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The entry key to Solar Street Lighting market in the Middle East and GCC
Sustainergy Holding
Supervisor: Prof. Federico Frattini Assistant Supervisor: Vito Manfredi Latilla
2018/2019 Academic Year
School of Industrial and Information Engineering
Master of Science in Management Engineering
(Energy and Environmental Management)
Master Graduation Thesis
Ibrahim El-Said Desouky, 863177
Acknowledgement
I would first like to thank my thesis supervisor prof. Federico Frattini and the advisor Prof.Vito
Manfredi of the school of management engineering at the Polytechnic of Milan. It’s gratitude
because since day one he believed my idea of building my company (Sustainergy) and
supported me with business contacts to reach a fast growth with a positive result. Besides, the
door to Prof.Vito office was always open whenever I ran into a trouble spot or had a question
about my research or writing.
I would also like to praise the marketer expert Prof.Marco Gatti with his entrepreneurial
mentality who were involved in the validation survey for this research project. Without their
passionate participation and input, Sustainergy could not have been successfully built, and the
validation survey could not have been successfully conducted. I would like to thank him from
the bottom of my heart for his collaboration, patience and the investment in the idea.
I would also like to acknowledge the General Manager of Sunmaster Engr. Steven Zang, who
was very generous to provide his technical knowledge to reach the success point and I am
gratefully indebted to his valuable comments on the technical part of this thesis.
I would like to notice, appreciate and thank all the support and motivation from my team
colleges Valentina Sofia and Super Mary (MariaGrazia) that have positively affected the final
result. Highly greeting for your work.
Last but not least, the massive gratitude from the moon and back to all my family members,
one by one regarding the tremendous priceless support.
Table of Contents
Abstract ................................................................................................................................... 1
Executive summary ................................................................................................................. 2
Introduction ............................................................................................................................ 2
Aim of the study ...................................................................................................................... 3
Methodologies ........................................................................................................................ 3
1. Chapter one (regulations and market circumstances) ............................................... 4
1.1. Circumstances of the energy market in Egypt............................................................ 4
1.1.1. Regulations for Energy efficiency in Egypt ................................................................. 4
1.1.2. The main objectives of the electricity sector strategy ............................................... 5
1.1.3. The Egyptian government role to support renewable energy ................................... 6
1.1.4. The actions to achieve energy efficiency improvement in Egypt .............................. 6
1.1.5. The environmental impacts regarding actions ........................................................... 6
1.1.6. Solar Irradiation in Egypt ............................................................................................ 7
1.1.7. Increasing the potential SSL applications in Egypt ..................................................... 8
1.2. Circumstances of the energy market in the GCC countries ....................................... 9
1.2.1. Solar Irradiation in GCC ............................................................................................ 11
1.2.2. GCC countries’ targets toward energy efficiency & renewable energy ................... 12
1.2.3. GCC countries plans and strategies toward renewable energy ............................... 14
1.2.4. Kingdom of Saudi Arabia .......................................................................................... 14
1.2.5. United Arab Emirates ............................................................................................... 14
1.2.6. Bahrain ...................................................................................................................... 15
1.2.7. Kuwait ....................................................................................................................... 16
1.2.8. Oman ........................................................................................................................ 16
1.2.9. Qatar ......................................................................................................................... 17
1.2.10. Conclusion from the GCC market analysis ............................................................... 17
2. Chapter two (technologies) ...................................................................................... 18
2.1. The lighting lamps ..................................................................................................... 18
2.1.1. Incandescent Lighting ............................................................................................... 19
2.1.2. Solid-State Lighting ................................................................................................... 19
2.1.3. Gas Discharge Lighting .............................................................................................. 20
2.1.5. Smart Lighting projects in Italy (European reference) ............................................. 26
2.2. Solar panels ............................................................................................................... 29
2.2.1. Monocrystalline silicon solar panels......................................................................... 30
2.2.2. Polycrystalline silicon solar panels ........................................................................... 31
2.3. Battery ...................................................................................................................... 31
2.3.1. Lead Acid battery ...................................................................................................... 32
2.3.2. Lithium-Ion battery ................................................................................................... 32
2.4. Controllers ................................................................................................................ 34
2.4.1. Types of controllers used in the solar streetlight applications ................................ 35
2.4.2. Advantages of controllers ......................................................................................... 36
2.5. Metal structure ......................................................................................................... 36
2.5.1. Poles .......................................................................................................................... 36
2.5.2. Arms .......................................................................................................................... 37
2.5.3. Brackets .................................................................................................................... 38
2.5.4. Corrosion protection ................................................................................................ 39
2.5.5. Thermic galvanisation ............................................................................................... 39
2.5.6. Powder coating ......................................................................................................... 40
2.6. Cables ........................................................................................................................ 40
2.6.1. Cables Definition ....................................................................................................... 40
2.6.2. Cable components .................................................................................................... 41
2.6.3. Battery cables with lugs ........................................................................................... 42
2.6.4. Battery interconnects ............................................................................................... 42
2.6.5. PV arrays’ cables ...................................................................................................... 42
2.6.6. Connectors ................................................................................................................ 42
2.7. Smart management control systems........................................................................ 43
2.7.1. The approaches and devices of the MCS .................................................................. 43
2.7.2. The advantages of the MCS ...................................................................................... 45
2.7.3. Sunmaster MCS technologies ................................................................................... 45
2.8. Technologies of the Solar Power System ................................................................. 46
2.8.1. Inverters .................................................................................................................... 46
2.8.2. Basic electrical specifications of the On-Grid power inverter .................................. 48
2.8.3. Diagnostics and reporting information .................................................................... 51
2.8.4. The types of solar power systems ............................................................................ 52
2.9. The types of solar streetlight .................................................................................... 55
3. Chapter three (market analysis) ............................................................................... 57
3.1. PEST analysis ............................................................................................................. 57
3.1.1. The advantages of PEST analysis .............................................................................. 57
3.1.2. Factors of PEST analysis ............................................................................................ 57
3.1.3. Practical PEST analysis on the Egyptian market ....................................................... 58
3.1.4. Opportunities and threats of the political factors .................................................... 60
3.1.5. Opportunities from PEST analysis ............................................................................ 60
3.1.6. Threats from the PEST analysis ................................................................................ 61
3.1.7. Actions toward exploiting the opportunities and avoiding the threats ................... 61
3.2. SWOT analysis ........................................................................................................... 61
3.2.1. Introduction of SWOT analysis ................................................................................. 61
3.2.2. Strengths of PV market ............................................................................................. 62
3.2.3. Strengths of Sustainergy ........................................................................................... 62
3.2.4. The weakness of the PV market ............................................................................... 62
3.2.5. The weakness of Sustainergy ................................................................................... 62
3.2.6. Opportunities for Sustainergy .................................................................................. 63
3.2.7. Threats for Sustainergy ............................................................................................. 63
3.2.8. Recommendations .................................................................................................... 63
3.2.9. Conclusion of the SWOT analysis ............................................................................. 64
4. Chapter Four (Competitive advantages strategies).................................................. 65
4.1. The engines of growth .............................................................................................. 65
4.1.1. Exploitation of the engines of growth ...................................................................... 65
4.2. Competitive advantage............................................................................................. 66
4.2.1. Cost leadership strategy for Italwarmi & Sustainergy .............................................. 67
4.2.2. Cost leadership and Porter’s five forces ................................................................... 67
4.3. Strategic Alliance concept ........................................................................................ 68
4.3.1. Advantages of the strategic alliance......................................................................... 68
4.3.2. The Risks of Strategic Alliance .................................................................................. 69
4.3.3. Applications of the strategic alliance theory in Italwarmi & Sustainergy BMs ........ 69
4.4. Benchmarking ........................................................................................................... 70
4.4.1. Introduction of the Benchmarking ........................................................................... 70
4.4.2. Comparison between GE and Sunmater .................................................................. 71
4.4.3. Comparison between Sol and Sunmaster ................................................................ 72
5. Chapter five (Italwarmi & Sustainergy Business Models) ........................................ 73
5.1. Business Model Canvas ............................................................................................ 73
5.2. Italwarmi Business Model ........................................................................................ 74
5.3. Kuwait Salem Air Force Base case study .................................................................. 78
5.3.1. The project description ............................................................................................. 78
5.3.2. Determination of the project configuration ............................................................. 79
5.3.3. The Lighting configuration ........................................................................................ 87
5.4. Market players of SSL & SPS ..................................................................................... 88
5.4.1. Stakeholders identifications ..................................................................................... 88
5.4.2. The evaluation processes ......................................................................................... 89
5.5. The project phases .................................................................................................... 91
5.5.1. Project Development ................................................................................................ 91
5.5.2. Implementation phase ............................................................................................. 93
5.5.3. Performance measurement ..................................................................................... 93
5.5.4. Handover .................................................................................................................. 94
5.6. Startup introduction ................................................................................................. 94
5.6.1. The Startup theory .................................................................................................... 94
5.6.2. The lean startup methodology ................................................................................. 95
5.7. Sustainergy business model ..................................................................................... 96
5.8. Case Study for the Higher Technological Institute in Egypt ................................... 100
5.8.1. Project description .................................................................................................. 100
5.8.2. Project result .......................................................................................................... 102
5.9. Future development of Italwarmi & Sustainergy ................................................... 103
5.9.1. Blue ocean theory ................................................................................................... 103
5.9.2. Product & Service innovation ................................................................................. 104
5.9.3. Energy efficiency service ........................................................................................ 105
References .......................................................................................................................... 106
List of Tables
Table 1: part of the revenues of Sunmaster, Italwarmi and Egytalia in 2019. ............................ 2
Table 2: current and futuristic installation capacity of the renewables in the GCC. Source:
Middle East Electricity’s report. ................................................................................................. 13
Table 3: Comparison between the lighting technologies, the data are extracted from the
following sources: Lighting technologies comparison. http://www.gigavision.com.au/study-
centre/lighting-technology-comparison , Studying material of Economic Assessment for
Energy Efficiency Solutions in industrial buildings. Prof. Giovanni Toletti, 2017, Catalogue from
the technical department in SunMaster and Isolar. China. ....................................................... 23
Table 4: comparison between the smart lighting projects in Italy, affirming LED is the best
available technology in the lighting applications. Sources: Reverberi, ASSIL, Phillips Italia
projects references..................................................................................................................... 28
Table 5: comparison between the types of solar panels. Source: studying material of Energy
management & sustainability Prof. Vittorio Chiesa. .................................................................. 29
Table 6: comparison between LFP and Gel battery. Source: solar electricity handbook,
Sunmaster batteries’ technical data sheet. ............................................................................... 34
Table 7: the relation between the number of solar arrays and the nominal and max. voltage.
Source: solar electricity handbook 2017. ................................................................................... 49
Table 8: practical analysis of PEST model factors. Source: World Bank, market research
reports, the global economy websites. ...................................................................................... 59
Table 9: benchmarking between GE Vs Sunmaster. Source: Sunmaster technical data sheet,
price lists, GE technical data sheet and prices. .......................................................................... 71
Table 10: benchmarking SOL Vs Sunmaster. Sources: Sunmaster technical data sheet, price
offer, Sol Inc technical datasheet and price offer. ..................................................................... 72
Table 11: choosing the optimal LED wattage. Source: Sunmaster technical department. ....... 79
Table 12: feasibility analysis for HTI project. ........................................................................... 102
Table 13: prices and technical specifications of the All in One. Source: Sunmaster price offer.
.................................................................................................................................................. 102
Table 14: prices and technical specifications of the split system. Source: Sunmaster price
offer. ......................................................................................................................................... 103
List of Figures
Figure 1: electricity production 2015 in Egypt. Source: International Energy Agency. ............... 4
Figure 2: electricity consumption 2015 in Egypt. Source: International Energy Agency. ............ 4
Figure 3: 30/35 vision for electricity production in Egypt. Source: MERE. .................................. 6
Figure 4: the solar irradiation map of Egypt. Source: Global Solar Atlas. .................................... 8
Figure 5: BenBan solar sark project in Aswan, Egypt. Source: Forbes Middle East. .................... 9
Figure 6: global share of Oil & Gas production. Source: petroleum study and research centre
of KSA. .......................................................................................................................................... 9
Figure 7: solar Irradiation map in the GCC region. Source: International Renewable Energy. . 11
Figure 8: renewable energy targets in the GCC countries. Source: International Renewable
Energy Agency. ........................................................................................................................... 12
Figure 9: Incandescent Lamp. Source: Phillips catalogue. ........................................................ 19
Figure 10: LED Lamp configuration. Source: Sunmaster online course. ................................... 19
Figure 11: diagram of Gas Discharge Lighting. ........................................................................... 20
Figure 12: diagram of the Induction Lighting. ............................................................................ 21
Figure 13: typical life of standard lighting technologies. Source: the elusive “life” of LEDs: How
TM-21 contributes to the solution. LEDs Magazine, November 2011. ...................................... 25
Figure 14: Monocrystalline Solar Panel. Source: Amerisolar technical data sheet. .................. 30
Figure 15: Polycrystalline Solar Panel. Source: Amerisolar technical data sheet. ..................... 31
Figure 16: GEL Battery. Source: Sunmaster catalogue. .............................................................. 32
Figure 17: Lithium Ion battery chemical reactions. Source: Studying material of fundamentals
of energy technologies Prof. Matteo Zago (Polimi). .................................................................. 33
Figure 18: Controller. Source: Sunmaster catalogue. ................................................................ 34
Figure 19: diagram of how the PWM controller works in the SPS. Source: Sunmaster online
course. ........................................................................................................................................ 35
Figure 20: diagram of how MPPT controller works in the SPS. Source: Sunmaster online
course. ........................................................................................................................................ 35
Figure 21: the arms position in the solar streetlight system. Source: Sunmaster catalogue. .. 37
Figure 22: drawing of the arm design. Source: Sunmaster technical data sheet. ..................... 38
Figure 23: drawing of the connection between the split system’s components. Source:
Sunmaster online course. ........................................................................................................... 39
Figure 24: Plastic Tubing. Source: Cable Tie Company. ............................................................. 41
Figure 25: Battery Cables. Source: Sunmaster catalogue. ......................................................... 42
Figure 26: panels interconnection. Source: Sunmaster technical data sheet. .......................... 42
Figure 27: Connector’s Male & Female terminals. Source: Sunmaster technical data sheet. .. 43
Figure 28: the electrical current conversion from DC to AC. Source: Sunmaster technical data
sheet. .......................................................................................................................................... 46
Figure 29: screenshot for a platform of the power tracking. Source: solar electricity handbook.
.................................................................................................................................................... 51
Figure 30: Off-Grid system components and connections. Source: Indiamart website. ........... 52
Figure 31: On-Grid system components and connections. Source: Indiamart website. ........... 53
Figure 32: Hybrid system components and connections. Source: Indiamart website. ............ 54
Figure 33: All in one board. Source: Sunmaster technical data sheet. ...................................... 55
Figure 34: split system components. Source: Sunmaster catalogue. ........................................ 56
Figure 35: conclusion of Sustainergy SWOT analysis. ................................................................ 64
Figure 36: Italwarmi Business Model. ........................................................................................ 74
Figure 37: Trade off the projects regarding project size & the business strength. ................... 75
Figure 38: Salem air force base project’s stakeholders. ............................................................ 78
Figure 39: result from the excel sheet of the initial lighting configuration. Source: Sunmaster
technical department. ................................................................................................................ 79
Figure 40: solar irradiation chart of the project location in Kuwait. Source: solar GIS maps. ... 80
Figure 41: screenshot of Sunmaster configuration software. Source: Sunmaster technical
department. ............................................................................................................................... 81
Figure 42: the Dialux of the Double Arms. Source: Sunmaster technical data sheet. ............... 82
Figure 43: the Dialux of the Single Arms. Source: Sunmaster technical data sheet. ................. 83
Figure 44: the color rendering of the Double Arms. Source: Sunmaster technical data sheet. 84
Figure 45: the color rendering of the Single Arms. Source: Sunmaster technical data sheet. .. 85
Figure 46: road dimensions for the Single Arms. Source: Sunmaster technical department.... 86
Figure 47: road dimensions for the Double Arms. Source: Sunmaster technical department. 86
Figure 48: project wiring diagram for the SSL components. Source: Sunmaster technical
department. ............................................................................................................................... 87
Figure 49: stakeholders of SSL & SPS projects. .......................................................................... 89
Figure 50: SSL & SPS projects tender process. ........................................................................... 90
Figure 51: project management phases. .................................................................................... 91
Figure 52: profit share between Sustainergy & Italwarmi. ........................................................ 94
Figure 53: Startup Process Stages. ............................................................................................. 95
Figure 54: Sustainergy Business Model. ..................................................................................... 96
Figure 55: layout of the parking area. Source: Sunmaster technical department................... 100
Figure 56: layout of the entrance area. Source: Sunmaster technical department. ............... 101
List of Abbreviations
AC: Alternate Current ................................................................................................................. 46
AER: Authority for Electricity Regulation ................................................................................... 16
AGM: Absorbent Glass Mat ........................................................................................................ 32
ARAMCO: Arabia American Oil Company .................................................................................. 75
ASSIL: Associazione Nationale Produttori Illuminazione ........................................................... 26
AWG: American Wire Gauge ...................................................................................................... 42
B2B: Business to Business .......................................................................................................... 24
BAPCO: Bahrain Petroleum Company ........................................................................................ 15
BMC: Business Model Canvas .................................................................................................... 96
CDMA: Code Division Multiple Access ....................................................................................... 45
CFL: Compact Fluorescent Lamp .................................................................................................. 7
CIGS: Copper Indium Gallium Selenide ...................................................................................... 29
CIS: Copper Indium Selenide ...................................................................................................... 29
CRI: Colour Rendering Index ...................................................................................................... 22
CRM: Customer Relationship Management ............................................................................... 65
CSP: Concentrated Solar Power ................................................................................................. 16
DC: Direct Current ...................................................................................................................... 35
DEWA: Dubai Electricity and Water Authority ........................................................................... 15
DSP: Directory System Protocol ................................................................................................. 47
e.g.: Example ................................................................................................................................ 3
EBRD: European Bank for Reconstruction and Development ..................................................... 9
EPC: Engineering, Procurement and Commissioning ................................................................... 1
ESCO: Energy Saving Company ................................................................................................... 75
EU: European Union ..................................................................................................................... 5
EWA: Electricity and Water Authority ........................................................................................ 15
FIT: Feed in Tariff .......................................................................................................................... 9
FLA: Flooded Lead Acid .............................................................................................................. 32
FRP: Fibre Reinforced Polymer ................................................................................................... 36
GCC: Gulf Cooperation Council .................................................................................................... 1
GCF: Green Climate Fund ............................................................................................................. 9
GDP: Gross Domestic Product .................................................................................................... 10
GE: General Electric .................................................................................................................... 73
GHG: Greenhouse Gases .............................................................................................................. 2
GHI: Global Horizontal Irradiation .............................................................................................. 11
GPRS: General Packet Radio Service .......................................................................................... 45
HDG: Hot Dip Galvanised ........................................................................................................... 39
HVAC: Heating, Ventilation and Air Conditioning ........................................................................ 5
IEA: International Energy Agency ................................................................................................. 4
IFC: International Finance Corporation ........................................................................................ 9
IoT: Internet of Things ................................................................................................................ 44
IP: International Protection Standard ........................................................................................ 25
IRENA: International Renewable Energy Agency ....................................................................... 10
IT: Information Technology ........................................................................................................ 44
KISR: Kuwait Institute for Scientific Research ............................................................................ 16
KSA: Kingdom of Saudi Arabia .................................................................................................... 10
LC: Letter of Credit ..................................................................................................................... 94
LED: Light Emitting Diode ............................................................................................................. 3
LIP: Lithium Iron Phosphate ....................................................................................................... 33
M&V: Measurement and Verifications ...................................................................................... 93
MCS: Management Control System ........................................................................................... 43
MERE: Egyptian Ministry of Electricity and Renewable Energy ................................................... 7
MoT: Ministry of Transportation .................................................................................................. 8
MoU: Memorial of Understanding ............................................................................................... 4
MPPT: Maximum Power Point Tracking ..................................................................................... 35
NCA: Nickel Cobalt Aluminum .................................................................................................... 33
NDC: National Determined Contribution ................................................................................... 13
NEEAP: National Energy Efficiency Action Plan ...................................................................... 15
NREA: New and Renewable Energy Authority ............................................................................. 9
O&M: Operating and Maintenance ........................................................................................... 43
OLED: Organic Lighting Emitting Diodes .................................................................................... 19
OPEC: Organisation of the Petroleum Exporting Countries ....................................................... 10
PEST: Political, Economic, Socio-Cultural, Technological ............................................................. 1
PI: Public Institution ................................................................................................................... 88
PLED: Polymer Lighting Emitting Diodes .................................................................................... 19
POD: Points of Difference........................................................................................................... 44
PPA: Power Purchasing Agreement ............................................................................................. 6
PWM: Pulse Width Modulation ................................................................................................. 35
R&D: Research and Development ................................................................................................ 3
RAECO: Rural Areas Electricity Regulation .............................................................................. 16
RAEE: Rifiuti Apparecchiature Elettriche e Ellettroniche ........................................................... 26
REDOX: Reduction Oxidation Reactions ..................................................................................... 31
RFP: Request for Proposal .......................................................................................................... 89
RFQ: Request for Qualification ................................................................................................... 89
SDGs: Sustainable Development Goals ........................................................................................ 5
SME: Small and Medium Enterprises ......................................................................................... 98
SMS: Short Message Service ...................................................................................................... 46
SPS: Solar Power System .............................................................................................................. 1
SWOT: Strength, Weakness, Opportunities, Threats ................................................................... 1
TUV: Technical Inspection Association ....................................................................................... 42
UAE: United Arab Emirates ........................................................................................................ 10
UNFCCC: United Nations Framework Convention on Climate Change ...................................... 13
UNOPS: United Nations Office or Projects Services ................................................................. 104
USA: United State of America .................................................................................................... 10
UV: Ultraviolet ............................................................................................................................ 21
VDC: Direct Current Voltage ....................................................................................................... 42
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Abstract
Nowadays, the global trend indicates that most of the countries are focusing on the adoption
of the energy efficiency technologies to face the challenge of the massive increase on the
electricity demand due to the population growing, also fighting the global climate change and
the lack of clean energy resources. That is why the applications of renewable energy
technologies have a substantial potential portion from the overall market share of the energy
sector worldwide. Based on that, there are highly promising business opportunities for
Italwarmi SRL and Sustainergy incase both enhanced the customers' value propositions by
introducing sustainable PV services and products at competitive prices.
Remark 1: Italwarmi SRL is an Italian trading company founded 1998, the firm has signed a joint
venture agreement with Sunmaster SSL manufacturer which appoint that Italwarmi is taking
the obligation of the business development, creating the market analysis, strategic plan,
business relations, digital marketing and handling all the international sales deals outside Asia
boundaries. Besides, Italwarmi has non-exclusive international sales agency agreements with
Amerisolar, Canadian Solar, Q solar, Trina, BYD and Jinko that gives the company the advantage
of having more alternative suppliers for the solar panels' price varieties.
Remark 2: Sustainergy has not existed before this paper; it is a business model that comes out
from Italwarmi because they have a mutual structure will be shown later in detail. The idea was
started two years ago in 2017, the owners of Itawarmi and Sustainergy have started a
collaboration to enhance the first party's business model to reach growth of sales in the GCC
and Middle East PV market and seize in return 33% profit share from each project. After
achieving success with Italwarmi, the two parties adjusted the agreement states that
Sustainergy is an exclusive agent in Egypt as a first step, then positively assessing the
performance over two years to upgrade an exclusivity agreement in GCC.
This paper is focusing on how to achieve two main objectives. The first one is the sustainable
development of Italwarmi business model to maximise the PV products' growth of sales
worldwide, especially in the GCC region and the Middle East countries. Accordingly, reinvest a
large part of the profit in expanding the company activity to EPC company with professional
capabilities in the designing, engineering, procurement, and commissioning of full-scale PV
projects. The second object is building a startup energy company (Sustainergy) with scalable
characteristics to grow over time through a diversified portfolio to compete in the trading,
engineering and consultancy segments of the energy market in Egypt. Sustainergy’s purpose is
accessing the PV sector, mainly, commencing to operate in the SSL applications as EPC and
gradually seek to implement the small scale of SPS projects in the residential area, then propose
to participate in large scale projects in the commercial and the industrial PV sector.
The starting point is gathering precise data about the circumstances of the energy market in
Egypt and the GCC such as the market structure, energy production and consumption,
renewable energy installation capacities and countries' visions, missions and strategic. Hence,
creating a market analysis including PEST and SWOT studies for the Egyptian market to reduce
the gap of the market uncertainty during taking the strategic decisions and create a competitive
business model because Sustainergy will bear the full financial risk as a new entrant in the
Egyptian market, not Italwarmi.
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It is imperative also fingering all the available SSL and SPS technologies in the global market
and identifying the best to utilise in the PV applications in term of the economic sufficient and
energy efficient, subsequently recognising the status quo of Sunmatser by accomplishing
benchmarking with other global competitors. Last but not least, promoting the business model
of Italwarmi based on proper business methodologies to be the primary partner of Sustainergy
to enter the Egyptian market with a very highly competitive advantage then promoting the
company activities in the GCC countries.
The summing-up in (table 1) is pointing a part of the development success in numbers,
Italwarmi obtained 238,773.45 USD, and Sustainergy generated 78,796 USD from trading and
technical consultancy activities within six months from launching the strategic plan.
Executive summary
Introduction
In modern time, the world is suffering a scarcity of energy resources challenge and
environmental issues like climate change and the negative impact of GHG emissions; therefore,
all the countries are looking for the best alternatives to overcome these barriers. On the energy
production side, the exploitation of the renewable energy technologies (e.g. PV, Wind,
Hydropower, Biomass) instead of using the traditional resources (e.g. oil, gas, coal, nuclear) is
the best way to generate green energy to heighten the eco-system and diminishing the GHG
emissions. On the energy consumption side, the adoption of the energy efficiency measure is
the most valuable solutions to save energy usage in several sectors at widescale.
Lighting systems are essential technologies in the whole world that better human being life.
They are categorising into indoor and outdoor lighting and being in different sectors industrial,
commercial and residential.
Lighting applications account for 19% of the overall electricity consumption worldwide and
spend around 32 TWh of annual electricity consumption. Result as all the countries begin to
modernise their lighting systems by replacing the traditional one with highly efficient new
lighting technologies, particularly in the outdoor lighting applications (e.g. highways, streets,
tunnels, bridges).
SSL systems are one of the most diffused energy efficiency technologies around the world in
countries having high solar irradiation. The SSL consists of several components such as solar
panel, battery, lamp, cables, controller, mounting structure and pole. All these components
connect to illuminate a specific area by producing electricity from the solar panel during the
daylight and store in the battery to power the lighting lamp when the night.
Project Sunmaster
(R) USD
Italwarmi
(R) USD
Egytalia
(R) USD
Yemen (UN) 3,80,0000 190,000 62,700
Kuwait (Ministry of Defense) 711,104 35,555 11,733
KSA (Royal commerce, Rexel) 264,369 13,218.45 4,363
TOTAL 4,775,473 238,773.45 78,796
Table 1: part of the revenues of Sunmaster, Italwarmi and Egytalia in 2019.
3 | P a g e
Sunmaster is a Chinese family business; They are a manufacturer of various solar products, e.g.
SSL, solar garden lights, small and medium SPS and solar home lighting products. The
production plant based in China on 8,000 square metres with multiple workshops to produce
solar panels, LED lamps, controllers and poles. The production capacity is 500,000 units of SSL
and SPS, the systems' components have all the certifications approving that its products are
meet the international standards; thus, the company export its goods to more than 90
countries around the world. Sunmaster runs its activities following the responsibility
management concept treating ethical and sustainable aspects. The company intends to provide
the customers with lighting facilities having low carbon emissions. According to the statistics,
there are 1.6 Bn of people who live in darkness without lighting and having no access to
electricity.
Sunmaster has developed most demanded products by collaborating with other sister storage
systems manufacturer, and universities in China (e.g. Faudan University) to meet the
customers' needs around the world. The factory has an influential R&D department including
physical, thermology, photology, mechanics, electronics thanks to their collaboration with
Semiconductor Institute of Beijing University and LED Research Center of Zhejiang University.
Aim of the study
The original purpose is advancing Italwarmi business model to achieve growth of sales; further,
the founding of Sustainergy as EPC company with a flexible business model to compete and
generate profits in Egypt and the GCC region PV market through the following current activities:
1. Trading SSL and SPS components by formal agreement with Italwarmi SRL behalf of
Sunmaster, Amerisolar, Canadian Solar, Jinko, Trina, Q Solar and BYD (Solar panels
manufacturers).
2. Introducing technical consultancy in the SSL and SPS design, configuration, installation and
commissioning.
3. Participations for the tenders in Egypt to supply, design, installation of the SSL and SPS
applications. Moreover, submission for the bids in other Middle East countries by building
strategic alliances with lighting, contracting and other EPC companies.
4. Sustainable development of the company business model to cover the other applications
in the PV sector such as solar carports, solar water pumps and solar power plants.
5. Sustainable market analysis to create new business opportunities in the Middle East and
Africa as an expansion for the company activities in the future.
Methodologies
- Cost leadership strategy.
- PESTE analysis.
- SWOT analysis.
- Blue Ocean Strategy.
- Sunmaster benchmarking with global competitors.
- Strategic Alliance.
- Engines of growth.
- Business model canvas.
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1. Chapter one (regulations and market circumstances)
This chapter reviews the status, trends and evolving policy frameworks for renewable energy
in Egypt and the GCC states.
1.1. Circumstances of the energy market in Egypt
The energy sector in Egypt follows the generation mix between renewable technologies and
the traditional one, according to the last statistic of the IEA, in 2015 the electricity production
from renewable energy technologies is approximately 8.2% with 15,030 GWh on the other side,
the electricity production from fossil fuel is 91.8% with 16,694,7 GWh. The surplus amount
1,158 GWh of production is going to export, the energy industry usage is 6,337 GWh, and there
is 20,389 GWh of energy losses due to the fragile energy efficiency measures. This market
structure is started to change regarding the regulatory framework and the future strategic
energy plan, initiatives, objective and the actions toward increasing the adoption of renewable
energy technologies. The total electricity consumption is 15,420,5 GWh divided amid various
sectors, the highest use is related to the residential area with 44%, and more than 50% of the
electricity consumption spends in the industrial, commercial and public services that are
involving the illumination of streets, tunnels, bridges and highways.
1.1.1. Regulations for Energy efficiency in Egypt
Egypt and the European Union have mutual energy challenges concerning the insufficient
energy ratio of production and consumption. Since both need to overcome the barriers of
energy security supply, energy sources diversifications and restructuring the energy market.
The two parties have established a strategic energy partnership called the Euro-Mediterranean
Agreement that signed in Cairo, Egypt, on 23rd April 2018 to improve the energy sector. The
MoU declares a collaboration to figure out common objectives, setting strategic plans and
practical actions to reach their targets.
21%
71%
7%0%1%
Electricity production 2015
Oil 38237 GWh
Gas 128710 GWh
Hydro 13432GWh
PV 253 GWh
Wind 1345 GWh
25%
0%
44%
26%5%
Electricity consumption 2015 Industry 39187
GWh
Transport 601 GWh
Residential 67238GWh
Commercial andpublic service40170 GWhAgriculture 7009GWh
Figure 1: electricity consumption 2015 in Egypt. Source: International Energy Agency.
Figure 2: electricity production 2015 in Egypt. Source: International Energy Agency.
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The following manners are correlating and supporting Italwarmi & Sustainergy main activities
by increasing the market demand onward more diffusion of solar street lighting systems and
solar power systems.
1. Assistance including joint energy measures and renewable energy projects: this
cooperation comprises the financial, the technical and the environmental aspects of the
renewable energy projects approaching the reform of the energy policies and regulatory
framework of the renewable energy technologies. These enrichments will attract more
investor to implement several energy projects in Egypt.
2. Increase the awareness: both parties adopted the idea of supporting the educational
organizations particularly the universities and providing training programs to flourish the
knowledge of the energy status globally, the advantage of the energy efficiency serving the
production and consumption perspectives.
3. SME incentives: they aim to deliver most of the support to the small and medium-sized
enterprises because they do not have energy management systems and have weak
capabilities to manage the energy issues.
4. Energy efficiency strategies and policies: Egypt has a short-term objective within 2018-
2020 and long-term one until 2035 for the energy efficiency saving that should reach for
implementing the national energy strategy.
5. Cross-cutting assets: Egypt and the EU are paying attention to the energy efficiency of the
cross-cutting assets e.g. pumps, compressors, lighting and HVAC. The EU will assist Egypt
throughout institutional strengthening, knowledge transfer, developing the action plans,
developing regulations and implementation of specific energy efficiency projects.
6. Collaboration in the technological, scientific and industrial fields: the advancement of the
energy sector by passing the best available European technology and the best international
practices that can suit with the Egyptian market circumstances to accomplish the energy
efficiency saving within a short period.
The Egyptian renewable energy strategic vision for 2030 is restructuring the energy sector to
match the national sustainable requirements, achieve the United Nations SDGs and maximizing
the efficient use of various resources contributing to the economic growth, competitiveness,
achieving social justice and preserving the environment.
1.1.2. The main objectives of the electricity sector strategy
- Utilisation of the available resources.
- Promoting the utilisation of renewable energy.
- Growing energy efficiency through the Euro-Mediterranean Agreement.
- Environment conservation by adopting advanced measures on the supply side.
- Future planning to satisfy the demand increase.
The target is increasing the electricity production by using 40% of renewable energy until 2030
and 43% until 2035 taking consideration 18% target of energy efficiency measures.
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1.1.3. The Egyptian government role to support renewable energy
- Facilitation of the land allocation and permits, (7,650 Km2 are ready allocated).
- Information availability.
- Long-term PPA.
- Constitutional guarantees and benefits from carbon credits.
- Custom duties are 2%.
- The governorates council has approved to utilise the solar energy streets and public
building lighting.
- The total installed capacity of PV systems is more than 80 Mw for different aims in
different sectors.
- The cabinet has issued a legislative decree to disseminate the use of PV in 1,000
administrative building.
1.1.4. The actions to achieve energy efficiency improvement in Egypt
- Optimising the share of the combined cycle power plants.
- Usage of super-critical steam technology.
- Revamping of traditional thermal power plants to work in the dual firing system.
- Improve power plants efficiency and rehabilitation and renewal of transmission and
distribution networks to reduce fuel consumption and electrical losses.
- Modernisation of the transmission network by conversion into the smart grid.
- Energy conversion measures (Mainly efficient lighting and power factor correction) in
many administrative buildings.
- Labelling and standards program for home appliances.
- Energy efficiency codes for residential, commercial and public lighting.
1.1.5. The environmental impacts regarding actions
- The scheduled electricity generation is around 49 TWh/year by 2023.
- Fossil fuel saving about 9.7 million TOE/year.
- CO2 emission reduction of 25.3 million TCO2/year.
Figure 3: 30/35 vision for electricity production in Egypt. Source: MERE.
2034/2035
Nuclear 10% Natural Gas 17%
Wind 13% CSP 13%
Hydro 6% PV 11%
Coal 30%
2029/30
Nuclear 10% Natural Gas 24%
Wind 16% CSP 11%
Hydro 4% PV 9%
Coal 26%
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One of the MERE actions to implement their strategic energy plan and achieve a 20% reduction
of the GHG emissions is to substitute the traditional lighting technologies such as Sodium
vapour lamps with LEDs. SSL projects almost outfitted in rural areas where is a difficulty to
access to the national electricity grid, the government will assign SSL projects to Contracting or
lighting companies through the participation in bids.
The concept of using SSL technologies is to achieve energy efficiency by incorporating the
production and consumption phases. Thus, the amount of energy using by the LED bulb is
producing from the solar panel as a renewable energy technology. Regarding, the MERE has
started to distribute twelve million CFL indoor lamps and thirteen million LED outdoor bulbs at
half price with eighteen months guarantee to support the energy efficiency.
Remark: there are three types of outdoor lighting projects that Sustainergy performs:
1. Replacement of the traditional bulbs with LEDs.
2. Substitution of the full on-grid lighting with SSL.
3. Implementing SSL project in the new infrastructure (e.g. new residential compounds, new
roads).
1.1.6. Solar Irradiation in Egypt
Egypt has a solar irradiation range 2,000-2,483 KWh/m2/year thanks to the geographical
location and sunshine duration 9-11 hr/day that gives potential productivity more than 50,000
Mw produced power. As noted in the solar resource map, Egypt characterised by high average
daily irradiation rate and relatively high frequency of bright days. In Cairo, there is a low average
daily irradiation rate and frequency of the sunny days due to the urbanisation and the high
pollution. Southern Egypt has higher solar irradiation than the north resulting that most of the
new solar projects will take place in upper Egypt.
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1.1.7. Increasing the potential SSL applications in Egypt
The Egyptian road network has consisted of 23,619 kilometres of roads divided into 6,715,303
of single roads, 3,920 kilometres of double roads and 476 kilometres of highways. The strategic
plan of the ministry of transportation to upgrade the national road network, they are working
on the enlargement of the highways roads to expedite the interconnection between the
Egyptian provinces.
The MoT estimated 8 $ billion investments to execute expansion road projects over the next
five years. The strategic plan involves series of new roads alike Ras Sudr-Sharm El Sheikh road
with 71 $ million as an initial investment, Safaga-El Quseir-Marsa Alam road with 85 $ million
investment and a road from Alexandria in the North-West of the Nile to Abu Simbel by setting
640 $ million investment besides the development of the bridges and tunnels. These
improvements will lead to tremendous progress and drive economic growth in several sectors
(e.g. residential sectors to face the high population increasing, commercial and industrial
sector). The link here is that all the new roads infrastructure projects will utilise the SSL as
Figure 4: the solar irradiation map of Egypt. Source: Global Solar Atlas.
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South and
Eurasia
Africa
10%
Global total: 193.5 trillion cubic metres
illumination technology to avoid the cost of cabling connection between the lighting points and
the national grid.
Further international assistance to the
energy sector in Egypt is that the EBRD
is assisting the Egyptian government by
signing an official agreement with the
NREA to implement the FIT program
through funding more than one billion
dollars in cooperation with the GCF.
Moreover, a cluster of ten banks
including the IFC, the private
investment arm of the World Bank has
invested 653 $ million in accomplishing
13 of the 32 solar plant projects at
(Benban) one of the world largest
photovoltaic park with 750 Mw PV
installation capacity for 37.5 Km2 installation area in upper Egypt allocated by NREA.
In 2017, the installation capacity of the renewable energy technologies was 45,192 Mw, and
the maximum load was 30,800 Mw; accordingly, 32.8 million consumers are used 1,950 Kwh as
electricity consumption.
1.2. Circumstances of the energy market in the GCC countries
The two figures are pointing out the production share of the GCC and the Middle East countries
comparing to the rest of the world in 2017.
Figure 6: global share of Oil & Gas production. Source: petroleum study and research centre of KSA.
18%
Middle East
19%
Central America
Global total: 1,696 thousand billion barrels
Figure 5: BenBan solar sark project in Aswan, Egypt. Source: Forbes Middle East.
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Concluding that the economy of the GCC countries is stable and sustainable in many years, the
key driver of the GCC economic growth is the accessibility to the enormous oil and gas
resources. Most of these countries are wealthy because of the small number of population and
the massive oil and gas reserves. KSA and UAE are the two largest economies in the GCC cluster,
with two-thirds of the total GDP. Based on the IRENA statistics in 2018, KSA has reached 47%,
and UAE has achieved 26%, followed by Qatar and Kuwait by 11% and 9%. KSA is considered
the highest oil producer after the USA and Qatar is the 4th largest gas producer.
Within the last ten years in the Middle East, there were radical changes in the political and
economic regimes. The Arabian spring revolutions since 2011 affected the energy market
structure.
From the economic point of view, the energy market structure dramatically changed
concerning the peak in the oil price in 2011 and the increase in the inflation rate. Further, the
Oil price is extremely volatile, but it is almost inelastic to the demand because the consumption
is not reducing in a short time. For this reason, OPEC always keeps its price below a certain
threshold, which would make better to switch to another energy source. Hence, to change it,
there is a necessity to change the price offer, and which is currently the OPEC objective.
Accordingly, the GCC countries realized that the future is toward the renewable energy after
the significant drop in the oil & gas prices which are the main income resource for most of the
GCC countries (KSA, UAE, Qatar, Kuwait, Bahrain, and Oman). In this region from an economic
perspective, the transition from fossil fuel to renewable is inevitable. The countries started to
set strategic plans through building internal strategic alliances between the Middle Eastern
countries, then, signed memorial of understanding with the European Commission, USA, and
the Far East countries who have the renewable energy technologies.
Remark: There are two main factors support GCC countries strategies.
1. The huge financial resources from the oil & Gas, as explained before.
2. The significant amount of solar irradiation as the fuel of solar power applications.
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1.2.1. Solar Irradiation in GCC
Generally, the average solar irradiation amount is GCC countries is as good as those in the other
countries of the Middle East and North Africa. According to the GHI map, the GCC countries
have abundant solar resources as shown in the figure, particularly in the North-Western and
central regions of Saudi Arabia and the southwestern region of Oman can generate 2,289
kWh/m2/yr, even Bahrain, Kuwait, Qatar and UAE have a useful annual average of the solar
irradiation.
Nowadays, there is a peak up in the national plans, targets, and strategies to adopt renewable
energy technologies in the GCC. Alongside energy efficiency, renewables play an essential role
in regional efforts to conserve natural resources and diversify the energy mix, which remains
heavily dominated by fossil fuels. Renewables also have the potential to generate valuable jobs,
innovate and knowledge-based economies. The relatively low oil prices that have prevailed
since 2014 have had little effect on regional renewable energy plans which have pushed down
prices for solar PV and other renewable technologies to levels that are competitive with oil and
natural gas.
Figure 7: solar Irradiation map in the GCC region. Source: International Renewable Energy.
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1.2.2. GCC countries’ targets toward energy efficiency & renewable energy
The GCC countries start to set objectives to face the challenges of the new energy market
circumstances. The following illustration summarizes the set of targets which are in the
implementation phase now.
Figure 8: renewable energy targets in the GCC countries. Source: International Renewable Energy Agency.
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The UAE has taken the first move toward setting the legislation for the energy efficiency
targets, pushing the other countries to engage with the sustainable energy targets under the
UNFCCC regulations, which became later a national trend for each member in the GCC and the
Middle East. Those targets gradually translated into policies and projects based on each country
GDP and the energy demand and supply in their market.
By 2030, KSA vision is to reduce 130 million tons of CO2 emissions by launching investment
programs in energy efficiency, including production and consumption perspectives. Moreover,
the adoption of energy efficiency measures to develop the water and wastewater management
and reduction in gas flaring from the oil & gas sector.
In 2016, UAE signed the Paris agreement for energy efficiency measurements. They decided to
approach the strategy of economic diversification that will yield mitigation and adaptation co-
benefits. Thanks to this strategy, they increase the share of the clean energy in the national
generation mix up to 24% by 2021. The ministry of climate change and environment initiated
“the national climate change plan of the UAE” to clarify the country strategy to reduce 40% of
the energy consumption in 2050.
The NDC in Bahrain relies on the energy efficiency in building, industrial sector and transport
and the energy sector but the small scale of renewable projects because the country is
geographically small, and the demand of the electricity is not too high. In 2018, the renewable
installation capacity included only 5 Mw On-grid solar PV plant operated by the ministry of
electricity.
By 2030, Kuwait has approved the reduction of the GHG emissions by releasing the regulations
to increase the renewable installation capacity and reform the prices of the petroleum
products. Additionally, launching less fuel intensive transport systems, including a metro and
railway project. The Kuwaiti Parliament legalized the environment protection law to promote
energy efficiency and clean energy.
Oman’s NDC calls for urgent energy measures policies state to boost the energy efficiency
technologies in different sectors such as transportation, electricity generation mix and
supporting the energy efficiency of the sustainable buildings.
KSA UAE Bahrain Kuwait Oman Qatar
Renewables
installation capacity
(2018)
142 MW 589 MW 6 MW 79 MW 8 MW 43 MW
Renewables share in
the total power
capacity (2018)
0.2 %
2 %
0.1 %
0.4 %
0.1 %
0.4 %
Future installation
capacity by (2022) 700 MW 3.14 GW 100 MW 1200 MW 2.8 GW 350 MW
Table 2: current and futuristic installation capacity of the renewables in the GCC.
Source: Middle East Electricity’s report.
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The national 2030 vision in Qatar pursues climate change solutions and aims the balance
between national electricity consumption and environment protection. Thus, the energy
legislation institution in Qatar has committed to promoting energy efficiency, clean and
renewable energy, education, and R&D to develop the infrastructure and the transportation
sector.
1.2.3. GCC countries plans and strategies toward renewable energy
After the clarification of the energy market resources, circumstances and the targets of the GCC
countries, it is the turn to identify the accelerations to approach these targets. The
accelerations here are policies and legislation that each country issues as guidelines to assure
the strategic plans and the road maps until reaching the energy efficiency objectives. Most of
the policies are common, but still, each country has specific priorities to achieve their vision.
1.2.4. Kingdom of Saudi Arabia
The public institution in KSA set a dedicated regulation as incentives to attract investments in
energy efficiency solutions. The first effective action is the government merged the ministry of
oil, and the ministry of electricity under one responsible organisation called the ministry of
energy.
Renewable energy plans and strategies
In 2016, the ministry of energy approved the national energy program aims to release several
renewable projects through regulated auctions. The 1st round was in October 2017, with the
issuance plans for one solar project and one wind project. There are several rounds to be
released by 2020. Moreover, the electricity and cogeneration regulatory authority approved
the net metering scheme for residential PV in 2017.
KSA has started the collaboration with Egypt and Jordan around the 2030 vision; the main
objective is building a new large business zone called Neom near the Red Sea and the Gulf of
Aqaba. The energy accelerator of Neom is renewable energy as a green city on 26,500 squares,
and the KSA Crown prince dedicated 500 billion USD as public and private investments.
1.2.5. United Arab Emirates
The energy market in UAE is the second largest one in the GCC after KSA energy market. The
public institution futuristic vision is toward enhancing the educational system and the
considerable investment in the research and development, the UAE considered as the leader
of the renewable energy applications in the GCC region, and they are also the largest and
fastest growing solar market. UAE has started by reducing the dependence on the oil & gas
sector as a main source of the national power generation and compensate the reduction by
releasing auctions that awarded more than 2 Gw of solar projects in the last years, considering
the PV technology has the largest share of 83% from 589 Mw renewable energy installed
projects.
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Renewable energy plans and strategies
In 2018, during the world government summit in Dubai, UAE announced to create the
sustainable development goals centre for the Arab Region. Besides the government institution
has launched several renewable energy strategies to reach the SDGs that included in the plans
of UAE Vision 2021, UAE Green Growth Strategy, UAE Future Energy Strategy 2050 and the UAE
Centennial Plan 2017 that ensured the country unified energy strategy as a law, an additional
focusing on the economic diversification, knowledge creation and technology innovation. The
strategies aim to increase the share of the renewable energy in the national electricity
generation mix to 50% by 2050, and the country has reachable short to medium term targets
to generate 27% of the energy from clean resources by 2021; also, this percentage will increase
by 15% by 2030.
The DEWA and Expo 2020 have signed an MoU aiming to have 50% of Expo power supply from
diversified renewable energy sources. The MoU included a pilot project considered as the first
solar driven hydrogen electrolysis facility in the GCC region.
1.2.6. Bahrain
Currently, Bahrain has a boosting in the population growth and industrial development, so the
power demand has increased gradually. The energy power generation almost depends on fossil
fuel. On the other hand, the country is the minor producer of crude oil among the GCC
countries.
The diversification of the electric power generation by adopting renewable energy technologies
is a necessity because of the new energy market circumstances.
Renewable energy plans and strategies
In 2017, Bahrain signed the Paris agreement for the climate change, based on that the
Kingdom economic plan vision to 2030 is approaching the SDGs and following the
Renewable Energy Framework of the League of Arab states. These approaches pool
together under NEEAP with obvious renewable energy production targets of 5% by 2025,
10% by 2035 and the efficiency of energy consumption target 6% by 2025. Its aims for
efficiency improvements in both energy supply and demand through 22 initiatives across
all economic sectors.
Regulatory framework and policy instruments
BAPCO is responsible for the project management of Bahrain PV park with 100 Mw of
installation capacity the commissioning stage of the project will finalise in 2019. Most of the
renewable energy projects will get funds from public and private investments. In 2018, the EWA
announced USD 720 million projects as an extension of the Bahrain PV park under competitive
bidding supervision from NEEAP. In early 2018, EWA announced a USD 17.18 million
investment in developing the Al Dur PV power plant and the Al Dur Wind Farm, with installed
capacities of 3 Mw and 2 Mw. BAPCO will further provide USD 25 million investment in 5 Mw
distributed power plant to supply electricity to the BAPCO town of Awali.
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1.2.7. Kuwait
The government in Kuwait has decided to support the renewable energy resources and
diversify the sources of the national electricity generation, exploiting only the oil production
for export to sustain the national economic progress. The government feasibility analysis for
the renewable energy projects assures the savings up to USD 750 million by 2030 comparing to
the adoption of the traditional technologies in the electricity generation.
Renewable energy plans and strategies
The energy vision is depending on 10% renewable energy by 2020 and 15% by 2030
contribution with an installation capacity of 5.7 Gw CSP, 4.6 Gw solar PV and 0.7 Gw wind.
The installation capacity divided into small, medium and large-scale projects.
KISR in Kuwait is responsible for the development of renewable projects such as 10 Mw of solar
PV capacity in Shagaya city, 10 Mw of wind and 50 Mw of CSP. The same organisation is
responsible for the 2nd phase of a solar power project in Shagaya with 1.5 Gw installation
capacity funding by Kuwait National Petroleum Company around 1.2 billion USD, and it is
expected to start the operation by 2022.
1.2.8. Oman
Comparing Oman’s oil & gas reserves with the other GCC, Oman has the smallest amount of
the hydrocarbon resources, hence they still fighting to access renewable technologies.
According to AER, they have one of the world’s highest solar energy densities and excellent
potential for wind technology due to the geographical position and the mountain typology of
their lands. Like its neighbours, the Supreme Council for Planning in Oman has started a
diversification-based economy strategy on the non-oil revenue.
Renewable energy plans and strategies
In 2015, the Public Authority for Electricity and water had started the national energy
strategy to 2040. The vision is to reach 10% of the generation mix from renewable energy
sources such as solar power and wind by 2025. The authority announced the first bid in
2017 for 500 Mw solar project encouraged by bank loans support and incentives from the
government plus a new bid for the 100 Mw solar plant awarded in November 2018.
The RAECO has released a short-term energy strategy for renewable installation capacity
of 90 Mw by 2020. In 2016, Oman had expansion from 2 Mw of the solar installation
capacity to 8 Mw in 2017.
The government committed a regulatory framework developed by AER, including FIT
incentives to motivate the distribution companies to aggregate the residential rooftops
and to auction their building surface for solar PV development. The AER identifies qualified
residential buildings and invites the qualified customers to join the pool, followed by a
tender for private investors to install the solar system on each building.
The AER sets minimum technical standards and a FIT rooftop PV that gain the benefits of
2 billion m3 of gas saving over 25 years with a monetary value of 1 billion USD and Co2
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emission reduction of 3.2 million tons over 25 years. Further benefits, the reduction of the
average yearly electricity bills for the customer about 42% and decrease the needed
investments for electricity networks and generation capacity.
1.2.9. Qatar
The government has started to balance between natural gas and renewable energy sources in
the national power generation. They decided to exploit the profit from exporting natural gas
as financial resources to fund renewable energy projects.
Renewable energy plans and strategies
Qatar set national strategic plans, the first one is a long-term vision for 2030, and the second
one is shorter to be reached by 2022. since the country will host the 2022 world cup, the
ministry of energy and Industry aims at increasing the installation capacity of the solar power
up to 500 Mw by 2020 and announced a target of 10 Gw of solar power by 2030.
Regarding the strategic energy plan of 2022, Qatar General Electricity and Water Corporation
released a cooling system project for the world cup stadiums. They will power the cooling
system by 3500 Mw of solar power Installed capacity. They announced that the world cup
would be taking place in November and December of 2022 in order to reduce the tournament
cooling demand.
Regulatory framework and policy instrument
A collaboration between the General Electricity Corporation and Qatar petroleum has started
to initiate a prequalification of bidders for 500 Mw solar tender as the first stage by 2020.
Furthermore, these entities made a 500 USD joint venture with Siraj Power to reach
developments in the solar power plan sector.
1.2.10. Conclusion from the GCC market analysis
The energy resources, market circumstances, targets and the strategic plans in the GCC affirms
that there is a mega trend toward the transition from the traditional energy resources toward
renewable, particularly, the PV technology. That is creating new business opportunities in this
region. Italwarmi and Sustainergy reconsidered priorities of which country to focus on avoiding
wasting efforts and the distortion of the companies’ resources and capabilities. Therefore,
Italwarmi has decided to sign exclusive agreements with local companies in the GCC, which are
geographically small like (Oman, Kuwait, Qatar and Bahrain). The contracts declare Italwarmi
to supply Sunmaster’s products only to the second party and restricted selling to any third party
in the specified marketplace, on the other hand, the latter party have to reach pre-agreed
minimum quantity per year; besides, forbidden buying SSL products from a company other than
Italwarmi. Penalty terms impose on the party who causes any deviation from the exclusive
agreement terms. By now Italwarmi signed two exclusive contracts with Bait Al-Aseel in Kuwait
and Green Wave in Qatar that will generate at least per year 2 $ millions of revenues to
Sunmaster, 100,000 $ to Italwarmi and 33,000 $ for Sustainergy; further, there are two others
under negotiation with two companies in Oman and Bahrain. However, it is distinct dealing
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with the market in KSA and UAE. Both have larger geographical areas and higher competitive
market than others; hence, Italwarmi considered to perform an in-depth market analysis for
the two countries to exploit the opportunities as much as possible. Briefly, the agreements
strategy in the GCC is to sign exclusive contact in (Oman, Qatar, Bahrain, Kuwait) that will
generate consistent profit over three years and focuses all the substantial operating efforts on
UAE and KSA.
2. Chapter two (technologies)
The technical methodology
The concept of the PV system is generating the electricity when the solar panels exposed to the
sun rays during the daytime, then storing the electricity in a rechargeable battery backup to
utilise during the night.
Technologies of solar streetlights
Here in this chapter, the study of SSL & SPS components’ technical parameters. SSL is an
integrated system involving different technologies which are commodity products using in
several industrial sectors such as solar panels, LED lamps, batteries, cables, controllers, battery
boxes, mounting structures, poles, motion sensors and smart control systems.
Each element of the SSL system has distinct specifications; therefore, the choice of a suitable
device concerns the site inspection, the design and the system configuration. Most of these
technologies enhanced in terms of boosting the efficiency, lifespan and decreasing the prices
through the R&D departments by the time.
2.1. The lighting lamps
The lighting source is one of the vital electrical devices in SSL. From the consumption
perspective, the type of lighting lamp impacts the energy efficiency of the system. Hence, the
identifications of the commonly used lighting technologies and the comparison between them
are essential to convince the customers with LED as the most efficient technology.
There are four lighting technologies:
- Incandescent lighting.
- Gas discharge & induction lighting.
- Solid state lighting.
- Laser lighting.
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2.1.1. Incandescent Lighting
Thomas Edison invented the eldest lighting
technology in 1878. About this technology, the
electric current flows through the Tungsten filament
emitting the lighting and heat. The filament reaches
high operating temperature and transmits light over
a wide range of wavelengths. Through the operating
temperature, the colour of the light usually differs
from warm yellow to white.
The incandescent lamps release around 98% of the
input electric current as heat rather than visible light.
Incandescent lamps have flexible dimming
advantage and can be easily controlled
but are limited in terms of a lifetime because of the
fragility and the high stress of the filament and the fixture glass. The main benefit of the
incandescent is the reasonable price, high performance and the easiness of the installation.
2.1.2. Solid-State Lighting
The title solid-state refers commonly to the light emitted by electroluminescence. There are
three types of light-emitting diodes used in the lighting systems and mostly different from the
incandescent technology or fluorescent one in a sense that they convert most of the energy in
visible lights rather than heat.
LED technology developed at the beginning of 1900. Within ’90s researchers start to improve
the LED technology to reach high energy efficiency and a wide range of colours; thus, the LED
technology turned to be quality and price competitive technology for indoor and outdoor
lighting.
There are three types of the solid-state lighting technologies:
- LED.
- OLED.
- PLED.
The LED lamp consists of a chip and a driver:
• The chip carries two elements of the treated
material called P-type and N-type
semiconductors that can generate photons
through a process of spontaneous emission.
They are placed in direct contact, forming a
region called the P-N junction, that has a
transparent package, allowing lighting rays to
pass through.
Figure 9: Incandescent Lamp. Source: Phillips catalogue.
Figure 10: LED Lamp configuration. Source: Sunmaster online course.
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• The driver optimises the power required for the LED chip and fixed inside the luminaire.
Nowadays, LED technology is one of the most diffused lighting technologies in the market
thanks to several advantages, e.g. long life, durability, design flexibility, low price, and
energy efficiency.
OLED
OLED is manufacturing by using organic materials. This technology is still under development,
but available with a coloured range based on the molecular thin film. OLED has beneficial
attributes such as low price and high performance compared with the other solid-state lighting
technologies. Only LED within the solid-state lighting technologies is considered as the highest
competitive technology with OLED in the current market.
The R&D departments of several lighting companies are working on the OLED improvement in
order to raise the product potentiality and prove the applicability of using OLED technology in
outdoor applications.
PLED
In this type, polymers are used as a manufacturing raw material to produce electroluminescent
conductive emitting diodes.
PLED is an energy efficient; but it is in the pre-commercialization phase and still under
development to be economically efficient and competitive with the most diffused outdoor
lighting technology LED. PLED designed as a thin film display with specifications of high
brightness, full-spectrum, and low drives voltage, though the enhancement of the PLED
technology strictly linked with the OLED technology because of the similarity of the
functionality principle.
2.1.3. Gas Discharge Lighting
Recently, gas discharge lighting was adopting as neon lighting technology for the indoor lighting
applications, and after a particular development, by adding some substance like Sodium, metal
halides and mercury, it is involved in the outdoor lighting. Each of these materials presents
different specifications related to prices, energy efficiency, performance, lifetime and light
colour. The gas-discharge lamps provide the light when the electric current passes through an
ionised gas.
Electrode
Glass Bulb
Lead Wire
Plasma
Figure 11: diagram of Gas Discharge Lighting.
21 | P a g e
There are different types of discharge lamps representing the following:
• Low-pressure sodium lamp: it is the most efficient type of gas-discharge lamps that work in
an operating pressure lower than the atmospheric one. They are the most efficient gas-
discharge lamp type. Since it generates a monochromatic yellow light, it is using in only
specific applications.
• High-pressure sodium lamp: this technology has the same functionality as the low-pressure
sodium lamp. It has a high working pressure which specifies high performance but low
energy efficiency.
• Fluorescent lamp: mercury is the primary raw material in this lamp. The electric current
passes through the mercury to excite and produces UV light to be absorbed by a phosphorus
coating inside the lamp that produces the visible light.
• Compact Fluorescent lamp: this type has the same manufacturing material of the traditional
fluorescent. The companies developed it to overcome the design defects of the fluorescent
one and make it fit the outdoor lighting systems. The compact bulb specified with higher
energy efficiency but a higher price than the conventional one.
• Mercury Vapor lamp: the functionality is the same as the previous lighting technologies
once the electric current passes into the vaporised mercury, the light comes out. It is more
efficient, and longer lifetime than the fluorescent technologies, on the other hand, it has a
high intensity of white light that decreases the competitive chances in the outdoor lighting
market.
• Metal Halide lamp: the manufacturing of metal halide lamp involves a mixture of halide and
vaporised mercury. Accordingly, this lamp is more advanced technology than the mercury
vapour in term of energy efficiency and design.
• Induction Lighting: recently, the induction lamp had a low diffusion in the market lighting
until 1970 when General Electric and Philips acquired their patents. The R&D departments
upgraded the induction technology in order to increase the efficiency and make the design
applicable in the outdoor lighting systems that made the technology became more diffused
technology and spread at a wide scale.
Mercury
Electromagnet
Fluorescentpowder
Frequencegenerator
Figure 12: diagram of the Induction Lighting.
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Induction Lamp technology involves several chemical components (e.g. mercury, argon and
krypton). The light generates by using an electromagnetic field to excite the chemical
substances, then, creates UV rays inside the bulb that release the visible light. The working
principle and the structure of the induction lighting is similar to the fluorescent lamp, but it
does not have an electrode in the tube.
The induction lighting lamp requires three components indicated in the above-mentioned
image:
- Frequency generator.
- Electromagnet.
- Discharge tube.
Firstly, the generator creates a high-frequency current that passes in the electromagnet
generating an electric field. Then, the induction process starts by exciting the mercury and
forms visible light. This technology has the advantages of a long lifetime and high efficiency
compared to fluorescent technologies.
2.1.4. Comparison between lighting technologies
In this part, the review of an accurate analysis and precise comparison between all the previous
lighting technologies to identify the best available one, denoting out the economic and
technical characteristics. This comparison is in terms of the performance, energy efficiency,
costs and lifetime.
The technical parameters to evaluate the performance of each lighting technology
• Lifetime: is the parameter that describes the interval time from the first operation of the
lighting technology until discarded, estimating in hours unit.
• Luminous efficiency (lm/W): it identifies the efficiency of lighting technology. It is related
to the amount of light emitted from the light source, independent of the effect of the
luminaire and any optical control. Luminous efficiency is measured as the ratio of luminous
flux to wattage power.
• Colour temperature (K): this parameter refers to how warm or cold the light appears. It has
a unit measure in degrees Kelvin (K), the higher the value, the cooler the light. Commonly in
street lighting are using 6,000K cool white lights, but in some urban area are requesting
warm white at 2,700K.
• CRI: it describes how well a white light source performs in accurately displaying the colours.
It gives the ability of the artificial light source to reveal the colours of various objects
regularly in comparison with the natural light source. The higher is the value, the more the
light is similar to the natural one. Natural light has a CRI of 100.
• Dimming control: it refers to the flexibility of the optimisation of the lamp lighting power
and the related variation of luminous flux.
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Parametrical comparison
In the table a statistical comparison between all the parameters of available lighting
technologies.
Light
Technology
Lifetime
(hr) CRI
Color
Temperature
(K)
Luminous
efficacy
(lm/w)
Start time
(min)
Dimming
control
Incandescent 1,000-
5,000 100 2,800 11-15 Immediately Excellent
Low-Pressure
Sodium
10,000-
18,000 0 1,800 100-180 Up to 15 No
High-Pressure
Sodium
12,000-
30,000 25 2,000 60-130 Up to 15 Very low
Fluorescent 10,000-
20,000 70-90 2,700-6,200 50-100 Up to 5 Good
Compact
Fluorescent
8,000-
20,000 85 2,700-6,200 40-72 Up to 5
Mercury Vapor 12,000-
24,000 15-55 4,000 40-60 Up to 5 No
Metal Halide 6,000-
20,000 65-95 3,000-4,300 70-110 Up to 15 Very low
Induction 60,000-
100,000 85 2,,700-6500 62-95 Up to 5 Good
LED 5,0000-
100,000 85-90 32,00-6,400 70-160 Immediately Excellent
As a summing-up, the LED lighting technology is considered the best available solution among
all the traditional ones in terms of the performance, energy efficiency, lifetime and cost. From
the market feedback, most of the purchasing requests are to the LED lamps, and all the
competitors are focusing on manufacturing LED with different wattage range and exploit their
R&D departments to enhance the quality besides reducing the production cost to keep the
sustainability.
Comparing this technology with the other available electric-based lighting technologies, it
appears evident as LED reaches better performance results in artificial and outdoor lighting
applications.
Additionally, the competitive traditional lighting technologies are the low-pressure sodium
lamps, but unlike LED, their low flexibility of dimming light lessens their competition
potentiality in the outdoor lighting applications, further assurance based on lighting researches
Table 3: Comparison between the lighting technologies, the data are extracted from the following sources: Lighting technologies comparison. http://www.gigavision.com.au/study-centre/lighting-technology-comparison , Studying material of Economic Assessment for Energy Efficiency Solutions in industrial buildings. Prof. Giovanni Toletti, 2017, Catalogue from the technical department in SunMaster and Isolar. China.
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in Italy will be reviewed next topic, all the energy efficient lighting projects related to the
substitution of the traditional lighting technologies with LED lights.
Cost
The LED lighting market is roughly competitive due to the demand increase, and the price
depends on several factors, for instance, the production technologies, labour market and
acquisition of the raw materials, therefore the leading manufacturers in the lighting market
exert a lot of efforts and investments to sustain the price ware and gain a competitive
advantage. In the Chinese market, the price of bulk orders is lower than the medium and low
quantity orders, and mainly most of the manufactures deal as B2B. There are expectations refer
to the reduction of the LED lamps prices in the upcoming years.
Energy efficiency
The notion of the paper based on the energy efficiency methodology, it is one of the main
drivers to support the growth of the LED lamps market, because LEDs can provide a high light
intensity by consuming less electricity than the traditional one. The reason for this low energy
consumption associated with the fact that the light emitting diode technology transforms most
of the electric power into visible light rather than heat. Less than 10 % of the power used by
incandescent lamps is converted into light because a large amount of power converts into heat.
Remark: Sunmaster has licences to use the chip of Philips, Cree and BridgeLux.
Control An advantage is an easiness in controlling the dimming of LED lamps without a negative effect
on the lifetime or the performance. The LED lamps have high flexibility in the dimming mode
of the management control system compared with the other traditional technologies.
Sunmaster LED lights can work for 12 hours at full power (100%) or with dimming mode 100%
for 4 hours + 60% for 2 hours + 30% for 6 hours. While most of the fluorescent lamps can reach
only about 30% of full brightness and characterise by a step-level dimming. For this feature,
LEDs are the preferred technology in the SSL projects that usually involve smart control and
dimming systems. Furthermore, traditional light sources tend to have a shorter lifespan during
the more they are dimmed on and off, whereas LEDs are unaffected by rapid cycling. In addition
to flashing light displays, this capability makes LEDs suitable for the lighting integrated system
All-in-one, including the motion sensors.
Remark: All-In-One is an integrated lighting system that Sunmaster introduces with different
ranges of wattage power.
Lifetime
The LED long lifespan reduces maintenance cost and long-term operating cost contrasted to
the standard lighting technologies. The lifespan is the average length of working life of a
material object uses in specific operating conditions. The junction temperature influences the
lifespan because the LED chips are susceptible to the temperature; the LED chip with low
quality heat dissipation has a shorter lifespan.
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Another feature, the High-quality housing of the LED lamps in the SSL application, is an essential
factor in enhancing the lifetime during the operating hours. Also, avoiding the exposure of the
lamp to the dirt and the rain increase the lifetime. Therefore, it is necessary that the street light
LED lamp has an IP65 that enable it to work in the dusty and rainy environment.
Remark: the IP is a protection measurement of the LED will have against solid objects such as
dust, sand, dirt and liquids.
Among the traditional technologies, only the induction lamps can reach a competitive level
with LED lifetime, but they are not energy efficient. The LED bulbs to last ten times more than
the compact fluorescent bulbs and around 100 times longer than typical incandescent bulbs.
This advantage facilitates the operating and maintenance plan because, in the worst-case
maintenance scenario, LEDs continue operating but with a low output that makes the operators
avoid urgent intervention.
Beam angles according to IESNA standard
Each lighting source has a beam angle that refers to the directionality of the generated light
rays; the beam angle is the measurement of lighting distribution. The traditional lighting
technology has a wide beam angle that can reach 360 degrees as the light spreads to all the
way directions but with less intensity.
The LED lighting technology can optimise the beam angle concerning the project requirements
and makes the lighting distribution on a focal point to illuminate a specific area and avoid the
lighting distortion. It is possible to reach that by applying special lenses over the led chip that
changes the standard flux of light.
The optimisation of the beam angle is a crucial determinant in the SSL applications to identify
the distance between each pole on the roadsides. Practically, it requires a wide beam angle in
some projects of the SSL alongside the road and narrow one regarding the width of the road.
Therefore, the flexibility to regulate the beam increase the efficiency of the system.
Figure 13: typical life of standard lighting technologies. Source: the elusive “life” of LEDs: How TM-21 contributes to the solution. LEDs Magazine, November 2011.
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2.1.5. Smart Lighting projects in Italy (European reference)
This topic aims to end the doubts about the benefits from the execution of the SSL and raise
the sustainable advantages, addressing the economic, social and environmental features.
Considering the flow of the technologies starts from Europe and America to reach the Middle
East and Africa; it is important to note these advantages to the customers and show them the
benefits come out from practical projects have successfully implemented in the European
countries as a reference.
As a result from the statistics and reports of the Italian association of lighting manufacturers
(ASSIL), there are 1,308 smart city’s projects in 158 different municipalities with total
investment 3.7 billion Euro, among these projects at least 46 are related to the smart street
lighting in which the substitution of the traditional lighting technologies with the LED lighting
technologies.
Bergamo
Bergamo city started a Smart City lighting project for increasing energy efficiency, reducing
general costs and obtaining more eco-sustainability and safety. The project established by
replacing more than 15,000 of traditional lamps with LED lamps.
Thanks to the efficiency of smart lighting systems technology, the city achieved 50% of energy
saving and 3.15 million euros over nine years.
Bergamo diminished the electricity consumption from 8.8 million kWh to 5 million kWh yearly
in addition to obtaining many advantages in terms of energy efficiency, safety, light quality,
and sustainability.
With the new LED lighting solutions, Bergamo city avoids replacing 5,000 lamps every year
besides the smart control system the city has the chance to check the lighting system for all the
time, being informed about any possible damage in real time. Bergamo releases 1,600 fewer
tons of CO2, 900 tons of oil equivalent and 0.7 tons of RAEE.
Brescia
Ago, Brescia has utilised the smart lighting systems by accomplishing an energy savings project
and substituting all the traditional lamps in public lighting with LED lights. They replaced more
than 16,000 luminaires. According to these improvements, the Commune anticipates a 40%
drop in energy consumption. That led to financial saving up to 8 million euros within ten years
and a reduction in the maintenance cost due to the long-life cycle of the LED bulbs. The impact
on the environment is favourable, causing a cut of more than 1.5 tons per year of RAEE, the
replacement of the traditional lamps removed any mercury traces regarding the reference
standards. On the social level, the design of the lighting system has guaranteed better lighting
for citizens’ safety.
Montecchio Emilia
In 2013, The municipality of Montecchio Emilia had decided to implement an innovative public
lighting system to follow the trend of smart cities and adopting smart street lighting services.
The project was built to replace more than 2,300 lighting fixtures with a capacity of 303,773
27 | P a g e
kW having a massive consumption of 1.6 million kWh, by inserting management control system
in ten lighting poles to control four security cameras and nine hotspot access points to activate
the WI-FI service for the public users in Montecchio historical centre.
Beneficial from the smart street lighting and services, the power consumption deducted from
303,773 kW to 150,000 kW approximately saving one million kWh as a more than 55% of energy
savings.
Turin
Municipality to realise significant cost reductions and 60% of energy savings. By following the
Horizon 2020 European projects and the indications of the European Commission energy
targets, Turin has turned into a smart city.
Turin has represented a prestigious project for resolving the main problems in terms of energy,
environment, and mobility. The goal was to launch a new model of development, which is both
socially and economically credible and has effective results. Turin is officially a greener city;
Nowadays, it saves 10,700 fewer tons of Co2 and 4,000 tons of oil equivalent. The smart lighting
systems allowed Turin to reduce the average of every single luminaire from 150W to 75W.
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Acknowledging the previous results of the projects in Italy, it confirms that LED requires less
power than traditional lighting technologies, rising the energy savings, notably for street
lighting systems in which the lighting lamp operates for a long time. The only competitive
traditional technology with LED is low-pressure sodium, but it has a limited lifetime and
dimming control lower than the LED one.
Remark: the previous topic is in use in case the customers in the Middle East still asking the
benefits from implementing Smart SSL system, Italwarmi & Sustainergy usually attach this part
of the study with the project’s feasibility analysis and the energy assessment files.
Bergamo Montecchio
Emilia Brescia Turin
Purpose
Increase energy
efficiency and light
quality, reduce costs and
be a more eco-
sustainable and safe
city.
Be up to date
with the smart
city trend, and
benefit from the
advantages of the
smart street
services.
Implement a smart
lighting system to
take advantage of
the energy savings
and replace all
public lamps with
LEDs.
Align the city with
the 20-20-20
European
framework in
terms of energy
efficiency,
environment and
mobility.
Strategy
Replace 15,000
traditional lamps with
LEDs.
Replace 2,300
lighting fixtures,
install 4 cameras,
9 Wi-Fi access
points and a
management
control system.
Replace 16,000
traditional lamps
with LEDs.
Turn into a “full”
smart city
Reduce the
average
consumption of
luminaires from
150W to 75W.
Savings
Reduced energy
consumption by 43%
3.15 million € net
savings within 9 years.
Avoided replacement of
5,000 lamps.
Reduced energy
consumption by
55%.
Reduced energy
consumption by
40%
8 million € net
savings within 10
years.
Avoided
replacement of
2,500 lamps and
10,000 luminaires
per year.
Reduced energy
consumption by
60%
Saving of 10,700
tonnes of CO2
(4,000 tonnes of
oil equivalent) a
year.
Table 4: comparison between the smart lighting projects in Italy, affirming LED is the best available
technology in the lighting applications.
Sources: Reverberi, ASSIL, Phillips Italia projects references.
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2.2. Solar panels
The solar panel technology is the power generator of the SSL. It is a renewable energy
technology that supplies the lighting fixture with the power to sustain the illumination. The
solar panel converts the incident sun rays on the earth surface into electricity due to the silicon
material. The silicon as a semiconductor is the core raw material of the solar panels
manufacturing.
The solar panel is manufactured by the using the doping process in which the insertion of
phosphorus substance from the fifth group and boron element from the third group in the
crystalline structure of the silicone, then the connection of two different layers together.
In the current market, there are a lot of solar panel types, Such as Monocrystalline,
polycrystalline, Transparent solar panels, amorphous silicate, cadmium telluride, CIGS-CIS and
organic cells. As noted in the table, the solar panels types have different efficiency range based
on the raw materials. In the upcoming years, the photovoltaic market reaches a massive
flourishment thanks to the investment in the R&D to improve the efficiency of the
underdevelopment solar panels.
The most diffused solar panels technologies in SSL applications are monocrystalline and
polycrystalline because they have high technical and economic efficiency.
Mono-
Crystalline
Silicon
Poly-
Crystalline
Silicon
Amorphous
Silicon
Cadmium
Telluride CIGS-CIS
Efficiency 16-21% 15-20% 6-9% 10-14% 11-13%
Maturity Mature Mature Under Development Under
Development
Under
Development
Advantages
• High
efficiency.
• Reliable
technology.
• High
efficiency.
• Reliable
technology.
• High
architectural
integration.
• Good efficiency
for irradiation
diffusion.
• Production
cost
reduction.
• Production
cost
reduction.
• Long term
performance
stability.
Disadvantages • Higher
unitary
cost.
• Higher
unitary
cost.
• Low efficiency.
• Low stability of
long-term
performances.
• Cadmium
toxicity.
• Difficult
acquisition of
raw
materials.
Table 5: comparison between the types of solar panels.
Source: studying material of Energy management & sustainability Prof. Vittorio Chiesa.
30 | P a g e
The difference between monocrystalline and polycrystalline
Silicon solar panels are the most popular technologies that dominated 80% of the PV market.
There are differences between monocrystalline and polycrystalline in the shape and the
performance. Both have a reliability and maturity market. Appointing the difference between
the Mono & Poly- crystalline solar panels is essential for selecting the right panel type in the
early phase of project management to fit the requirements and estimate an accurate feasibility
analysis.
2.2.1. Monocrystalline silicon solar panels
The external dark black colour characterises the Monocrystalline
silicon solar panels. It is manufacturing from cylindrical silicon
ingots that cut into wafers. They have higher efficiency by better
exploitation of the sun irradiation due to the purity of the silicon.
Advantages of monocrystalline silicon solar panels
- High efficiency.
- Smaller installation area.
- Long lifespan.
- Excellent performance under low irradiation conditions.
Disadvantages
- High expensive solar panels.
- Circuit breakdown when the solar panel covers with dirt,
shade or snow.
- Lower performance while increasing the operating
temperature.
- Silicon waste during the manufacturing process.
Figure 14: Monocrystalline Solar Panel. Source: Amerisolar technical
data sheet.
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2.2.2. Polycrystalline silicon solar panels
It has a commercial name multi-crystalline solar panel. Unlike
monocrystalline solar panels, melted silicon poured into a
square mould, cooled then sliced into square wafers creating
the shape of polycrystalline.
Advantages
- The production process is simpler and cheaper than the
monocrystalline solar panel.
- No silicon wastes.
- Higher performance while increasing the operating
temperature compared to the monocrystalline solar
panel.
Disadvantages
- Lower efficiency due to low silicon purity.
- Require higher installation area than the monocrystalline
solar panel.
- Lower architecture integration.
2.3. Battery
The energy storage system is critical to enhancing the diffusion of renewable energy
technologies in several electricity applications, primarily in the Off-Grid (stand-alone) solar
street lighting systems. Therefore, the European Commission supports the energy storage
industrial sector to achieve its 2020 energy objectives of reducing GHG emissions.
Technically, the energy storage battery increases the flexibility of the renewable energy
technology. In the solar street lighting application, the battery is necessary to store the
electricity produced during the daytime to power the LED bulb during the night. The batteries
solve the problem of output wattage variability by providing a constant power source to run
the LED light in the solar street lighting system.
The battery is an electrochemical cell consists of two dissimilar electrodes and electrolyte. The
anode is a negative electrode, and the cathode is a positive electrode. The electrolyte is the
medium that separates between the two electrodes and in charge of the ions flow from the
cathode (-ve) to the anode (+ve).
The functionality of most batteries is standard; there is a REDOX electrochemical reaction inside
the battery; the reduction and oxidation reactions occur during the charging and the
discharging process. The electrons are produced from the oxidation reaction and flow through
an external circuit to achieve the discharging process, at the same time the ions generate by
the cathode from the reduction reaction and transfer via the electrolyte to compensate the
loss of ions. There are many types of energy storage systems in the renewable energy market
(e.g. the Lead Acid battery, Lithium Iron Phosphate battery, Nickel-cadmium battery and Nickel
metal hydride battery).
Figure 15: Polycrystalline Solar Panel. Source: Amerisolar technical data
sheet.
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2.3.1. Lead Acid battery
The Lead Acid battery is one of the oldest energy storage technologies, and it has various types.
All designs of lead-acid share the same basic chemistry, where the positive is the electrode
made of lead-dioxide, while the negative electrode formed of metallic lead and the electrolyte
is sulfuric acid.
• Flooded Lead Acid batteries: are electrolyte filled batteries, FLA requires regular
maintenance to equalize charges and to keep the top and terminals clean. It has an average
lifespan and low cost per Amp hour.
• AGM batteries have a little internal resistance that gives the advantage to power a high
current intensity and provides suitable electrical reliability. The advantage that AGM battery
has a charging rate five times more than FLA.
• GEL batteries have the same internal material of
the AGM type. The main difference in the
electrolyte of the AGM battery is a liquid. In
contrast, in the gel battery, the electrolyte has
some solid silica additive. The price of the Gel
Batteries is slightly different from the AGM battery,
and it characterizes by slower discharge rate and
higher operating temperature.
