNRE-NABARD subsidy scheme
under JNNSM which would enhance the earning capacity of entrepreneurs.
h. Major Activities surround assembling units:
Identification and training of local SHGs

Training to the selected women from the SHGs on solar lantern assembling
Installation of the solar lantern charging stations in the identified location.
Development of appropriate service model with provisions of training and capacity
building for the SHGs.
Awareness generation among the communities on the benefit of the solar lantern and
its potential use for various livelihood generation activities.
Sharing and dissemination best practices
A typical assembly unit in operation
CONCLUSION
In conclusion, Thrive Solar has the experienced team and facilities to support the proposed
assembling units by constantly providing affordable; quality kits with hand-holding till the
entrepreneurs acquire skill sets to make the Unit a truly profitable and sustainable venture.
For additional information on THRIVE SOLAR, please visit our website www.thriveenergy.co.in
and www.onechildonelight.org
Office Address:
THRIVE SOLAR ENERGY PRIVATE LIMITED
Plot No. 38/B, Phase I,
IDA Charlapally, Hyderabad - 500051.
Phone: +91 40 32901212, Fax: +91 40 27261212
Email: enquiries@thriveenergy.co.in
Website: www.thriveenergy.co.in | www.onechildonelight.org
Contacts:
Dr. Ranganayakulu B
Chairman & Managing Director
Mobile: 91-9866305772
Email:ranga@thriveenergy.co.in
Mr. Jagannath NV
General Manager (Finance)
Mobile: 91-9848053853
Email: jagannath@thriveenergy.co.in

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Proposal for setting up Assembling Units

Detailed Project Report

Globally 1.7 billion people do

The need is addressed through initiative on the basis of an entrepreneurial model of

In India, it is estimated that more

3. Alternative Low Cost Lighting Solutions for the Poor

Role of Solar and LED Technologies

The impressive growth of the photovoltaic market, mainly driven by European

Solar LED lights- User benefits

Provide clean and reliable

Eliminate air pollution in

Help children study at night.

Saving on Government Kerosene Subsidy:

Solar LED lights- Environmental benefits:

4. Thrive Solar Energy Private Limited

4.2 Creation of Social Entrepreneurs at village level:

4.3 Healthy substitute for urban emergency lights:

5. Estimated Social, Economic And Environmental Impact Of

THRIVE SOLAR, by virtue of its

6.1 Opportunity 1 Supply of Solar Home Lighting Systems

Total Population Size Rural ( in Crores)

No. of Persons who are exposed to kerosene

7.25 Crores x 5 = 36.25

6.2 Opportunity 2 Setting up Assembling Units

6.3 Promoting local production in a block or a large village.

6.4 Proposed Intervention

6.5 Proposed Product for Assembling Unit and its features:

High Bright Japanese LED technology

High Bright Mode

6.6 Technical Aspects:

6.7 Financial Aspects:6.7.1.

Basis and Presumptions for the Proposal

6.7.2. Fixed Capital:

Machinery and Equipment:Description

Good quality ironing station

Power screw driver

Cost and locally

A) Total Fixed Cost (6.7.2+6.7.2.1+6.7.2.2) = with only One Mold

6.8 Working Capital (per month)

Accounts and office

Solar tabbing and stringing

Screen print and others

For capacity of 5,000+ more lights, additional cost to be incurred.

Solar tabbing and stringing

Add Perquisites @10%

ii) Raw Material Required :

No. of Units planned per Per Unit Total KITs cost

iii) Utilities (per month) in INR

iv) Other Operational expenses (INR per month)

Total Recurring Expenditure = (i)+(ii)+(iii)+(iv)= INR45,000+5,00,000+2,500+25,000 =

6.9 Financial Analysis

Cost of Production (per annum) 1st Year

Turnover (per annum) shown at different capacities

No. of lights Revenue @ normal

Net Profit (per annum) (before taxes)(amount in INR)

Breakeven Analysis and Revenue at Different Levels of Sales

FINANCING THE ASSEMBLING UNITS:

Commercial Banks / Regional Rural Banks (RRBs)/Co-Operative Banks

What is the amount of loan required?

Calculations of Bank Loan

The Effectiveness of the Assembly Units

Scope of the Model: