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Kemah Power, LLC Business Plan

Prepared By: Travis Blomberg & Juli Lee

12/5/2011

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General Company Description

Kemah Power LLC is a start-up business based in Barrington, Illinois that offers

comprehensive services around mounting Vertical Access Wind Turbines (VAWTs) onto

existing structures. Kemah Power, LLC focuses on three services: VAWT consultation,

licensing, and dealership.

It is Kemah Power, LLC’s mission to provide the finest renewable energy solutions

regarding consultation, supplying, and licensing of Vertical Access Wind Turbines (VAWTs) on

an existing structure, such as conventional transmission towers, monopole towers, billboards,

road signs, utility poles, buildings, stadiums and the like. 1 In addition, Kemah Power, LLC will

also focus on development of more efficient ways of generating renewable energy in wind. The

company will specifically focus on research and development of its Power Tree2 structure for

this purpose.

Kemah Power, LLC will be led by Gregory Schmitt, an experienced Chief Executive

Officer of R.J. Schmitt and Associates, Inc. He has many years of experience in real estate.

Through a combination of wholesome education and good work experience, Gregory Schmitt

will be able to successfully execute the business plan for Kemah Power, LLC.

Kemah Power has identified three keys to its success. The first is the need to offer more

efficient solutions than competitors. The second is to offer solutions on an economically feasible

scale. The third is to establish an environmental bottom line.

Kemah Power, LLC envisions the environment it operates within to be sustained use by

future generations. Therefore, an environmental bottom line is crucial to its business operations.

Specifically, the company has focused on development in wind as a renewable energy source.

Kemah Power, LLC is able to bring innovative thinking into traditional renewable energy

concepts. As conceptualized in its patent3, Kemah Power, LLC will apply VAWTs, a smaller

type of wind turbine that captures wind from 360 degrees as compared to bigger horizontal

access wind turbines (HAWTs) that capture wind in one direction only, onto existing structures,

saving customers significant costs in the process. Kemah Power, LLC realizes that not only do

VAWTs capture more wind, are more affordable and useful to people without access to vast

amounts of land, but mounting them onto existing structures conserves land that can be kept in

its natural state.

Through a combination of strong management skills of Gregory Schmitt, a

comprehensive business plan, Kemah LLC will be a lasting and profitable business.

1 This is the patent Kemah Power, LLC applied for. Public No: US 2010/0230975 A1. Inventor: Gregory C. Schmitt.

Assignee: Kemah Power, LLC, Lake Barrington, IL (US). 2 Power Tree is a trademark of Kemah Power, LLC. The Power Tree was designed to allow multiple VAWTs

mounted on one structure, thereby maximizing the production of electricity, while minimizing the consumption of land: VIDEO: VAWT Power Tree. URL: http://www.youtube.com/watch?v=FXfcRzyXdSA. Trademark information available at http://www.trademarkia.com/power-tree-77741465.html 3 See footnote 4.

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Service and Products

Kemah Power offers a variety of VAWT services: VAWT consulting services, Patent

licensing services, and VAWT supplying service.

Consulting Service

Kemah Power, LLC will offer customers the uniqueness in purchasing its services in a

bundle. The consulting service is the first part of the bundle. During this phase Kemah Power,

LLC will provide information on mounting VAWTs on existing structures to customers

interested in generating energy through wind but who do not necessarily have the financial

resources of purchasing new land or allocating a certain amount of land per turbine for mounting

horizontal access wind turbines. Land prices vary across and between States. Consulting services

provide customers without broad financial capacity with an opportunity to generate wind energy

at their own business or community without committing to spending high amounts of money on

buying a HAWT or VAWT.

Kemah Power LLC will provide customers with a qualified engineer to test out

possibilities of mounting VAWTs on a structure the customer specifies. Consulting services will

then recommend a model of VAWT from our five suppliers. Their recommendation will be

based on factors such as stability, weight issues, and wind generating capacity of the VAWT.

Their recommendation will be the most optimal choice for generating wind energy in each

specific setting. Furthermore, Kemah Power, LLC will provide customers with a detailed

analysis of the local wind speed and electricity to project the rate of return. Recommendations

will vary depending on research of factors that vary across geographical locations in the United

States. These factors include: wind speed, type of VAWT-hosting infrastructure. In addition,

customer preferences for issues of aesthetics, total energy-generating capacity will alter

recommendations.

Consulting will be charged a fee that is bearable by both customers who are committed to

mounting a VAWT and to customers who are merely interested in learning more about the pros

and cons of mounting VAWTs to pre-existing structures.

Patent Licensing

This is the second type of service Kemah Power, LLC will offer. Purchase of any service

past the consulting services will be part of a binding contract to pay the licensing fee for the

Patent and for purchasing VAWT(s) from one of our suppliers. Kemah Power, LLC offers

consulting to help customers determine if the remaining two services are necessary. If mounting

VAWTs on pre-existing structures is desirable, then a licensing fee to use the Patent will apply.

Dealer/Distributor

Dealer/Distribution entails the use of VAWT suppliers guaranteed through contractual

agreements Kemah Power, LLC will have with local VAWT vendors. Specific names of VAWT

suppliers will be determined in the R&D phase. The goal is to source VAWTs locally so as to

lower carbon footprint from supply transportation. In the case no customer demand exists in an

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area that does not provide VAWTs locally, Kemah Power, LLC will offer one of its closes

suppliers.

Maintenance and Installation Servicing

This aspect of Kemah Power, LLCs’ servicing will be a partnership with local VAWT

installation businesses if installation is not already provided by the VAWT supplier. Technical

colleges might be a good source to look at for supply of skilled workforce who is capable of

mounting and maintaining wind turbines. Sourcing labor from local communities may be

appealing to customers if they are interested in promoting local jobs’ market. Kemah Power,

LLC strives to achieve win-win situations for its customers and for its local community.

VAWT Supplying Service

Kemah Power, LLC will provide consulting service to those who are interested in

sourcing energy from renewable sources, such as the wind. Kemah Power, LLC will specialize in

consulting interested parties on usage of pre-existing infrastructure to host one of the above five

VAWT models. There will be a detailed analysis of the wind power available in the locale, the

support system of the pre-existing infrastructure, and the rate of return for mounting type X

VAWT on such an infrastructure in such a locale. Based on recommendations by our engineer

and consideration for locale-related factors, Kemah Power, LLC will recommend a type of

VAWT. Extra models will be available as local VAWT suppliers are available and are willing to

strike a partnership with Kemah Power LLC. As of now, Kemah has identified six potential

VAWT models:

VAWT Model

Names

Company Weight Material

(Generator)

Swept

Area

Design

Life

See

Appendix

WindCharger

$7,000

Sauer Energy 125 lbs Rare Earth

magnetics:

NdFeB

5.5 square

feet

20 yrs 1

Gale T1-R15

$8,450

Tangarie

Alternative

Power

118 lbs High quality

aircraft

aluminum

6.24 sq. ft. 30 yrs 2

Helix Wind S

322 Wind

Turbine

$10,500

Helix Wind 295 lbs Ultra tough

Aluminum Alloy

34.33 sq.

ft.

30 yrs 3

Eddy

Urban Green

Energy

202 lbs n/a 25.4 sq. ft n/a 4

5

$8,650

Seahawk+

$9,000

PAC Wind 180 lbs n/a n/a n/a 5

Marketing Plan

Customers

Kemah Power LLC aims to market primarily towards owners of existing structures such

as conventional transmission towers, monopole towers, billboards, road signs, utility poles,

buildings, stadiums and the like. These structures can be owned by the public and or the private

sector. Within the first five years of operation, Kemah Power, LLC will seek to use $1 million

per year in grant funding to test the applicability of mounting VAWTs on existing public

structures in order to show that business around mounting on privately owned structures is

possible. As for the public sector, Kemah Power, LLC will focus on communities that seek to

begin a process of sourcing energy locally and from environmentally friendly sources. A focus

on billboard companies and cell tower owners will be critical to Kemah Power, LLC’s marketing

strategy. There are 170,000 cell towers, 450,000 billboards and over 100 million utility polls in

the United States.4 Potential private sector customers would also include individual customers

who are interested in installing wind turbine(s) on their own property.

Potential consumers at Kemah Power, LLC are interested in investing in renewable

energy because they care about their impact on the environment and constantly seek to lower

their carbon foot print. Kemah Power LLC provides them with that opportunity via its business

operation focus on three parts of VAWTs: consulting, licensing, supplying and providing

upkeep. These three sectors of business collectively enable Kemah Power, LLC to gain valuable

insight on the life cycle of VAWTs from the first decisions made to purchase them, to the

sourcing and transportation, to the installation and upkeep, and finally to the up-cycle potential

after significant wear and tear has been diagnosed by our outside partners focusing on

maintenance and installation. Kemah Power, LLC has the advantage of coordinating outside

maintenance work while being the conduit for consulting and licensing individuals or groups on

VAWTs and situation-specific mounting prospects. Coordination of its own divisions and

outside VAWT supplier companies ensures the public with transparency in business operations

so that progress of business profits and environmental sustainability can be measured

simultaneously. Kemah Power, LLC customers will be those who care about corporate social

responsibility and accountability. They will be keen on insisting best service and product

delivery in wind energy solutions.

Advertising

4 Identified by Gregory Schmitt and described in patent application.

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The target markets are billboard companies, stadium owners, municipality governments.

The Patent application indicates that any method for “mounting a VAWT to an existing

structure, such as conventional transmission towers, monopole towers, billboards, road signs,

utility poles, buildings, stadiums, and the like” fall under legal control of patent 12/720,377. We

will advertise to our target market by showcasing benefits of having locally controlled sources of

energy in comparison to privately-owned energy suppliers. Benefits of generating energy locally

include being able to reinvest profits back into local communities, which will create multiplier

effects that can strengthen other key local businesses as well as the labor market. Kemah Power,

LLC will advertise to billboard companies by elucidating the appeal of mounting a VAWT next

to an advertisement on the billboard, promoting the socially attractive idea that the billboard

company itself cares about the environment.

Kemah Power, LLC will stress the appeal of doing business and protecting the

environment to potential billboard, community and stadium owners etc. in product and service

advertisement. Specifically, Kemah Power, LLC will cite market researches and survey results to

support the success of this advertisement concept. To all parties in Kemah Power, LLC’s target

audience group, wind energy represents an additional energy source that will generate enough

electricity in the long-run to create extra income that will offset costs of mounting VAWTs onto

existing public structures. The company will stress this as an advertising point. In addition,

system design, blade speed, and environmental impact aspects of VAWTs in and of itself will be

good advertising points for the reasons listed in the next few sections of Kemah Power, LLC’s

market plans.

Potential Competitors

HAWT businesses are competing against us. Kemah Power, LLC realizes the potential

competition from suppliers, producers, and service contractors of Horizontal Access Wind

Turbines (HAWT). HAWTs generally have steeper power curves than VAWTs, but the slope of

the curve depends on the model. With steeper power curves, VAWTs can produce energy at a

higher rate, attracting consumers who need a higher amount of renewable energy. The following

graph illustrates the costs and benefits of choosing HAWTs vs. VAWTs:

Benefits/

Model

Potential for higher power

output

Shorter Rate of

Return

No need to purchase land and

mounting pole

HAWT X

VAWT X X

Competition is also based on location of Kemah Power LLC’s branch distribution.

Renewable energy is attractive to customers who want to lower their ecological impact.

Suppliers of solar energy products and services could be a competitor depending on the location

of reference. Kemah Power, LLC would face less competition in Wisconsin than in California

from solar energy service and product suppliers. Suppliers of alternative renewable energy

sources could also be potential competitors based on the availability of the renewable energy

source in question. Traditional Horizontal Access Wind Turbines’ (HAWTs) product and service

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providers provide the biggest challenge to Kemah Power LLC’s market. Customers interested in

wind energy may be indecisive on purchasing a HAWT or a VAWT. In this case, it helps to

identify a few outstanding unique qualities of VAWTs over HAWTs.

Differences

Kemah Power, LLC holds a competitive edge against competition from other energy

solution businesses in three ways, two of which are inherent qualities of VAWTs: system design

and blade speed and the third being an inherent quality of providing service and products around

renewable energy sources: environmental impact.

System design

Vertical access wind turbines are designed to be non-intrusive. Their compact design

enables the turbine to be integrated into existing structures, whether it is a building, light pole or

stadium. From an economic perspective, onsite installations drastically increase rate of return

versus off-site installations of HAWTs. Offsite installations are subject to transmission and

distribution costs that onsite VAWTs are not.

Blade Speed

From the perspective of blades, VAWTs champ HAWTs in many ways. First of all,

VAWTs require significantly less wind speed to generate energy than traditional turbines. The

minimum wind speed necessary to turn a blade on a VAWT is 5mph, approximately is 2.2 m/s. 5

Therefore, VAWTs enable more wind energy production at places that are not traditionally

identified as high wind potential areas. Furthermore, ability to collect wind on a 360 degree basis

highlights VAWTs efficiency compared to HAWTs which can collect wind energy from only

one dimension. Overall, VAWTs overcome limitations of HAWTs in its ability to capture wind

from multiple directions and its ability to capture lower speed winds, improving its attractiveness

in the market of wind turbines and especially towards non-traditional markets.

Environmental Impact

With energy prices on the rise, businesses are searching for strategies to reduce the cost

of energy. This trend is fostering a great deal of business interest in renewable-energy options.

Wind power is cited as the fastest growing alternative energy segment of the renewable energy

economy and provides an attractive cost structure relative to other alternative energy sources.

Large horizontal access wind turbines (HAWTs) have traditionally dominated the wind

energy market. HAWTs are generally made of 4 feet or larger blades.6 The size of the blades

makes it hard for HAWTs to be located in anywhere but rural areas. Typically, they are clustered

into wind farms in rural lands. These large systems seriously limit the ability of many companies

to seize the opportunity of producing wind power right at their building or plant. This is due to

5 http://sauerenergy.com/

6 http://greenterrafirma.com/wind%20turbines.html

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the economics of horizontal wind turbines that favor large units, big installations and current

technology dynamics.

However, new technology offers an opportunity to break this cycle. VAWTs address an

array of known short comes under the HAWT model, such as noise pollution, bird endangerment

and space limitation, while not compromising any significant advantages of HAWTs.

Our chosen models have low decibels, as illustrated in the following graph:

Sauer Gale T1-R15 Gale T2 Helix Wind Eddy

With background

noise at 10’

At 10’ At 10’ -- At 12m/s

34 db 58 db 58 db < 5 db above

back noise

<36 db

Renewable Portfolio Standards make renewable energy more competitive than traditional

energy sources like coal and petroleum. American Wind Energy Association (AWEA) has

standardized technical procedures to test small wind system performances and safety criteria as

of December 2009. Standardization helps stabilize variables such as cost of installation and

maintenance for Kemah Power, LLC consumers. Furthermore, Congress has passed the

Emergency Economic Stabilization Act of 2008 that makes wind turbines more affordable.

Specifically, it introduced a 30% federal-level investment tax credit (ITC) to help purchases of

small wind systems with capacities of 100kWh or less.

In addition, explicating bonds and other federal level incentives will assure customers on

VAWT investments. Property-Assessed Clean Energy (PACE) bonds will help consumers invest

in Kemah Power, LLC services. PACE bonds are generally issued by municipalities and bought

by banks. Municipalities will then lend the proceeds to residential and commercial applicants to

help their purchases in renewable energy equipment. PACE bonds lessen two burdens to VAWT

market: high-up front costs, and long payback periods, making Kemah Power, LLC services

more attractive. PACE also does not burden applicants with paying back the cost of the VAWT

if the property on which it is mounted is sold to a new owner. The next owner assumes payment

of the turbine under PACE stipulations. It can be seen then, that current legislation favors

purchases of small wind turbines. Kemah Power, LLC marketing strategies will capture this in

their marketing operations towards consumers who may be unsure of how long they plan on

owning a certain property.

Additionally, renewable energy can be more attractive than traditional energy sources.

Kemah Power, LLC offers unique services that capture growing customer concern over rising

electricity costs across the states. Electricity prices across all sectors have risen by 6% since 2006

to an average of 9.44 cents/kWh. Thus high costs of traditional electricity offer a chance for

alternative energy sources to compete in the energy market. Renewable energy have other

benefits that cannot be measured on a cost and effect scale: lower carbon footprint in production.

Kemah Power, LLC will encourage suppliers to certify their products with eco-labels to ensure

consumers a high standard.

Net metering programs enable consumers to offset energy consumption at their on-site

renewable energy generation system by allowing their meters to run backwards when more

renewable energy is generated than energy is used to produce it. Wind turbine, including

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VAWTs is an important source of on-site renewable energy generation source. Federal Energy

Regulatory Commission (FERC), a recent federal ruling establishes rules that make it easier for

small wind turbine owners to reap profits of net metering programs. FERC relieves qualifying

facilities of certain regulatory burdens that a turbine owner would otherwise have to apply for, a

process sometimes involving high fees. Net metering programs increase the value of electricity

from renewable sources and enable customers to bank their electricity as credit. This allows

customers more flexibility and the ability to use credits whenever they want, increasing the value

of their renewable electricity production.

Distribution Patterns

Distribution patterns are defined by location. Kemah Power, LLC will be distributing its

services across the nation, focusing on areas that have track records in a combination of factors

that make wind energy a strong competitor in local energy markets. This combination of factors

include wind speed, cost of electricity, and buy back rate to grid. These factors will vary across

states. Kemah Power, LLC will utilize a number of advanced technologies to identify geographic

regions with the greatest average wind speed to find the best VAWT mounting sites.

Extrapolating from the traditional wind resource maps that typically evaluate wind conditions at

a height of 50 meters above ground, the company will be able to project data for VAWTs

mounted at 30 meters and above to show the cost-effectiveness of mounting VAWTs in these

areas.

In addition, the company realizes that net metering policies and the cost of electricity will

affect choices for office locations and geographically defined target markets. Desirable places

will have high wind speed, high cost in electricity, good net metering policies and proximity to

local VAWT supplier. Kemah LLC strives to reach a triple bottom line so that achievement of

earth, economics, and equity goals will be balanced out over the long run. Currently, Kemah sees

California, Illinois and Hawaii as potential target markets for having many of those desirable

qualities and plans to focus distribution of its services in those areas. 7

Operational Plan

Stage of Development

The stage of development indicates a phase by phase description of the organizational

process of Kemah Power, LLC. The initial stages of development include: Patent Application,

Grant Application, Research and Development, and Application in the Private and Public Sector.

Patent Application

The first stage of development is finalizing the patent application. The provisional patent

application was successfully filed on March 13, 2009 and has been assigned Serial No.

61/160,227. A second provisional patent has been filed on May 22, 2010 and has been assigned

7 As shown in “Why Are Electricity Prices Increasing”, fossil fuel depletion is driving prices of electricity up. Average

cost of electricity per kWh in nation was 10.4 cents per kWh in 2007.

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Serial No. 61/180,513. Finally, publication of the patent occurred on Sep. 16, 2010. The abstract

states:

“A method and system for mounting a vertical-axis wind turbine to an existing

structure, such as conventional transmission towers, monopole towers, billboards,

road signs, utility poles, buildings, stadiums and the like, is disclosed. The method

and system generally include identifying an existing structure, connecting a power

generator to the turbine, and permitting the wind turbine to operate. It is

understood that the mounting of the turbine to the existing structure is done so as

to avoid interference with normal operation of the existing structure and wind

turbine. Also, the generator is connected to the wind turbine in a manner which

produces electricity as a result of the turning of the wind turbine. In certain

embodiments the invention includes supporting the mounted turbine on the

existing structure using additional supports. The existing structure may include a

component which operates on electricity, such as a light, timer, or a motor, and

the generated electricity may be used to power the component of the existing

structure.”

The patent application phase has been completed.

Grant Application Process

The grant application process is an essential step in the formation of Kemah

Power, LLC. The purpose to apply for federal grants is to secure a significant amount of

capital to install a variety of VAWTs to existing public structures. Federal grants will be

used for three main reasons: 1) Provide a public good by providing municipalities, towns,

or cities with renewable energy for pilot projects. 2) Provide a research and development

(R&D) component for Kemah Power, LLC and VAWT suppliers. 3) Educate the young

company on specific models, operation, partnerships, and potential problems. The grant

application process is an instrumental component to the success of this company.

The first step in the grant application process is to hire a grant writer for the company.

One qualified individuals (Bachelor’s Degree or higher) will be required to achieve quality

assurance and focus to the company. The grant writer should be compensated $15/hour and work

roughly 20 hours/week. Also, a financial bonus incentive should be added when the grant reward

is granted. This should be budgeted in the grant proposal as well. Applying for more than one

federal grant would also be highly recommended. The federal grant applications should be

applied through the Department of Energy, the Department of Transportation, and the

Department of Agriculture. In response to the American Recovery Act, multiple opportunities

can be found at: http://www.grants.gov/.

The grant application process should be separated into three components to diversify

projects and have a better opportunity to gain funding. Each grant proposal of project will require

roughly $1,000,000 to cover the costs of both the public entity, suppliers, and Kemah Power,

LLC. The grant request should be for a five year period for each project. This will include one

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year for operational set-up, two years for testing, and two years to promote and sell the concept.

After the grant is awarded, it will be the grant writer’s responsibility to file post-reward reports.

The grant application should include and focus on the following components:

Public Benefit

Financial Feasibility

Energy Production

Opposition- Safety (Distraction), Aesthetics, Noise-Level, Bird Casualties

Research and Development

The reward of a grant will directly contribute to the research and development (R&D)

section of the business plan. The R&D development portion will take approximately five years to

complete with one year of set-up operation, two years of testing the effectiveness of VAWTs,

and two years to promotional selling opportunities. The main goal of research and development

will be to educate Kemah Power, LLC on the factors and complications of installation,

maintenance, and placement of the VAWTs. The main purpose of the R&D portion will be

testing various designs and products from different companies. The R&D stage will provide the

practical application in a real world setting. Moreover, the application of various VAWTs will

allow the company to create strong partnerships with manufacturers based on their performance.

The R&D implementation will directly be tested and used in the public sector. This will

include, but not be limited to the following agencies: municipalities, townships, cities, and states.

The grant specificity will be aimed at reducing the cost of electricity for tax payers and act as a

pilot project for the upstart of Kemah Power, LLC. Lastly, the grant will include payment for

new employment as well. In order to properly consult the future customer base, it is essential to

employ engineers to the team. Initially, the company should employ one engineer for the

following fields: structural, mechanical, environmental. The R&D portion should take

approximately two years to properly complete.

Private and Public Sector Application

After the R&D portion is completed, Kemah Power, LLC will have the necessary

experience, personnel, and knowledge to fully launch into the private and public sector. The

main target in the private sector will be companies with billboards such as Lamar Advertising

Company and Clear Channel Outdoor. We will also focus our attention on traditional buildings,

stadiums, and the like. The company’s main goal is to show how applying these VAWTs will

offset cost of electricity through using these methods. Likewise, the company will continue to

apply the same practices on public structures such as conventional transmission towers,

monopole towers, highway signs, and utility poles. The main contacts will be through the

Department of Energy (DOE), Department of Transportation (DOT), Department of Agriculture

(DOA), and localized government entities.

Production Process

Kemah Power, LLC is a multi-faceted business aimed to profit from three main ways.

First, it will serve as a consulting firm for customers that are interested in installing VAWTs to

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existing structures. The company will be able to offer valuable insight on placement of turbines

due to the understanding of wind speeds, height, cost of electricity, and grid payback rate. More

importantly, this company will be able to project benefits based on the customer’s interest.

Secondly, if the locale of installation is approved by Kemah Power, the second profit center will

be to license the patent for use. The company will charge a licensing fee based on a per turbine

basis. Finally, Kemah Power will act as a dealer/distributor of VAWTs. In this way, Kemah will

be able to purchase VAWTs at a wholesale price and package the entire process for the

customer. The company also intends to create a contract agreement with various

installation/maintenance technician companies. This will allow for proper installation and

maintenance for the life of the turbine. In addition, the goal of Kemah Power, LLC is to manage

the paperwork (including tax incentives, zoning regulations, etc.) for the customers ease.

Potential Suppliers

The top-rated supplies for VAWTs are as follows. Suppliers: Sauer (Wind Charger),

Tangarie Alternative Power (Gale T1-R15), Helix Wind, Urban Green Energy (Eddy), and We

Power (Seahawk). Full specifications can be found in the Appendix. Based on the retail price,

performance, weight, aesthetics, and other physical dimensional concerns, these VAWT

suppliers will be the best to mount on the following structures:

Model Tran.