2.3.2. Lithium-Ion battery
The Lithium-ion batteries are the highest diffused rechargeable battery in which lithium ions
move from the anode to the cathode during the discharging process, and from the cathode to
the anode during the charging. Almost the anode's raw material is graphite. There are different
types of Lithium Ion batteries concerning the cathode material, e.g. a layered oxide (such as
lithium cobalt oxide as noted in the figure), a polyanion (alike lithium iron phosphate), or raw
material same (Nickel-cobalt-Aluminum). Originally the battery usage depends on the choice
of the material for the anode, cathode, and electrolyte; thus, the battery specifications are
changing dramatically.
Figure 16: GEL Battery. Source: Sunmaster catalogue.
33 | P a g e
The most popular Types of Lithium-Ion batteries are:
1. Lithium Iron Phosphate is a sort of Li-Ion rechargeable battery for high power applications.
LIP cells feature with high discharging current, non-explosive, and long cycle life; however,
on the downside, its energy density is lower than regular Li-Ion batteries.
The Lithium Iron Phosphate technology is characterized by high thermal and chemical
stability, which provides better safety than other Lithium-ion technologies made of different
cathode materials. LiFePO4 is more stable under overcharge or short circuit conditions, and
it can withstand the high temperatures without degradation.
2. Lithium ternary: power lithium ternary primary raw materials are NCA, due to high
temperature, the NCA structure usually becomes unstable. It has low performance under
high operating temperature. Lithium ternary batteries have a lower lifecycle than the
Lithium Iron Phosphate batteries.
The most diffused energy storage systems in the solar street lighting applications are Gel
batteries and the Lithium Iron Phosphate. There is a considerable difference between them
in term of the technical specifications and the prices.
𝐿𝑖𝑥𝐶6 ⇌ 𝑥𝐿𝑖+
+ 6𝐶+𝑥𝑒−
𝑥𝐿𝑖+ + 𝐿𝑖1−𝑥𝐶𝑜𝑂2+ 𝑥𝑒− ⇌ 𝐿𝑖𝐶𝑜𝑂2
Charge
Charge
Discharge Discharge
Charge
Discharge
Figure 17: Lithium Ion battery chemical reactions. Source: Studying material of fundamentals of energy technologies Prof. Matteo Zago (Polimi).
34 | P a g e
The table as mentioned earlier is figuring out a comparison between two of the best available
technologies in the batteries’ market that are used in the solar street lighting systems so as
indicated the differences between LIP & GEL batteries technical specifications.
Lithium Iron phosphate has significantly higher cycle life than Gel battery; thus, the working
lifetime of the LIP is higher than the Gel. All the electrical parameters such as voltage, power,
energy density, the specific energy of the LIP is higher than the gel batteries. Additionally, the
maximum temperature limit in the LIP is higher than gel batteries that give LIP higher internal
chemical and thermal stability.
2.4. Controllers
The controllers are a crucial component in the SSL applications. The role of the controller is to
regulate the input and output electrical current of the battery. Whatever the battery type, the
controller is used to secure the battery from damaging factors such as overcharging and
discharging.
LIP GEL
Nominal Voltage 3.3V 2V
Energy Density 300 WH/L 100 WH/L
Specific Energy 128 WH/KG 40 WH/L
Power 1,000 W/KG 400 W/KG
Cycle Life 5,000@ 80% DOD 1,900 @ 80% DOD
Calender Life 8-12 Years 5-8 Years
Max. Temperature 40 25
Safety High Moderate
Table 6: comparison between LFP and Gel battery.
Source: solar electricity handbook, Sunmaster batteries’ technical data sheet.
Figure 18: Controller. Source: Sunmaster catalogue.
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2.4.1. Types of controllers used in the solar streetlight applications
- PWM controller (Pulse-Width Modulation) aims at ensuring that the charging process
never reaches the overcharging of the battery. The PWM controller allows a certain
amount of current that meets the battery target voltage to input. After reaching the
charging target, the controller disconnects between the battery and the solar panel.
- MPPT controller (Maximum Power Point Tracking): the concept behind using an MPPT
controller is to provide an indirect connection between the battery and the PV array.
This connection type includes a DC/DC voltage converter takes extra PV voltage and
transforms it into additional current at a lower voltage without necessarily losing the
power.
The optimisation of the electric current flow due to an adaptive algorithm allows the controller
to follow the maximum power point of the solar panels after adjusting the incoming voltage,
to maintain the most efficient level of power for our system. On the economic side, the price
MPPT controllers are higher than PWM controllers and the efficiency is up to 15-20% higher
than PWM. Generally, for small application such as a solar streetlight, a PWM controller is
economically efficient. On the other side, MPPT is suitable for large solar power systems.
Figure 19: diagram of how the PWM controller works in the SPS. Source: Sunmaster online course.
Figure 20: diagram of how MPPT controller works in the SPS. Source: Sunmaster online course.
36 | P a g e
2.4.2. Advantages of controllers
Besides the necessity of the controller, they have the following advantages:
- The reverse protection: if the reverse flow occurs, the solar panel acts as a load on the
battery; thus, it absorbs the electricity directly from the battery leading to unnecessary
discharging. The controller works to prevent the reverse current by facilitating the one-
directional flow of current from the solar panel to the battery and cuts out the reverse
flow during the night.
- Overload or overcharging protection: overcharging the batteries is an unrecommended
behaviour because it could reduce their lifetime. The controller role is to stop the
charging of the batteries once they are sufficiently charged.
- Temperature protection: since the increase of the system components operating
temperature harms the overall system performance and sustainability. The controller
can protect the system by reducing the power or switch off in case of increasing the
operating temperature thanks to the temperature sensor inside the controller.
- Starting on-off: the controller detects the voltage from the solar panels. If the voltage is
close to zero, it means it is becoming dark, and the light should be switched on. The same
for switching off, when the sunlight starts to produce electricity through the solar panels,
it means no needs to power the LED; accordingly, it switches off.
- Dimming: one of the controller functions is to dim the LED light. The lamp can work at
100% for a certain period and then dim to 50% until reaching 0%. The highest
performance of the Illumination system reached at its brightest level (100%) during peak
times of high traffic and then dimmed to accommodate times of low traffic, allowing for
maximum energy efficiency.
- Light driver: the controller has a built-in LED driver function. The LED driver is an
electrical device having a control loop built into them to regulate the input LED power
by providing them with a constant quantity of power. The power level of the LED is
maintained constant by the LED driver because of the variability of the temperature up
and down effects on the electrical properties of the LED light. Without the proper driver,
the LED may become too hot and unstable, causing poor performance or failure.
2.5. Metal structure
After the explanation of the electrical devices of the SSL, now the turn to identify all the
mechanical component that supports the structure of the lighting system, they are
representing in poles, arms, mounting structures and the foundation kits.
2.5.1. Poles
Mainly, there are four types of poles used to support streetlight luminaires and all the system
components. The poles are classified based on their manufacturing raw material such as wood,
reinforced concrete, steel and FRP.
The most common pole uses in the street lighting applications is steel poles regarding the long
lifespan, good architecture shape and ease installation. Steel is exceedingly durable compared
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to other metals, and it is 100% reusable, making it fully compliant and matching with the cradle-
to-cradle policy.
Also, it has highly beneficial properties in respect of metal-fatigue. It is insensitive to galvanic
corrosion and is suitable for welding. A thermally galvanised pole is guaranteed to stand for at
least 40 years without maintenance, and the well-preserved pole has a theoretical limitless life
span.
There are factors to be considered when selecting a pole for streetlight application such as wind
calculations and application location like desert or close to the sea locations, a further factor,
the mechanical loading of the attached components such as LED fixture, solar panel, controller
and batteries. Also, flags, banners, billboards or any similar items will be attached to the pole
in the future should be considered. The selected pole must have sufficient strength to
withstand the loading of these external loads.
Poles manufacturing based on the project’s specifications because for each project, there are
dimensions variety such as the cylindrical radius, the thickness, the height and the pole design.
2.5.2. Arms
As shown in the figure, the arm is holding the luminaire next to the top point of the pole.
Luminaire outreach arms are curved or straight and the length of the outreach is the horizontal
distance from the vertical centerline of the mast to the tip of the outreach, excluding the lamp
mounting spigot. The arm is installed horizontally to the pavement with a 5-degree angle as a
maximum.
Figure 21: the arms position in the solar streetlight system. Source: Sunmaster catalogue.
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Factors are considering for the pole arm selection:
- The pole types.
- Pole location to curb or roadway.
- Arm strength: the arm length must be sufficient to withstand the weight of the luminaire
and the wind loading on the luminaires.
2.5.3. Brackets
Brackets are necessary components in the solar street lighting applications to assembly all the
solar street lighting system components to match the system design.
Nowadays, there are several brackets available on the market for fixing the solar panel and
lighting fixture, the purchasing decision based on the bracket’s material, the dimensions and
the price.
The bracket shape is noted in the sketch and shown its position in the solar street lighting
system.
Figure 22: drawing of the arm design. Source: Sunmaster technical data sheet.
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2.5.4. Corrosion protection
The majority of the poles in the SSL are manufacturing from steel Q235. This type has
protection from the air oxidation, salt and moisture that result in material corrosion to increase
the lifetime of the steel pole, it must be treated for preservation. In case an application involves
untreated pole, then it gradually eroded and discarded in a short time. The universal protection
methodologies for the poles steel are thermic galvanisation and the powder coating.
2.5.5. Thermic galvanisation
In 1742, the French chemist Malouin discovered the galvanisation process to preserve steel
against air oxygen, salt and moisture. Nowadays, the poles workshops have a developed
economic galvanisation process using the SSL industry. The HDG is a form of galvanisation; it is
the method of covering iron with zinc, which combines with the film of the base steel when
dipping the metal in a bath of molten zinc at a 449 °C temperature.
When the surface of the steel exposed to the atmosphere, the pure Zn reacts with oxygen
atoms to form zinc oxide, which further reacts with carbon dioxide to form zinc carbonate, a
usually dull grey, relatively durable material that protects the steel underneath from further
corrosion in many rough weather conditions. Galvanised steel is using in applications where
corrosion resistance is vital without affording the high of stainless-steel poles, and It has a
superiority in terms of cost and lifecycle.
Figure 23: drawing of the connection between the split system’s components. Source: Sunmaster online course.
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The thermal galvanisation has significant advantages concerning other preservation methods:
1. Full submersion in which the entire steel surface is coating with a layer of zinc. Besides, the
inside of the pole and steel components surrounding and attached with the pole.
2. Lower cost than stainless.
3. Long life expectancy.
4. Coating life and performance are reliable.
5. Outstanding resistance to mechanical damage.
2.5.6. Powder coating
It is the method for the creation of a protection layer on the steel structure to prevent from
the corrosion by applying a dry powder on the steel, then using the electrical charges to adhere
the powder on the intended steel surface. At the last stage of the process, the steel is heated
in a furnace at temperature 180°C, that resulting in a complete powder adhesion to the steel
surface. The powder ultimately hardens into a high-quality protective layer.
The advantage of the powder coating is the high resistance to mechanical stress. It forms a flat
surface area, which is easy to clean and has a long lifespan.
2.6. Cables
They are the connection that transmits the electricity from such a point to another. From the
technical point of view, the cables’ specifications should be chosen accurately to avoid any
damage that may happen in case overload occurred on poorly chosen cables.
2.6.1. Cables Definition
The electrical cable is producing through the assembly of two or more lines operating side by
side or bundled, which is used to transmit electric current from point to another. Electrical
cables consist of at least two conductors and typically have an outer covering. For cables
carrying higher voltages, the conductors within the cable encasing in a protective shield.
Cable sizing regarding the solar applications
Electrical cable sizes are expressing by gauge; a smaller value gauge indicates a larger size of
cable and the most common gauge for electrical cabling used in residential buildings is 12-
gauge range. Many large household appliances use electrical cables in the six to the eight-gauge
range.
Remark: to realise the importance of the cable sizing, imagine that when cables between
batteries back up, and from the batteries to the inverter have small size gauge, the available
current flow to the inverter is lower than the required, and it may fail to supply larger loads.
For example, if plugging the charger of the mobile phone to charge a laptop, the current flow
fails to supply the laptop battery efficiently regarding the low size of the cable. Appropriately
sized cables impose less resistance and thereby help to maximise the system efficiency;
therefore, there are recommended cables sizes for the SSL systems and a different one for the
SPS. While doing the design of the SPS, the designer should consider the expansion of the
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project as a factor that allowing the enlargement of the system installation capacity in the
future thus, the adoption of a higher current cable is the best choice.
2.6.2. Cable components
Besides the wires running side by side as a component of the cables, there are heat shrink
tubing and connectors.
Heat shrink tubing
It is a shrinkable plastic polymer tube used to protect
cables from external weather conditions and repair
the damaged wires or to connect them; also, it is used
to create cable entry seals, offering environmental
sealing protection. Heat-shrink tubing is making of
nylon or polyolefin, the polymer material shrinks
radially but not longitudinally when heated.
Connectors
They are electrical devices have plug and socket
connectors or terminal blocks, but individual screw
terminals and fast-on or quick-disconnect terminals
are more common than the socket connectors. Small electric components have bare lead wires
for soldering which are manufactured using casting. There are various connectors such as
plated copper lugs, blade connectors, ring and spade terminal, plugs and sockets.
1. Plated Copper Lugs: the lug is one of the various electrical connectors. It is an electro-
mechanical tool used to connect electrical ends, usually portable equipment and creates an
electrical circuit. Typically, electrical connectors consist of plugs with a male end and jacks
with a female ended. It requires a tool for fixing and removal or serve as a permanent
electrical joint between two wires or devices. An adapter can be used to bring together
different connectors effectively.
2. Blade connector: a blade connector is a type of single wire connection using a flat
conductive blade which is inserting into a blade receptacle.
3. Ring and spade terminal: the connectors have ring and spade terminals which in charge to
make the electrical conduction between devices. This type is one of the simple connectors
since the electricians mechanically fix them by utilising a screw or bolt to remove or attach
the spade terminal.
Figure 24: Plastic Tubing. Source: Cable Tie Company.
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2.6.3. Battery cables with lugs
First, Battery cables are used to connect batteries to the
solar controller and the PV module. They are also used to
connect multiple batteries. The cables have flexible
stranded TUV-listed copper wire, and the suitable cable size
depends on the current flow intensity. The cable end sides
are equipping with lug barrels covered with heat-shrink
tubing.
2.6.4. Battery interconnects
The battery interconnections are marked in red heat-shrink tubing for positive and Blue heat-
shrink tubing on the black wire for negative. During connecting the batteries in series or
parallel, the technician should accurately recognise the +ve and -ve signs on the battery. In the
battery series connection, connect the -ve with the +ve of the two batteries, on the other hand,
the battery in parallel, connect the +ve with +ve and the -ve with -ve of the batteries.
2.6.5. PV arrays’ cables
Solar array cables connect the solar panels and to connect the
solar array to the solar controller. Usually, they are attached to
the modules which are also TUV listed. The cable connectors on
these are fully waterproof when connected, touch-protected and
designed for up to 1,000 VDC and 30 A and resistant to high
temperatures. Most of the output cables manufacturing with 10
AWG PV wire, and Amphenol H4 connectors, and can be used in
solar arrays up to 1,000 VDC.
2.6.6. Connectors
These output cables are also Amphenol H4 connectors and
compatible with the modules to connect strings with On-Grid
inverters or combination boxes. They have two terminals, one is a
male end, and the other is a female end. They can be used to long or short the cables on the
modules and used to connect to a rooftop junction box, For example, if the application needs
a 30’ male and a 20’ female, order a 50’ cable made with black 10 AWG 1,000 VDC-rated PV-
Wire cable.
Figure 25: Battery Cables. Source: Sunmaster catalogue.
Figure 26: panels interconnection. Source: Sunmaster technical data
sheet.
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• Amphenol Helios H4 connectors: the 1,000 VDC-
rated Amphenol Helios H4 connector includes the pins
which enabling connecting the cables custom cables
at the job site. A proper crimping tool and wrench set
are required to assemble the connector. These
connectors are for use with 10 AWG PV wire.
• MC4-Solarline 2 branch connectors: these
waterproof Y-connectors make it possible to parallel
wire PV modules with multi-contact output cables.
Branch connectors are rating for the maximum
current of 30 A and the maximum voltage of 600 VDC.
2.7. Smart management control systems
The transition from the traditional public lighting to SSL is highly efficient with the adoption of
the smart management control system. Thanks to the high flexibility ensured by the light-
emitting technology can be exploited to reach higher performances, considering efficacy,
energy efficiency and lower O&M costs. All the manufacturers of the SSL systems enter the
market with MCS as a leading product regarding the demand increasing.
Since each manufacturer is looking to having a competitive advantage by using his technology,
the SSL market has different models of MCS. The main LED’s manufacturers started to develop
hardware and software aimed at controlling the illumination system together. The main aim of
a lighting control system is to provide light when and where it is needed to increase energy
efficiency. The MCS allows communication between the various input and output components
installed in the overall lighting system and one or more central computing systems that with
specific algorithms or with manual control regulate the lighting output of the various lamps.
MCS is the so-called adaptive lighting control, where the light is regulating according to the
different data collected by the sensors. The communication infrastructure could be Wi-Fi or
wired, but with the no-cables technology is considered as the real opportunity.
Further, the MCS is more developed in the private sector where investments on energy
efficiency measures and innovative systems have a higher priority than in the public
administration. In the industrial, residential and commercial buildings these systems, indeed,
have already a high diffusion. The spread of the MCS is related to the availability of financial
resources that, in the case of private entities, could be higher.
2.7.1. The approaches and devices of the MCS
• An automated algorithm: it regulates the voltage and the lighting output of the lamps within
a range. In this case, usually, the lighting is scheduled and programmed according to the
different time intervals of the day. For example, during the high traffic, the illumination
output is 100%, then the dimming mode reduces the lighting output until reach 80% within
the moderate traffic and 60% or less during the low traffic. The importance of this type is
the higher reduction in energy consumption without investment.
Figure 27: Connector’s Male & Female terminals. Source: Sunmaster technical data sheet.
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• Point to point control system: it is the most innovative approach that allows to monitor and
dim each lamp individually or in clusters. In this case, it is possible to control in real time the
lighting output of each lamp in the solar lighting system, the state, failures, the energy
consumption and scheduling the intervention and the maintenance with higher precision
and lower costs.
The MCS is under development in the R&D departments of the hardware manufacturers and
the software developers. For this reason, different players in the markets of lighting and IT
platforms are starting a partnership to develop a dominant design.
This collaboration improved the management control systems by the insertion of IoT
technologies. The functionality of these systems is to optimise the light output taking the
consideration of all the empirical data collected by fixed sensors in the lighting system.
The most common sensors are:
• Photocells sensor: is an electronic device positioned on the top of the luminaire to detect
the changing light level. It uses to manage the light output of the lighting systems.
Automatically, the light turns on when it gets dark, or they detect motion. The photocells
sensor saves energy by turning themselves off when extra light is unnecessary.
• Motion sensor: this device reacts to physical movement; it detects the movement in the
lighting location by the infrared or microwaves and reflects as signals to activate the light.
Also, it is used as energy-saving technology in commercial buildings, turning off lights in
empty offices. Many of these products have adjustable for use in several applications of
solar street lighting systems such as driveways or walking paths.
• Speed and direction sensor: it works for a more comprehensive detection area to classify
the movement following its speed and its direction. This classification provides the right
response according to predefined lighting scenarios.
The central management server is responsible for data collection and analysis. With software,
it creates the central control interface where it is possible to monitor the state of the system
and apply for the energy-saving strategies and programs. This interface also allows controlling
in real time the lighting system in case of emergency. The software is the real PoD of the
companies. It analyses all the data coming from the sensors trying to interpret them and
determine the necessary level of light. Manufacturers pointed out as the core component of
the overall system requires informatics knowledge and capabilities that traditionally was
absent or low in LED and lighting companies; this is the reason why, especially for smaller
companies, the IT companies became a valuable resource and the established partnership
could represent the real source of competitive advantage.