Tower Monopole Billboard

Road

Signs

Utility

Poles Buildings Stadiums

Wind Charger X X X X X X X

Gale T1-R15 X X X X X X X

Helix Wind X X X X X X X

Eddy X X X X X X

Seahawk X X X X X X X

Business Space and Equipment

The ideal business space will be located in Barrington, IL because both partners, Gregory

C. Schmitt and Konrad L. Osterhues reside in this area. Ideally, this company would need

roughly 1,500 sq. ft. of business space to operate efficiently. At $15 per square foot/year, Kemah

Power will be paying roughly $22,500 for office space.

Initially, Kemah Power, LLC will need the following for day to day operation:

Computers and Software, Printing Services, Desks, Chairs, and General Office Supplies. This

initial portion will be included in the grant application process as well. However, after the grant

has been properly implemented, these expenses will need to be covered for the future by the

business. More detailed description these expenses are found in the Financial Plan section.

Feasibility

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According to the business plan, much of the start-up costs will be implemented with grant

funding. After the grant funding and R&D process is completed, Kemah Power, LLC will have

to sustain itself by generating sales for manufactures, charging licensing fees, and charging

consultant fees. Feasibility is an important component for the customer and Kemah Power, LLC.

The first example is of customer feasibility in purchasing these systems:

Helix Wind VAWT- Illinois Customer Example

(Average Example)

Total Initial Cost

Cost of Helix VAWT= $9,000 (Estimated Price after Dealer Fee)

Investment Tax Credit (ITC) of 30% of facility = $2,700

Installation and Maintenance (over 30 years) = $1,500

Patent Licensing Fee ($5/month x 30yrs) = $1,800

Consulting Fee (per turbine) = $1,000

$9,000 - $2,700 + $1,500 +$1,800 +1,000 = $10,600

Total Initial Cost= $10,600

Annual Energy Cost Savings

Cost of electricity= $0.12/kWh

Average Wind Speed at 30m= 9m/s, 9m/s=3,500 kWh (Based on Power Curve)

3,500kWh x $0.12/kWh= $420 annually

Also, tax incentive for $0.022 per kWh produced= $77 annually.

Total Energy Cost Savings= $497.

Annual Operating Cost

3,500kWh x $0.01 = $35

Total Initial Cost

(Annual Energy Cost Savings) – (Annual Operating Costs)

$10,600

($497) – ($35)

Payback Period= 22.9 years

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The feasibility of the company hinges on its ability to have on successful grant funding,

low overhead, strong customer base, partnerships between suppliers, and contract agreements

with installation/maintenance companies. As illustrated earlier, if conducted properly, Kemah

Power, LLC should be able to make money for each project assignment through the following

ways: Consulting Fee, Licensing Fee, and Dealer Fee. Additionally, a life cycle analysis (LCA)

should be taken into account by consultants on every project conducted by Kemah Power, LLC.

This will create both cost incentive to upcycle existing materials for production and close the

process of operation in a sustainable manner. With the rising price of electricity, renewable

energy systems will be a great opportunity to continue to grow and create a larger incentive for

investment.

Management and Organization

Ownership Structure

Kemah Power is a Limited Liability Company (LLC) owned by Greg Schmitt.

Management Team

Kemah Power, LLC is a small company with four specific roles that include

owner/partner, grant writer/consultant, engineering consultant, and receptionist.

Owner/Partner: Greg Schmitt and Konrad Osterhues will be acting as partners in the

operation of Kemah Power, LLC; however, the company is legally owned solely by Greg

Schmitt. Greg and Konrad’s responsibilities include: hiring/managing personnel, payroll, create

partnerships between supplier/customers, and contribute to the mission of Kemah Power, LLC.

Grant Writer/Consultant: The one grant writer’s responsibility is to apply for federal

grants. These grants will be primarily aimed at applying to the Departments of Energy,

Transportation, and Agriculture. However, additional grant funding sources will be highly

encouraged. The grant writer will be responsible for writing the necessary quarterly or annual

reports. After all of the grant work is completed, the writer will transition to a role of consultant

for the business.

Engineering Consultant: The engineering consultants will be hired based on the number

of grants rewarded to Kemah Power, LLC. Ideally, there will be three grants awarded to Kemah

Power, LLC for the following applications: Power Tree, Highway Signs, and Utility Poles. Each

engineer should have a different specialization which includes: Environmental, Mechanical, and

Structural. Each engineer will be responsible for one grant application, yet Kemah Power, LLC

would like these consultants to cooperate with one another and offer their assistance to each

project.