Once analysed and elaborated the data, the software communicates to the gateways the level
of lighting desired for the different nodes. With the actual technology, each gateway usually
can manage between 200 and 300 nodes simultaneously, which designed for reliable
operation, even in the hard weather conditions.
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2.7.2. The advantages of the MCS
• Cost reduction: the adoption of a suitable control system, it can save energy up to 50% by
decreasing the maintenance and the operating expenses in addition to reducing the carbon
dioxide emissions.
• Easiness to use: ease of access and be well-informed on the SSL current state via an internet
connection, by computer, mobile or tablet.
The MCS consists of the following hardware devices and software:
1. Control centre: this is the monitoring platform of the control system. It consists of the PC,
server, SSL control software, Web server, and other devices. The control centre functionality
is to receive data from the GPRS/CDMA module of the data centre. Therefore, it facilitates
to check the working conditions, monitoring the lights, and control them in real time.
2. Gateway: the component collects information from a unit and transmits it to another. It
collects the terminal controller’s information gathered from the solar lights. Here, the
Zigbee signal is translated to GPRS/Ethernet signal, then forwarded to the control centre.
3. Terminal controller: the device works on managing, charging, and discharging solar system
batteries. The information following is from the solar panel, battery and the LED fixtures.
Moreover, it controls the lights’ dimming and switching on and off.
2.7.3. Sunmaster MCS technologies
• Gateway CC08Z with the following functions:
- Turning on/off, dimming, and querying the terminal controller.
- Adjusting the lighting schemes automatically according to pre-setting.
- Storing the collected data and the device execution history.
- Communicating uplinks (i.e. GPRS/CDMA/Ethernet).
- Communicating downlinks (i.e. Zigbee/RS485).
- Remote upgrading.
- Encrypting data during communication.
- Alarming the control centre.
• Controller RTU12W with the following functionality:
- Switching on/off, dimming and querying the terminal controllers.
- Data collection from the solar panel, battery, light status, current and voltage of each
lamp.
- Uplink communication (i.e. Zigbee).
- Downlink communication (i.e. RS485).
- Remote upgrading functions.
- Data encryption during communication.
- Alarming the gateway.
In addition to the remote monitoring system, there is a possibility of adding security cameras
powered by the same solar panel as an integrated system, it gives many advantages with low
cost and has the following features:
1. 3G/4G transmission module included thus, no cables required for connection and ease of
the installation.
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2. Remote camera power on/off via SMS, that gives the possibility to take/send photos via
SMS.
3. Eco-Friendly since, the camera is powered by solar/wind power, fit in with the local
landscape.
4. Affordable according to the durable and reliable lighting structure reduces maintenance
costs.
5. Safe corresponding to the system ensuring the operation in case of emergency.
2.8. Technologies of the Solar Power System
Most of the adopted technologies in the SPS are mainly the same as the SSL (e.g. the solar
panels, batteries, controllers, and cables). The difference is the existence of the inverter in SPS,
and obviously, the LED fixture and the pole are excluding. Finally, the design and the dimensions
of the solar arrays mounting structure customising according to the installation area in the
application. The following topic to clarify the inverters and types of SPS.
2.8.1. Inverters
The inverter is one of the major electrical components of the SPS, either off-grid or on-grid. It
is used to convert the direct current (DC) from the energy storage system or the PV arrays into
alternating current (AC).
The inverter types for the SPS applications
The inverter specification should be chosen accurately because the inverter type affects the
overall performance of the PV system. Any faults with an inverter are challenging to be
detected unless the inverter shuts down. Solar inverters are classifying into three broad types
based on the types of the SPS such as Off-Grid, On-Grid or Hybrid systems.
Off-Grid inverters
This type is using as a central electrical device in the stand-alone SPS. The specification of the
off-grid inverter fits neither the on-grid systems nor the hybrid system. The DC flows to the
inverter from the batteries charges by the PV arrays converting into AC flows to power the
electric devices.
Moreover, it works as a power tracker to monitor the maximum power of the solar panel and
energise high-quality power with regulated voltage and frequency to the loads. The inverter is
featured with energy storage and staggering power consumption as well. This type is sufficient
for medium-sized or large-scale residential, commercial and industrial PV applications which
DC Power In AC Power Out
Figure 28: the electrical current conversion from DC to AC. Source: Sunmaster technical data sheet.
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are off the grid, such as a village, farm, factory, and office buildings.
Technical features of the stand-alone solar power systems:
• High-speed DSP digital control.
• Multi-string PV connected.
• Multiple remote control for startup and shutdown.
• Using multicore control technology and auto MPP trackers, auto-start AC rectifier enables
PV and AC source to supply power to the loads at the same time in the event of insufficient
PV, which reduces battery discharge times and extend the battery life.
• Full-bridge inverter control technology, providing secure power supply in the event of three
phases 100% unbalanced loads.
• Intelligent staggering power consumption function.
• Intelligent AC and PV complementation power supply function to extend the battery life.
• Inbuilt AC rectifier and MPPT control modules, configured battery parameters by the
operating interface, self-regulation for charging voltage and current and easy maintenance
and power expansion.
On-Grid inverters
This type is specifically designed to be homogeneous with the tie-grid solar power systems with
a utility-supplied sine wave. Briefly, the sine wave is the electricity waveform for the AC power
with the following advantages:
- Generating less electrical noise during the operating.
- Equipment and appliances last longer, run with average operating temperature and
more efficiently.
For safety reasons, Grid-tie inverters automatically shut down when the loss of utility supply.
There is no battery back-up as in the Off-Grid. Grid-tie inverters convert the DC power from
the solar energy system into AC power and convert the voltage to the same as the grid; this
allows to connect SPS into the grid.
Technical features of the Tie-Grid inverters:
• Grid-tie inverters work in conjunction with the grid, to be able to export electricity to it. The
AC pure sine waveform generated by the inverter has to align with the waveform from the
grid.
• There is an additional safety feature with grid-tie inverters to cut off power from the solar
array if the grid shuts down.
• Grid-tie inverters are connected directly to the solar panels. In an in-series system, this
means the input voltage from the panels can fluctuate wildly, often jumping or dropping by
several hundred volts in an instant. Off-Grid inverters cannot cope with such massive
voltage jumps.
• In the GCC countries, the grid-tie inverters must fit for use with the grid according to
standard specifications for the input voltage, power rating, power tracking and the number
of strings the inverter can support diagnostics and reporting information.
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Hybrid inverter
The based interactive inverters manage photovoltaic array output power production, battery
back-up, and the utility grid. All these stages are connecting to the hybrid inverter.
The hybrid inverter has an Emergency Power Supply that offers back-up power if the utility
power fails. In this case, the power is come out from the battery back-up to the maximum
capacity of the inverter installed. The designer should consider a sufficient independent battery
back-up without using the utility power. The priority of the hybrid inverter is to use solar
power; if there is over consumption from solar power, the inverter compensates the imbalance
from the utility power. If solar power exceeds the average consumption, the excess power is
storing in the battery back-up. If the batteries are full of charge, the excess power injects into
the grid; therefore, Solar Hybrid Inverters offer great value for production and consumption
security.
2.8.2. Basic electrical specifications of the On-Grid power inverter
Input voltage
The input voltage is the potential difference between a negatively charged object and a
positively charged one, with Volt as a unit measure of the potential difference. It represents
the work done per unit charge to move electrons between the positive and negative terminals.
If a potential difference exists, then energy can be extracted.
Choosing the suitable inverter for the SPS is based on a broad voltage range, from this voltage
range, the designer can identify how many solar panels the inverter can cope with either the
connection is in series or parallel and increase the design flexibility considering the future
expansion of the system. The On-Grid inverters are manufactured to withstand the variability
of input voltages and the most common voltage range in the residential sector is 50v up to 500v
per string. Nowadays, thanks to the development of inverter technology, one inverter can be
connected with two or more strings. These types of inverters are more expensive than the
traditional one.
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There is a difference between the rated nominal voltage and the maximum voltage that the
solar panel generates. As listed in the table, the higher the nominal voltage from the solar array,
the greater the voltage fluctuation. The voltage from a single 12v solar panel can raise from 12
volts within the deficient productive day of the solar irradiation up to 20v in an intensely sunny
day a dup to 26v in an open circuit.
Practically, the role of the inverter in the SPS is to ensure that the solar panel works safely not
only with the nominal voltage array but also with the generation of the peak voltage and the
maximum open circuit voltage. If power generation exceeds the peak voltage of the inverter,
the inverter shuts down automatically to avoid the damage.
The same functionality at the minimum input voltage, if the total voltage of the system drops
below the minimum input voltage, the inverter switches off automatically. In these cases, the
solar panels still generate energy and considered as electricity loss. A low minimum input
voltage means more power generation at the start and end of the day to ensure higher power
generation in the cloudy days or the winter season.
Power rating
There are two power ratings for the On-grid inverter:
- Input power rating: They are the minimum and maximum amount of power the inverter
can accept from the solar array.
- Output power rating: They are the maximum amount of power and current the inverter
can generate as an AC output.
Number of 12v
PV
Nominal PV
voltage
Low voltage on dull
day
Peak voltage
in intense
sunlight
Max. open-
circuit voltage
1 12v 12v 20v 26v
2 24v 24v 40v 52v
4 48v 48v 80v 104v
6 72v 72v 120v 156v
8 96v 96v 160v 208v
10 120v 120v 200v 260v
15 180v 180v 300v 390v
20 240v 240v 400v 520v
25 300v 300v 500v 650v
30 360v 360v 600v 780v
35 420v 420v 700v 910v
40 480v 480v 800v 1,040v
Table 7: the relation between the number of solar arrays and the nominal and max. voltage.
Source: solar electricity handbook 2017.
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Input power rating
The input power rating indicates the minimum and maximum wattage range with which the
inverter can interact. There are three main parameters to be considered for choosing the most
efficient inverter:
• A nominal power rating in watts: it is the maximum amount of power the inverter can
convert from DC input to AC output. In case, the inverter receives overpower from the solar
panel, it is going into heat, and the inverter automatically switched off to protect from
overheating damage.
• A minimum and maximum power range: this parameter shows minimum power input to
the inverter to start the conversion from the DC input to AC output. On the other hand,
ensure the maximum power input to the inverter without any damage. Therefore, the wider
the input power rating, the more the efficient the inverter.
• A start-up power rating: is a minimum power required for starting the operation of the
power inverter. Thus, below this minimum amount of power, the inverter does not start up.
Output power rating
The output power rating is the maximum continuous AC power that the inverter can generate.
The output power information signals the voltage, the nominal power output in watts, the
maximum output current in amps, the maximum efficiency rating of the inverter and the
alternating current frequency.
Power tracking
The power inverter has a built-in MPPT controller. Currently, the MPPT controller is the norm;
it is active for the SPS to monitor the input and the output power rating of the inverter.
However, there are a few older designs of inverter still on the market, often sold at competitive
prices online. No matter how cheap these inverters are, the performance loss rarely makes
them a worthwhile investment since the inverter is the brain of the SPS.
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2.8.3. Diagnostics and reporting information
The status of the SPS performance can be remotely monitored as the same in the SSL
applications thanks to the development of the IoT.
The highly advanced technologies of the inverters now have a built-in internet connection,
allowing them to connect to a wireless network and signalling any detected fault. That means
the end user can receive the updates via e-mail, via a website, or even send notifications to the
mobile phone application. The diagnostics and reporting systems usually have the same
software design as in the following image that is ensuring the SPS has one central information
platform.
The diagnostics identify the faults of the SPS, such as the following:
- Insufficient or excess power from the solar array Grid.
- Connection status.
- Grid voltage or frequency.
- Overheating.
Most solar inverters provide much more information, signalling the voltage and current from
the solar array and the generated amount of AC power at that moment. They are also able to
show the amount of energy generated by the system, both for that day and since the day one
the system installed.
Figure 29: screenshot for a platform of the power tracking. Source: solar electricity handbook.
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2.8.4. The types of solar power systems
There are several types of the SPS differ according to the solar system configuration such as
Off-Grid system, On-Grid system, Hybrid system or Fallback system. Each type is preferable in
a specific sector such as the residential, the commercial and the industrial sector.
Off-grid system
The stand-alone system is the most diffused PV technology in the solar market. It was the
starting point for developing other types. The users prefer this type for installation in remote
areas because of no need to expand the electricity infrastructure to power the utilities in the
residential applications. The Off-grid system usually adopted to generate power less than 1Kw
and the functionality of the system is basically, generating the electricity from the sun during
the daylight and store it in the battery bank, then the electricity consumption starts after
convert the DC flow into AC through the inverter to be familiar with the electricity type of the
appliances.
From a business strategy perspective as a startup, Egytalia should enter the market by
introducing the off-grid systems as a first step because it is the simplest type among the SPS.
Figure 30: Off-Grid system components and connections. Source: Indiamart website.
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On-Grid system
Grid-tie comes to the SPS market thanks to the potential profitability from the feed-in tariffs
regulations in Europe and the USA; then the technology moved to the Australian energy
market after public institution supporting the application with incentives.
Currently, the demand for this type is increasing in Egypt and the GCC countries due to the
availability to sell the electricity to the government that generates profit. In the grid -tie
system, the homes or the companies run on solar power obtained during the daylight and
stored in the battery bank or powered directly from the local grid in the urgent case or
during the maintenance period of the SPS. Any surplus energy is injecting in the national
municipal grid or selling to the nearby company.
The stand-alone system is the most diffused PV technology in the solar market. It was the
starting point for developing other types. The users prefer this type for installation in
remote areas because of no need to expand the electricity infrastructure to power the
utilities in the residential applications. The Off-grid system usually adopted to generate
power less than 1Kw and the functionality of the system is basically, generating the
electricity from the sun during the daylight and store it in the battery bank, then the
electricity consumption starts after convert the DC flow into AC through the inverter to be
familiar with the electricity type of the appliances.
Remark: from a business strategy perspective as a startup, Sustainergy should enter the
market by introducing the off-grid systems as a first step because it is the simplest type
among the SPS.
Figure 31: On-Grid system components and connections. Source: Indiamart website.
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Hybrid System (grid-tie with power backup)
The hybrid system is a grid-tie with a battery -back-up. Even has a commercial name in the PV
market as an interactive grid system. The concept of this type is that the user can benefit from
the power output for his usage and inject the surplus in the national grid for tariffs in return.
Unlike the standard grid-tie, however, the battery bank is considered as a contingency for
power cuts.
Typically, the designer considers setting up power cut protection circuits attached to the
system to maintain the power supply for the principal utilities such as lighting and
refrigeration without wasting power for the other appliances in the urgent cases. The
electricity utilities are selected in the protection circuits according to the end-user priorities.
The hybrid system cost is much higher than the standard one due to the battery back-up and
the controllers, having power back-up adds 35–50% of additional costs over a standard grid-
tie system if using lithium batteries, or between 20–25% of additional costs if using more
conventional lead-acid batteries.
Figure 32: Hybrid system components and connections. Source: Indiamart website.
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2.9. The types of solar streetlight
There are two types of solar street lighting, the standard one is called the split system, and the
integrated one is called All-in-one as commercial names on the SSL market. The similarity of
the two types is that they have the same electrical and mechanical components such as (LED,
solar panels, batteries, poles, cables).
The difference is the design of the systems. The All-in-one has a better integrated architectural
design. It consists of a board that includes all the solar street lighting components, as shown in
the image.
Figure 33: All in one board. Source: Sunmaster technical data sheet.
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The standard solar streetlight has a different design from the all in one. As shown in the image,
the components are positioning separately, especially the battery can be fixed underground,
or it places on the top of the pole.
The advantages of All-in-one are:
- Easiness installation.
- Beautiful architecture design for city life streets.
- The plug and play option that facilitates maintenance.
- Lightweight design.
- Rust, Dust, and Waterproof.
The disadvantage of the All-in-one is the inflexibility of the system customization related to the
variability of the geographical locations because the inclination of the solar panels cannot be
Figure 34: split system components. Source: Sunmaster catalogue.
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optimized to exploit the highest amount of solar irradiation. In many cases, the module
inclination goes against the optimal lighting distribution; therefore, the designer should trade
off the lighting efficiency and the solar panel efficiency.
The advantage of the standard split solar streetlight is the flexibility of the system
customization to meet any project specifications such as increasing the capacity of the solar
panel and the battery according to the project requirements.
It has the disadvantage of taking a long time in the installation because of the assembly of the
components. Moreover, if the battery is positioning underground, there is electricity lose due
to the long-distance cabling between the solar panels and the battery. Most demand of the
Split systems is from the highways illumination and the outdoor lighting facilities in remote
areas. On the other hands, the significant demand for the All-in-one is from the parking,
residential, commercial areas.
3. Chapter three (market analysis)
3.1. PEST analysis
3.1.1. The advantages of PEST analysis
1. Enabling the company to identify the potential opportunities to exploit and detect the
threats to avoid in the future.
2. Provide alternatives to the decision makers to improve the company against the significant
change in the circumstances.
3. Protect the decision makers from operating in unstable markets or make them avoid
participating in unprofitable projects regarding their company’s capabilities and reduce the
gap of uncertainty about the success of reaching the company objectives.
4. Make the policymakers more aware of new market or region and help them to create an
accurate roadmap to reach the objectives.
3.1.2. Factors of PEST analysis
The PEST analysis is practically carried out by identifying the four points frameworks in order
to assess the following range of factors:
• Political: Political stability, government effectiveness, corruption and regulations.
• Economic: GDP, trends, interest rates, inflation rate, unemployment level, price controls,
exchange rates.
• Sociocultural: demographic changes, education, birth rate, Labor power.
• Technological: patent protection, industry spending on R&D, productivity improvements
through automation, technological trends affecting the industry.
Remark: Sometimes, the tool analysis is called (PESTE) by adding the Ecological factor, which is
most common in the marketplaces around the world. It is related to the environmental
responsibility and eco-sustainability; this factor based on the environmental protection laws,
decommissioning costs and environmental concerns of customers. Most of them are derivate
from convections such as Paris agreement, which is recognized by the Egyptian and GCC
governments and stated in the MoU between them and the European Commission.
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3.1.3. Practical PEST analysis on the Egyptian market
Once finishing the identification of each factor, the decision makers should brainstorm the
opportunities and threats that each area presents, then, identify actions that can be taken to
exploit any opportunity and to manage or eliminate threats.
The practical way to carry out this analysis is the identification of each possible factor (F), after
that detecting their current values (V1) then, starting the prediction of the changes that might
happen until 2025 in order to foresee if these values increase or decrease and determine the
approximate future value (V2). The final evaluation is rating the impact (I) of the future values
(V2) in the upcoming five years from -5 to +5. Last but not least, concluding the opportunities
and threats; consequently, the company can identify the properly added value reactions to
translate the opportunities into profit and avoid the threats.
The prediction is based on the exploitation of the regulation’s analysis in chapter 1 and
continually gathering data about the political, economic, socio-culture and technological
potential changes in each country through the direct interaction with the market players,
attending economic conferences and building stable relationships with the responsible
ministries.
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Factors
(F)
Value
(V1)
Prediction
(P)
Value
(V2)
Impact
(I)
Political
Political stability
range (-2.5 to 2.5) -1.42 Increase 1 +2
Political risk
range (1 to7) 6 Decrease 3 +3
Government effectiveness
range (-2.5 to 2.5) -0.62 Increase 1 +2
Regulatory quality
range (-2.5 to 2.5)
-0.86 Increase 1.5 +3
Rule of law
range (-2.5 to 2.5) -0.53 Increase -0.7 -3
Control of corruption
range (-2.5 to 2.5) -0.54 Increase 0 -4
Economic
Economic growth (%) by 2023 5.46% Increase 5.98% +4
Inflation rate (%) 12.49% Decrease 7.19% +4
Interest rate (%)
14.1% Decrease 11% +3
Exchange rate
(EGP regarding 1 USD) 17.25 Decrease 15 EGP +3
Unemployment rate (%) 9.87% Decrease 6.44% +3
Tax rate (%) 23% Increase 30% -1
Labor Force
(Millions) 31.87 Increase 35.5 +2
Socio-
Cultural
Population size
(Millions)
100 Increase 112 +2
Human development
range (0 to 1) 0.696 Increase 0.8 +3
Globalization index
range (0-100) 63.08 Increase 80 +4
Innovation Index
range (0-100)
27.2 Increase 35 +4
Education spending from GDP
(%) 3.76% Increase 7% +4
Health spending per capita
(USD/Person) 130.99 Increase - +3
Tech. SSL & SPS components Importing Local
manufacturing
Takes at least 5 years to compete
the foreign products +5
Table 8: practical analysis of PEST model factors.