Receptionist: The main role of the receptionist is to conduct basic office administrational

duties. These duties include but are not limited to: accounting entry, website maintenance, data

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entry, mailing, copying/faxing, and phone operation. The receptionist will have a multi-faceted

role that will evolve into specific roles after the company is formed.

Financial Plan

This financial plan is an estimated vision of Kemah Power, LLC. Due to the vital

component of the grant application process, Kemah Power will first and foremost be contingent

on funding from outside sources. The grant reward is planned to operate for a five year period of

operation, which will consist primarily for research and development (R&D) purposes. However,

the financial plan will consist of the following reports in order to show the viability of Kemah

Power, LLC. The following reports are included below: start-up, operational, and VAWT

expense projections. Additionally, a projected balance sheet during grant operation is included as

well as a basis income statement which depicts post-grant funding.

Start-up Costs

Item(s) Quantity Cost per unit Estimated Expense

Business Registration 1 $210 $210

Patent 1 $5,000 $5,000

Computers and Software 7 $1,500 $10,500

Printer 1 $12,000 $12,000

Desks 7 $250 $1,750

Chairs 7 $130 $910

Office Table 3 $240 $720

Website 1 $1,000 $1,000

Office Supplies (Misc.) - - $750

Total - - $32,840

Operating Expenses

Item(s) Quantity Cost/Year Estimated Expense/Year

Rent 1 $22,500 $22,500

Telecommunications 1 $480 $480

Utilities 1 $600 $600

Transportation - ~$20,000 $20,000

Salary- Receptionist 1 $25,000 $25,000

Salary- Grant Writer 1 $14,400 $14,400

Salary- Engineer 3 $75,000 $225,000

Salary-Greg Schmidt 1 $50,000 $50,000

Salary- Konrad Osterhues 1 $75,000 $75,000

Total - - $432,980

VAWT Expenses

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The vertical axis wind turbine expense is based off one grant proposal. If awarded three

grants, the grant would allow for the purchase of more turbines. However, clearly shows the

hefty capital for purchasing these turbines for the R&D portion.

Item(s) Quantity Retail

Cost

Shipping Fee Estimated Expense

Wind Charger 10 $7,000 (+) $1,000 $71,000

Gale T1-R15 10 $8,450 (+) $1,000 $85,500

Helix Wind 10 $10,500 (+) $1,000 $106,000

Eddy 10 $8,650 (+) $1,000 $87,500

Seahawk 10 $9,000 (+) $1,000 $90,000

Total 50 - - $440,000

Balance Sheet

This balance sheet is a projected attempt to show what the company owns and what it

owes at after a single grant has been awarded to the business.

Assets

Patent $5,000

Business Registration $210

Office Equipment/Supplies $27,630

Federal Grant $1,000,000

Total $1,032,840

Liabilities

Rent $22,500

Salaries $389,400

Utilities $600

Total $412,500

Equity

Owner’s Equity $620,340

Income Statement

This simple income statement has been prepared to show that after grant funding, Kemah

Power, LLC will be able to sustain itself. After basic calculations, it is recommended that the

company sells 200 VAWTs in order to profit over its current operating expenses. Each turbine

installation will produce roughly $2,060 of sales for the company. The targeted goal to sell 220

turbines after the grant is highly recommended. These figures do not account for inflation;

however, the net income of over $20,220 will account for any miscalculation and price increases

in the future.

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Basic Income Statement

Gross Profit $453,200

Expenses

Total Operating Expense ($432,980)

Net Income $20,220

WindCharger -Sauer

http://sauerenergy.com/index.php?option=com_content&view=article&id=52

Appendix 1

General Page 1

Gale T1-R15 -Gale

http://www.tangarie.com/products/gale_wind_turbine_data_sheets.php

Appendix 2

General Page 2

Gale T2 -Gale

http://www.tangarie.com/products/gale_wind_turbine_data_sheets.php

Appendix 3

General Page 3

Helix Wind S322 -Helix Wind

Appendix 4

General Page 4

Eddy -Urban Green Energy

http://urbangreentechnology.com/sanya.html

Appendix 5

General Page 5

Seahawk + -We Power

Appendix 6

General Page 6

HAWT Power Curves -Two Models

Model 1:

Model 2:

Appendix 7

General Page 7