Source: World Bank, market research reports, the global economy websites.
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3.1.4. Opportunities and threats of the political factors
Political factors are the base of any marketplace. They are integral and rely on each other one
by one. There is a proportional relation between political stability and other factors. For that
reason, the more the country reach political stability, the higher the economic growth and
society satisfaction. Egypt suffered from political instability for almost eight years after the
Arabian Spring revolutions. Since 2014, Egypt has started a comeback after a presidential
election led to stability for four years and the election has been placed again in 2018 to extend
the stability period until 2025; as a result, the political risk is gradually decreasing over the time.
Accordingly, a composition of the cabinet settled with the primary objective of increasing
economic growth and solve the lack of energy resources. The government engaged with the
world bank and the international monetary fund for a bunch of loans on the long run to start
the economic reform and finance the national projects in the energy Industry under their
supervision. The Egyptian government’s objectives must be aligned with the international
monetary fund instructions while reforming the energy sector by adopting renewable energy
technologies to reduce carbon emissions.
The health of the economic system will recover, and the GDP will increase by accessing to stable
political circumstances that motivates the government to invest more in improving the social
factors such as the education, innovation and human development regarding that, the country
gets well-educated workforces with high competitive skills comparing with that in the
developed countries. Furthermore, increasing the social awareness about climate change and
the necessity to work toward the energy efficiency that raises the promotion of the PV
technologies. The economic growth creates new business opportunities with a positive impact
on the unemployment rate, inflation rate and the exchange rate.
The last factor is the technology, the technological trend is to adopt the cost-efficient PV
products that do not exist in the local industry, but there is a willingness to encourage investor
to localize the PV products that will take at least five years to build highly advanced production
facilities and compete with the international one.
3.1.5. Opportunities from PEST analysis
Sustainergy should exploit the following opportunities:
1. Increase the demand on the PV technologies thanks to the flow of the foreign investment
that will finance the large-scale PV projects and create chances for Sustainergy.
2. The new set of regulatory frameworks for the PV sector to incentivize the EPC and flourish
the PV market.
3. The modified business taxation policies that compensate the taxes payers by improving
services in return to support their businesses activities such as introducing facilities to own
lands and issuing licenses that will reduce the bureaucracy and motivate the companies to
work with passion.
4. Control the corruption by activating the rule of law to increase the reliability and
transparency that all impact the health of the economic system. As a result, Sustainergy can
implement the strategic plan and use the competitive advantages against amateur and
professional player on the market.
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5. The low labour cost, whereas the installation of the SSL is required low skilled electrical
technicians.
6. There are no local manufacturers for the components of SSL & SPS; hence, the demand will
be covered by exporting. The government issued new legislation to optimize export trading;
additionally, they revised the customs clearance cost.
3.1.6. Threats from the PEST analysis
Sustainergy should avoid the following threat
Low control of corruption and the deactivation of the regulations by the bureaucracy are the
worst political factors that impact negatively on Sustainergy business model because the
absence of control leads to unfair competition and loss of opportunities. These defects waste
the efforts of Sustainergy and the other systematic players and become an advantage for the
weak competitors in the market.
3.1.7. Actions toward exploiting the opportunities and avoiding the threats
Sustainergy should exert great efforts at the beginning by building business relations and
getting approval on Sunmaster products from the ministry of renewable energy. That will
facilitate winning tenders and generate a profit on the short run; therefore, the company
proliferates resulting an excellent reputation in the Egyptian SSL market that enables the
company to upgrade the business model shortly to participate in other PV applications focusing
on projects with high installation capacity. On the other side, Sustainergy should find
alternatives, considering the worst-case scenarios. The best solution to overcome the threat is
diversifying the company portfolio by operating in Egypt and the GCC countries in parallel; the
company can operate beyond the domestic market thanks to the alliances with Italwarmi and
Sunmaster. In case, there is an occurrence of adverse changes in the Egyptian market
circumstances, Sustainergy can sustain by operating in other marketplaces.
3.2. SWOT analysis
3.2.1. Introduction of SWOT analysis
The SWOT analysis usually follows PEST analysis, and they have factors in common. The
difference is that the PEST analysis investigates the significant picture factors that might
influence a strategic plan, market circumstances, or a potential new business. SWOT analysis
explores the determinants factors of the business relations, product line or the product itself.
These tools complement one another and are using together.
SWOT analysis focuses on Strength, Weakness, Opportunities and Threats. The identification
of the strengths and the weaknesses correlated to the organization capabilities to compete in
a specific environment, the other two determinants, address the circumstances in which the
company operate. All the factors are linked together in the sense that it helps the decision
makers in exploiting the strengths to convert the opportunities into real benefits and identify
the weaknesses to progress them and expect what precisely the future threats are. This SWOT
application included not only the strengths and weaknesses of Sustainergy, but it also indicated
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the weaknesses and strengths of the PV market in Egypt, which impact the opportunities and
challenges that the company may face.
Regarding the market research in chapter one, the conclusion is the following SWOT analysis
in Egypt.
3.2.2. Strengths of PV market
1. The massive amount of solar irradiation thanks to the geographical location of Egypt that
supports the idea of practically adopting the PV technologies in addition to the necessity to
supply the rural areas with the electricity.
2. The PV systems are flexible to be installed in the remote area with no need for the
connection with the national grid or invest in the electricity infrastructure such as cable
expansion and civil work.
3. Low maintenance & operating cost compared with conventional energy resources.
4. Egyptian PV regulatory framework such as the FIT stimulates the public and the private
sector to invest in the PV projects.
5. There is no local PV industry; the project procurement relies on importing the PV products.
3.2.3. Strengths of Sustainergy
1. Cost leadership strategy that gives Sustainergy a competitive advantage against the
competitors.
2. Exclusive agreements with Sunmaster and Italwarmi to promote SSL products.
3. Agency agreement with Amerisolar and Canadian solar that increase Sustainergy bargaining
power as a buyer when participating in SPS projects.
4. Adoption of the vertical integration, Sustainergy responsible for all the stages of the SSL &
SPS projects (site inspection, design, procurements, installation, commissioning, operating
and maintenance).
5. Strategic alliances with Hammer Egypt one of the roles played in the PV.
3.2.4. The weakness of the PV market
1. Lack of awareness about the environmental issues which is one of the energy efficiency
barriers.
2. Information asymmetries and low accessibility to the data related to the benchmarking.
3. FIT law disactivated since October 2017, leading to a decrease in the investment.
4. Lack of logistics supports to implement wide-scale projects in remote areas.
5. High initial investment cost.
3.2.5. The weakness of Sustainergy
1. The new entrant in the PV market; thus, Sustainergy should exert many efforts until building
projects reference and increase the reputation.
2. The business model based on the agreement with Sunmaster; therefore, in case Sunmaster
faces loss or failure that will negatively impact on Sustainergy.
3. Sustainergy has weak technical capabilities to implement SPS projects.
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3.2.6. Opportunities for Sustainergy
1. Increasing the demand for the PV projects’ consultancy.
2. Increasing the demand for PV products.
3. The demand increasing creates a high competition; however, the exploitation of this
demand increases the growth of sales.
3.2.7. Threats for Sustainergy
1. Any disagreement with Sunmaster will affect negatively on Sustainergy business model.
3.2.8. Recommendations
1. Sustainergy and Italwarmi should search for new alternatives considering the worst-case
scenario of Sunmaster failure or disagreement.
2. Sustainergy should strengthen the technical capabilities of the SPS design and keep
improving the SSL sector.
3. Put all the efforts to start big and undertake many SSL projects and reinvest in the business
development to overcome the weaknesses and overcome the challenges.
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3.2.9. Conclusion of the SWOT analysis
POSITIVE FACTORS NEGATIVE FACTORS
Strengths Weaknesses
Company
• Cost leadership strategy.
• Strategic Alliances.
• Vertical Integration.
• Agency & Exclusivity agreements.
Company
• New entrant in the Egyptian PV market.
• Independency on Sunmaster.
• Low technical knowledge about SPS.
Market
• Huge amount of solar irradiation.
• Flexibility of the PV systems.
• Low M & O costs.
• PV regulatory framework.
• No Local industry.
Market
• Leak of awareness about EE.
• Information asymmetries.
• FIT deactivation.
• Lack of logistics support to remote
areas.
• High initial investment cost.
Opportunities Threats
• Demand increase on the PV
consultancy.
• Demand increase on the PV
products.
• High market potentiality.
• Any disagreement with Sunmaster will
affect negatively on Sustainergy
business model.
Figure 35: conclusion of Sustainergy SWOT analysis.
SWOT
EXTE
RN
AL
FAC
TOR
S IN
TER
NA
L FA
CTO
RS
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4. Chapter Four (Competitive advantages strategies)
4.1. The engines of growth
4.1.1. Exploitation of the engines of growth
Italwarmi & Sustainergy can exploit the engines of growth as the following:
1. Memorable experiences: contacting all the customers registered in the CRM system and
discuss with them the feedback correlated to their experience with Sunmaster products and
service. This resource makes the company better understand its customers’ needs.
2. Analytics: gathering all the feedback information in reports and starting the analytical stage,
in which, takes the consideration of every single detail about the products design, prices and
quality and the customer satisfaction about the technical consultancy and the customer
services. The result of the analytical process enables the decision makers to reduce the
uncertainty and make them confidently take the right decisions that add value to the
company.
After applying the previous steps, the following remarks have been concluded:
Remark 1: the result was positive in some points such as the prices and the high quality of
the customer service. Most of the customers have indicated that the prices are reasonable
compared with many competitors, and by doing a benchmarking and periodically checking
on the leading competitors’ prices. Italwarmi has high skilled core competence, the company
hire dedicated employees in the customer service department who speak different
languages which is an advantage for the international business, but on the other hand, the
customers complain about the leak of their technical knowledge.
Remark 2: the customers’ feedback was cynical about the quality and the design of some
LED fixture modules. Based on the negative and positive feedback, it is the turn to exploit
the suitable alternatives from the engines of growth to enhance the weaknesses and sustain
the development of the positive points.
3. Product innovation: by starting with the solution for the design and low quality, the product
innovation is the best engine of growth to be used to serve the development of the design
and improve the quality. Recently, sunmaster was manufacturing a variety of LED fixtures,
and the modern Chinese industry is producing different qualities, low and high depending
on the customer budget which is very wrong management style that leads to adverse effects
on the company’s reputation and reliability. Thus, the solution is to focus only on the highly
demanded LED modules and kick out the low demanded one from the product range. After
that, the technical department works on increasing the quality of the concentric product’s
material for example, in the project case in Kuwait, Sunmaster offered the consultant die
casting aluminium material for the LED fixture instead on the traditional aluminium one.
Plus, HDG steel pole instead of the powder coating in order to withstand the weather
circumstances of the desert in Kuwait.
Additionally, dedicate a portion of the budget for designing a modern shape of the
integrated built-in solar lighting to fit the demand of the residential segment. Last but not
least, building a business relationship with a laboratory of a third-party to test the products
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and issue an accurate testing report to attach with the products’ technical data sheets, that
would increase the company reliability.
4. Unique hardware and software designs: the improvement of the documents’ structure is
one of the most effective actions that have a tremendous positive impact on customer
satisfaction. The restructuring and the modification of the technical data sheets templates,
price lists, catalogues, business profile and create a new version of the projects gallery as a
reference can increase the company reliability and attract the customer to contact
Sunmaster. On the other side, using great advanced software to create lighting calculations
such as the Dialux, makes the company introduce better and faster technical service.
Moreover, Sunmaster created software calculator to configure the SSL & SPS according to
the project specifications as described in the project cases.
5. Social Media: nowadays, the social media platforms especially Facebook and LinkedIn are
considered as appropriate communication channels to reach the customers and keep them
updated with all the latest news about the industry and the range of the products. Upgrading
the company’s online pages strengthens the branding and the company image.
6. Word of mouth: meeting the potential customers face to face eases to facilitate the
negotiation stage well and create customer loyalty to the company. Therefore, part of the
strategic plan is to engage with the customers in their countries to be more aware of their
business culture and participating on the ground in the project’s implementation phase
that’s also increase the company reliability.
7. Creation of growth hacking team: the engines of growth are variable, and new of them raise
by the time. Detecting the new engines of growth is relying on the company internal
competencies and the management team creativity. Thus, creating a hacking team gives the
company the accessibility and acquisition of new resources that sustain and enhance
company performance. Italwarmi has created a scouting team consists of four international
members (Indian, Colombian, African, Turkish) who are responsible for doing market
research, discovering new creative tools and studying the market in India and the Far East,
South America, Africa and Turkey.
4.2. Competitive advantage
Pros of the competitive advantage
Strategies serve to any organization or individual in a competitive environment. In any strategic
plans, the competitive advantage is used to be one of the most influential factors in any
company that makes an entity’s goods or services superior to all a customer’s other choices.
There are three main determinants should be considered in any business model to pursue a
competitive advantage.
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• The benefit: it is the value added to the customer makes him reach satisfaction by using the
company’s product or service which should be extremely reflected on the value proposition
section of the company business model to make it more competitive.
• Target market: is representing the targeted customers and their needs, that makes the
decision makers more precise in the key resources utilization and wisely identify the
company objectives and the key activities to reach them in a cost-efficient way.
• Competition: the first step toward winning a competition, the company should recognize
the competitors and define their weaknesses and strengths, that has happened in the
benchmarking with one of the most prominent players (SOL) in the SSL sector. The
benchmarking included the products range, the prices, the quality and the technical service
that the competitor introduces on the market.
Briefly, the successful business model shows the ability to articulate the introduced benefits to
be provided to the target market in a better way than the competitors, delivering this clear idea
to the customers is necessary to increase the company reliability. Traditionally, the company
can achieve a competitive advantage by implementing one of three porter’s generic strategies:
cost leadership strategy, differentiation strategy and focus strategy.
4.2.1. Cost leadership strategy for Italwarmi & Sustainergy
The most suitable competitive strategy fits with Sunmaster, Italwarmi and Sustainergy business
model is the cost leadership strategy that seeks competitive advantage in a low-cost position
achieved through aggressive cost reduction and high market share. The sources of the
competitive advantages are:
- Economies of scale
- Economies of learning.
- Process technology and process design.
- Product design.
- Input cost.
- Capacity utilization.
- Management organizational efficiency.
4.2.2. Cost leadership and Porter’s five forces
• The threat of new entrants: cost leadership strategy considering as an entry barrier that can
frighten off the new entrants due to their needs to enter on a large scale in order to have
cost competitive.
• Bargaining power of buyers: the cost reduction strategy can decrease buyer’s power by
driving prices far below competitors, causing them to exit in case of the participation in the
private projects or to lose and quit during the tender’s RFP evaluation but after that shifting
power with buyers back to the company.
• Bargaining power of suppliers: this competitive advantage strategy can mitigate suppliers’
power by:
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- Being able to absorb the suppliers’ cost increases due to low-cost production after
dominating the market and increase the growth of sales.
- In the case of the company reach a significant market share, they can make large
purchases, reducing the chances of suppliers using power.
• Substitutes: this step should be agreed between Sunmaster and Italwarmi Joint venture
because it concerns investments in order to create substitutes. Cost leadership strategy is
well positioning to:
- Buy patents developed by potential substitutes that already done when Sunmaster has
acquired the LED chip patent of Philips instead of Bridgelux to optimize the position after
the US-China war economy.
- Lower prices to keep value position.
• Existing competitors: can use a cost leadership strategy since competitors avoid price wars
with cost leaders, creating higher profits for the entire industry. The success of this
determinant has been approved practically by rewarding the project in Kuwait (Salem Air
Force Base) against GE, Phillips and Sol who have avoided the price war.
Remark: the positive result of cost leadership strategy is shown theoretically, in the
benchmarking case and practically, in winning the project in Kuwait against big lighting
manufacturers such as GE, Phillips and Sol.
4.3. Strategic Alliance concept
It is a collaborative agreement between two firms who have decided to share their resources a
sharing benefits project. The strategic alliance imposes on both parties’ lighter responsibilities
than in the joint venture agreement. In case two companies adopt the Strategic alliance
collaboration, each of them remains his management structure but gains mutually new
opportunity.
4.3.1. Advantages of the strategic alliance
A strategic alliance supports the companies to introduce better their value proposition by
compensating their weaknesses by sharing the internal resources and competencies that’s
make firms offer a more practical value, can snowball into a new market, or get superiority and
competitive advantage over an opponent. The collaboration allows the two businesses to work
toward a mutual objective goal that will raise a short-term or long-term benefit to both. The
benefits may be formal or informal between the two parties. Through the informal alliance, the
firms stop gaining benefits at the end of the partnered business period within the
responsibilities of each member are clearly defined.
The Purpose of Strategic Alliance
The aims of adopting a strategic alliance are achieving fast growth while entering a new market
and reaching potential accessibility to acquire new resources and knowledge that one of the
parties has not before.
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4.3.2. The Risks of Strategic Alliance
There is a potential risk correlated to the interest conflict between the two parties; this risk
likely happens in the informal strategic alliances more than the formal one. In the adoption of
a long-term strategic alliance, probably one of the parties becomes more dependent on the
other, which may cause additional friction as obtaining one side advantage. Therefore, it is
better to go through the formal agreement in which all the collaboration terms are well defined
and recognized by each party. Further, in case it is necessary that one party provides
proprietary information to the other, there must be trust between the two allies.
4.3.3. Applications of the strategic alliance theory in Italwarmi & Sustainergy BMs
Practically, the strategic alliances appeared three times in the business models, twice in the
new business model of Italwarmi and one time in Sustainergy business model.
• The first time, when Italwarmi created an informal strategic alliance with (KB development
SRL) as a technical consultant partner for the PV power plant and the installation stages of
the SPS in case the customers asked for technical supervision on the project’s installation
stage until the handover. The agreement has been issued before the business trip to Saudi
Arabia, the mutual benefit is to enter a new potential market for the two parties and It
generates a beneficial bargaining power for Italwarmi while discussing with the companies
and representatives from the government the opportunities to participate in the power
plant projects with a substantial installation capacities. On the other side, KB developments
will get new opportunities outside their national boundaries without taking a risk in the
sense that Italwarmi will charge all the business trips cost and takes the negotiation
responsibilities with the customer.
• The second strategic alliance is a formal agreement that has signed between Italwarmi as
an exclusive international representative of Sunmaster based on a joint venture agreement
and (Bait Al-Aseel) as a contractor company in Kuwait. The agreement states that Italwarmi
has to exclusively support Bait Al-Aseel commercially by supplying very competitive prices
with high-quality solar street lighting components and technically through building the
lighting design and the solar system configuration additionally, providing the installation
instructions for Salim air force base outdoor lighting facilities project.
• The third strategic alliance is a formal agreement between Sustainergy as a first party and
Hammer Egypt as a second party. The second party is an EPC company specialized in the PV
sector, particularly in the solar street lighting applications. Regarding this agreement,
Sustainergy, as a startup company in the Egyptian PV market, needs support through
collaborating with Hammer Egypt at the beginning to easily reward projects through tenders
or even participate in private projects. Hammer Egypt will gain a competitive price
advantage in the equipment procurement of the SSL & SPS from the bargaining power of
Sustainergy thanks to the integrated partnership with Italwarmi.
All the previous strategic alliances have been implemented practically and generated positive
results for all the parties. These agreements facilitate the success in all cases thanks to the
flexibility of the strategic alliances because they avoid all the hurdles that a joint venture would
include, and the parties do not need to merge capital thus there is no financial risk, and they
remain independent of one another.
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4.4. Benchmarking
4.4.1. Introduction of the Benchmarking
The concept behind the benchmarking is to compare two companies that have points of
similarities, and they should operate in the same industry and work in the same market
circumstances. Therefore, the opportunity to do the benchmarking raised within the
competition in the project of Salim Air Force base in Kuwait between Sunmaster, GE, Philips
and (Sol Inc) and all the data available about the companies to create a reliable benchmark.
There are three types of the benchmarking (Internal, strategic and competition).
Herein, the purpose of the benchmarking is a step forward to win the competition, the
company should recognize the competitors and define their weaknesses and strengths based
on the technical and commercial data.
Philips and GE are manufacturers of only LED fixtures, and some of them produce batteries and
controllers. Nevertheless, no company from the previous produces all the SSL components such
as poles, cables, batteries, battery boxes, controllers, cables and solar panels. Sunmaster is
adopting the vertical integration modern economic theory, they have the manufacturing
facilities for LED fixtures, Solar panels, Poles, Controllers, battery boxes and collaborate with
sister companies as a family business to supply batteries and cables. That gives Sunmaster a
competitive price advantage upon the big players in the lighting industry but make it impossible
to full benchmark with them.
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4.4.2. Comparison between GE and Sunmater
As shown in the (table 9) a comparison between GE and Sunmaster covers the price and the
technical parameters of the LED fixture product. The conclusion refers to the highly competitive
advantage for Sunmaster over GE from commercial and technical perspectives.
During this competition in Kuwait, Sunmaster faced one of the biggest brands that have
production facilities for LED fixture and solar panels. Sol Inc is a company that has a reputation
in the solar lighting industry with 20 years’ experience. They offer technical consultancy for the
designing and the installation stages as Sunmaster does. In the (table 10), the result of the
benchmarking between Sunmaster and Sol, the comparison is included the technical and
commercial aspects. In the technical perspective, Sunmaster has superiority on Sol for the main
proposed components, for instance, the LED fixture, Battery and solar panels, further the
lighting design and the system configuration are more reliable and efficient than Sol. Sol has
offered only 219 Pcs of single arms at a price five times higher than Sunmaster one which is
technically and economically insufficient.
Comparison Statement
GE Vs Sunmaster
No
Parameters
GE
SunMaster
Remarks: SunMaster are specialized
only in manufacturing of Solar
streetlights components such as
LED, PV, Pole, Controller and
battery box for more than 10 years’
experience.
1 Luminous Flux >8600lm > 11000lm 65W Lamp Test Report attached
Sunmaster lamp is higher in LED
efficiency, brighter with the lower
power consumption; Direct current
is much safety; and the color
temperature is flexible regarding the
project requirements.
2 LED efficiency >110lm/w >180lm/w
3 Color
Temperature 5000K 4000K
4 The electric
current AC DC
5 Power Factor >0.9 >0.98
6 Fixture material Aluminum Di-Casing Aluminum &
Anodized Aluminum
Attached in the catalogue
specifications.
7
Weight
10Kgs
6Kgs
Lighter material is better lower
mechanical stress on the pole in case
of the high wind.
8 LED chip brand Undefined USA Bridgelux Letter of certification by Bridgelux
attached.
9 Price 339USD 114USD
GE price is 3 times higher than the
price of Sunmaster, thanks to the
adoption of leadership strategy.
Table 9: benchmarking between GE Vs Sunmaster.
Source: Sunmaster technical data sheet, price lists, GE technical data sheet and prices.
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4.4.3. Comparison between Sol and Sunmaster
Parameters SOL Sunmaster Remark
1 LED Chip Brand CREE USA Bridgelux
Letter of certification by Bridgelux
attached. The lifespan of the Bridgelux
chip is longer than the Cree brand.
2 Luminous Flux 3,692 lm >11,000 lm 65w Lamp and the testing report
attached, Sunmaster’s lamps are
higher in LED efficiency, and produces
more lumens than Sol’s one with the
same electricity consumption.
3 LED efficiency 130 to 165 lm/w 170 to 210 lm/w
4 Color Temperature 3,000 K 4,000 K
5 The electric current Alternate current Direct current
6 Power factor Undefined >0.98
7 Fixture material Aluminum
Die Casing &
Anodized
Aluminum
Die Casting and Anodized strengthen
the Lamp fixture and make it
withstand with the high temperature
circumstances in the Kuwait. The Lamp
catalogue and specification attached.
8 8m HDG Pole Full Hot Dip
Galvanized
Full Hot Dip
Galvanized
Complied
9 Wind resistance
Based on speed
145Km/Hr
Based on speed
162Km/Hr
The wind resistance of Sunmaster pole
is better in sense that the project in
and open desert area with high wind
turbulence speed. Thus, Sunmaster’s
pole is safer.
10 panel Undefined 150 w poly
150w solar panel is enough for the
project requirement as explained in
the project case study
11 Battery Ni-Cd GEL Battery
Ni-CD cannot resist the high
temperature in Kuwait and each cell
has 1.2V so to get 12v for one battery,
it must include 10 cells connected in
series and the charging will be slow
because too many connections.
12 Battery position Underground On the top
The battery position on the top is
better because it requires the cables
between the solar panel, the battery
and the LED lamp to be shorter than
the storage position underground.
Thus, the is no electricity loss for the
top position.
13 Price (complete Set) 4,263USD Single
arms
722USD Single arms
979USD Double arms
Sunmaster prices is 5 times cheaper
than Sol prices which negatively
impacted on the project total budget.
Table 10: benchmarking SOL Vs Sunmaster. Sources: Sunmaster technical data sheet, price offer, Sol Inc technical datasheet and price offer.
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The conclusion from benchmarking Sunmaster with Sol and GE confirming that Sunmaster has
very potential business chances and highly competitive advantages and they can gain a
considerable reputation followed by a good position in the GCC market and get a significant
market share.
5. Chapter five (Italwarmi & Sustainergy Business Models)
The idea came out after one-year work experience as a freelancer with Italwarmi in the SSL &
SPS applications. Within this period, I have gained a proper technical & commercial knowledge
which motivated Italwarmi on behalf of Sunmaster to hire me as a business developer and
regional sales manager to work on the upgrading of Italwarmi business model for getting a 33%
sharing from Italwarmi’s net profit. The aim of the business model is the expansion of the
company activities in the Middle East and reaching significant sales growth. Italwarmi is an
international intermediary for Amerisolar and has a joint venture agreement with Sunmaster.
5.1. Business Model Canvas
It is a visual chart consisting of nine blocks that describing the company value proposition,
infrastructure, customers segmentation and the financial structure to help in increasing the
creativity and flexibility while improving the competitive structure of the business, managing
the multichannel marketing opportunities and help the management team to overcome the
decision making complexity.
Applications of BMC
1. Understanding and sharing the status-quo: facilitate to capture, understand, visualise,
communicate and share how Italwarmi and Sustainergy compete involving all the actors
such as debtholders, shareholders, and the stakeholders.
2. Analysis: analyse Italwarmi and Sustainergy business logic by observing, measuring the
company’s performance and show how they are linked together as partners.
3. Benchmarking: comparing the status quo of the two companies and the competitors.
4. Management: thanks to this methodology, managers can set the strategic plan easily in a
creative way and react to the external changes in a flexible way.
5. Prospect: it supports future development by reducing, market uncertainty and support
taking related decisions.
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5.2. Italwarmi Business Model
The business model represents how Italwarmi works, describing the value the firm offers to
one or more segments of customers, the structure of Italwarmi and its network of partners for
creating and delivering this value.
Figure 36: Italwarmi Business Model.
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Customer segment: there are several players in the global PV energy market such as EPC, ESCO,
Constructions, Lighting and contracting companies; therefore, Italwarmi addresses different
customer segments based on two main parameters (the business strength and the project size).
The business strength characteristics are the market share, turn over, reputation. On the other
side, the project size classifying on the required quantity for the project, moreover the
reputation of the End User, for example, the participation in projects related to Ministry of
defence, ARAMCO and Royal Commerce in Saudi Arabia.
Based on the previous map Herein the customers classification:
• High potential: since the focus activity of Sunmaster is the manufacturing of SSL. As a fact,
the lighting companies with an expert business profile are the high potential customers
besides, EPC and ESCO. The big companies concentrate on the big projects that lead to the
supply of a massive quantity of PV products.
• Intermediate potential: lighting companies with intermediate or low business profile and
participate in big size projects. In this situation, the best solution is to support the companies
technically, in case they have the willingness and motivation to participate. However, big
firms with small projects, collaboration with them is essential to build a profitable business
relationship for future projects.
• Low potential: the companies as mentioned above with a shallow business profile and
submit to small size projects in this matter, supporting them is good for the potentiality in
the future.
Value proposition: Italwarmi increases the profitability to Sunmaster as the leading partner,
further Amerisolar, Canadian Solar as a support regarding non-exclusive agency agreements
and adds value to the customers by offering the very competitive prices, technical support in
the power systems design, configuration, installation and facilitate the communication with the
logistics companies in China.
In particular, Italwarmi supports the key partners to reach the following:
• Increasing the growth of sales.
• Maximisation of the profitability.
• Enhancing the reputation by focusing on the big projects.
• Creating close business relationships with the customers.
Figure 37: Trade off the projects regarding project size & the business strength.
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Channels: Italwarmi could reach segmented customers through communication channels as
the following:
• Indirect communication: Emails, telephone, Skype and others.
• Direct communication: making business trips in the status of having a high potential
customer with a big project.
Customer relationship: Italwarmi is creating a tense relationship with potential customers as a
supplier with highly advanced technical assistance. Using two types of customers assistance:
• Personal assistance: inwhich the customer can interact directly with the Italwarmi
employees in the pre-purchasing, purchase and post-purchasing stages.
• Dedicated assistance: for big companies in the Middle East, there is a possibility to interact
with the customers in Arabic to be more confident in clarifying their project specifications.
Revenues stream: the main revenue stream of Italwarmi is 5% commission from the total
amount of each order from Sunmaster, 0.01 $/Wp from Amerisolar, 0.01 $/Wp from Canadian
solar.
Key resources: Italwarmi achieves its objective regarding the accessibility to the following
resources:
• Financial resources: investing the cash inflow as revenues from the sales growth of
Sunmaster, Amerisolar and Canadian Solar.
• Technological resources: including several technologies such as (Office, PC, Internet and
telephone).
• Human resources: Italwarmi has highly skilled professional employees with willingness and
capability to increase company performance.
Remark: Itawarmi has a diversified product portfolio that gives the company the
advantages of sharing of resources, sharing of competences, similar target markets.
Key activities: Italwarmi can achieve the objectives through these remarkable activities:
• Sustainable communication with the customers:
- Doing a registration in the CRM system and sending them periodic emails like advertising
and newsletters to keep the customer updated with the new products and product
developments.
- Automatic following up emails after sending them the price quotations.
- Calling the customers by phone or web conference to increase the reliability.
• Digital marketing: the marketing strategy is creating various online marketing tools on the
Sunmaster and Amerisolar platforms to attract more customers. The tools are:
- Launch an online course: the course contents illustrate all about the SSL to increase the
new entrant’s knowledge because one of the barriers is the lack of technical knowledge.
The online course is consisting of 30 Episodes reviewing all the technical details and
parameter of each component, how to do the design, and how to do the installation.
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Thanks to this course, the reputation of the company increases and the traffic on the
Sunmaster platform is going up.
- Ask an expert service: it is a problem-solving service that the customer can go through
in case he has any urgent technical inquiries. It is a low-cost service 100 USD.
- Articles blog: writing technical articles about the PV applications and the new
opportunities then published on the website blog, which makes the website more
professional.
- Webinar: Recording a video about the company presentation and publish it on the
webinar.
- Platforms: creating short videos for Social Media platforms such as (LinkedIn, YouTube,
Facebook).
- Improvement the documentation: the routine activity is sending the customer the price
offer with the technical data sheets. The improvement process is aiming to restructure
the form of the documents, especially, the technical data sheet, the catalogues and price
lists as a very crucial issue to send a precise, reliable, accurate technical details about
each component of the SSL and indicate all the technical parameters to facilitate the
technical evaluation from the customer side.
- Business profile: continuously updating the business profiles and the companies’
presentation, including the design and the content of the documents.
- Projects reference: creating a projects gallery, including the big projects that have been
done by the company. Explain all the project details such as the project specifications,
the project location, the main partners and real images for the installation and the
operations activities.
Key partners: Italwarmi establishes tight partnerships with shareholders and stakeholder
partners in the sense that the main factors of any business sustainability are good business
relations and professional communication skills. The key partners of Italwarmi are:
• Sunmaster: a Chinese company released in 2006 with more than 13 years’ experience in the
solar lighting industry with a production capacity 500,000 sets SSL per year. The company
has a turnover 35000000USD in 2019 with around 80% from the domestic and the Indian
market.
• Amerisolar: an American company with several manufacturing plants in Far East countries
such as China, South Korea, Taiwan and Vietnam with production capacity 1200MW. The
company is a professional manufacturer of Crystalline solar panels, transparent and thin
films.
• Canadian Solar: founded in 2001 in Ontario, Canada, the company has manufacturing
facilities in Canada, China, Brazil and South East Asian countries, Canadian Solar now has 9
GW production capacity.
Cost structure: Italwarmi model is a value-driven business model; the principal objective is to
maximise the attractiveness of the key partners’ value proposition. Italwarmi faces the labour
cost, office facilities expenses and taxations.
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5.3. Kuwait Salem Air Force Base case study
Introduction
To participate in projects outside the company boundaries, Sunmaster has decided to go with
the strategic alliances with EPC, lighting and contracting companies in the project location to
facilitate the negotiations and the implementation phase.
Remark: Italwarmi is using the name of Sunmaster externally, but for administration
considerations in Italy, they are running as Italwarmi.
Sunmaster has implemented a solar street lighting project successfully in Kuwait through
creating a strategic alliance with Bait AL-Aseel lighting company in Kuwait. Who has an
excellent business portfolio in the local traditional lighting sector, but they have a lack of
experience in the execution of the SSL projects since the solar application is a new technology
in the Middle East. Their weaknesses were the key entrance to sign an exclusive project
agreement with them in order to assist them technically and economically by supplying Salem
Air Force Base project with a high-quality solar lighting product besides the technical
consultancy for the design and installation phases at a very highly competitive price against
Philips, GE and Sol Inc.
5.3.1. The project description
The project scope is the construction of the outdoor lighting facilities for two roads of Salem
Air Force Base in Kuwait based on the following dimensions:
- Road1 is 10 metres width divided into two lanes with a distance 10 Km.
- Road2 is 20 metres width included two parts with an island in the middle, each part is
divided into two lanes with a distance 7 Km 800 metres.
Sunmaster
Ministry of Defence
Dar Al-Handasa
(Consultant)
Leonardo Aerospaces
Bait Al-Aseel
(Lighting Company)
Figure 38: Salem air force base project’s stakeholders.
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5.3.2. Determination of the project configuration
Based on the dimensions as mentioned above, the technical department determined the
system configuration concerning the following steps:
1. Using the configuration formulas to identify the suitable pole height, LED fixture height and
the pole distance as noted in the screenshot of the Excel sheet.
2. Determination of the LED power from the down table.
Pole height (m) 3-4 4-5 5-6 6-7 8-9 10-12
Led power (Watt) 5-20 10-30 20-40 30-40 50-80 60-120
Table 11: choosing the optimal LED wattage. Source: Sunmaster technical department.
Figure 39: result from the excel sheet of the initial lighting configuration. Source: Sunmaster technical department.
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3. Measuring the Solar Irradiation by using http://re.jrc.ec.europa.eu/pvgis.html
and insert the exact project location, accordingly, getting the average solar irradiation per
day. Identifying the lowest amount in the following chart then divide on 30 as the average
number of days per month over the year. In this project case, the average amount of solar
irradiation is 164/30= 5.4677 Kwh/m2/day.
4. Estimating of the solar panel output, battery capacity and the controller amps by using
Sunmaster specialized software calculator as pointed in the figure. The designer input the
loading data such as required lamp power, the number of days' autonomy of the battery
backup and the lighting hours per day. Usually, Sunmaster prefers to design the system
based on 24v as optimal operating voltage better than 12v because the 24 voltage in more
efficient and the power loss is lower than in 12 voltage system.
Figure 40: solar irradiation chart of the project location in Kuwait. Source: solar GIS maps.
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5. Finally, the approval of the configuration by using the Dialux Software: this software can
smoothly design the lighting for different applications such as whole building, emergency
lighting, the interaction between indoor and outdoor scene and road lighting. It gives an
accurate distribution of the light to avoid any distortion or allocating dark points between
the two lighting points and detect any deviation or faults in all the four previous steps.
Figure 41: screenshot of Sunmaster configuration software. Source: Sunmaster technical department.
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As shown in the figures, the Dialux identify the accurate Luminous flux, the wattage, the lamp
overhang and the pole distance.
Figure 42: the Dialux of the Double Arms. Source: Sunmaster technical data sheet.
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Remark: The configuration formula assumed that the optimal pole distance is 27m; on the
other hand, the Dialux determined 24m to the best choice configuration is 24m.The colour
rendering is an important parameter to ensure the right lighting distribution on the road
considering the determined distance between two lighting points and the width of the road.
As specified in the colour rendering figures, the accuracy of the lighting distribution and the
non-existence of any dark points along the road.
Figure 43: the Dialux of the Single Arms. Source: Sunmaster technical data sheet.
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Figure 44: the color rendering of the Double Arms. Source: Sunmaster technical data sheet.
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Figure 45: the color rendering of the Single Arms. Source: Sunmaster technical data sheet.
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Regarding the previous calculations, the configuration of the systems for the two roads are:
• Road1: a quantity of 404 single arm solar lighting sets.
• Road2: a quantity of 287 double arms solar street lighting sets.
Figure 46: road dimensions for the Single Arms. Source: Sunmaster technical department.
Figure 47: road dimensions for the Double Arms. Source: Sunmaster technical department.
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5.3.3. The Lighting configuration
Both roads have the same components of technical specifications as the following:
1. Fixture Model: STL42-65W.
2. LED Lamp: 65w/24v, 1pcs,4000k, Bridgelux LED chip >170lm/w, die casting Aluminum with
E-coat epoxy primer finish and powder topcoat to withstand the desert circumstances,
colour code is RAL7046.
3. Solar Panel: One piece of Poly-Crystalline solar panel 150w/36v.
4. Battery: Gel type 60Ah/12v, two pieces with free maintenance, Working Time: 10-
12hours/day and two backup days.
5. Pole: 8M height, Q235 steel hot dip galvanized, with bracket lamp arm and solar panel
bracket.
6. Wireless Solar Controller: Zigbee wireless remote control, one Piece of MPPT controller
10A/24v and protection code IP68. The End User has requested a smart management
control system to use it in the emergency cases such as night air strike attack; hence, they
can switch off the light by one click.
7. Battery Box: Galvanized steel on the top pole installation.
8. Cables: Complete set for the wiring and the connection between all the components is plug
and play to facilitate the installation activity.
9. Color code: RAL70469.
Figure 48: project wiring diagram for the SSL components. Source: Sunmaster technical department.
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In the above diagram, is showing one of the facilities that Sunmaster provides to the customer
to expedite the installation stage in a case that the customer will do the installation
independently. After the handover of the project, the customer asked for 200 Pcs single arms
as a project extension, and Sunmaster successfully supplied in the meantime.
5.4. Market players of SSL & SPS
The availability of financial and technical resources are the main drivers for the implementation
of energy efficiency projects. Since the EPC companies can compensate for the scarcity of the
technical capabilities for the targeted customers, EPC model is the best organisational structure
to start up in the energy industry addressing the Egyptian market and the GCC region in a later
stage. The main activity of EPC is providing solutions to overcome the production obstacles and
increase consumption efficiency. In the production aspect, the company addresses the solar
applications through supplying and implementing SSL and SPS projects in the residential,
commercial and the industrial sectors on the other side; the EPC introduces energy efficiency
measures to the industrial sector especially for the SMEs who are suffering from scarcity of
technical and financial capabilities.
5.4.1. Stakeholders identifications
A stakeholder analysis is a fundamental process to determine whose interests should be
considered when developing and implementing SSL & SPS projects. The managers can use this
analysis before starting a new project to detect potential barriers and the direct & indirect
benefits through the visualisation of the overall interactions between the different actors in
the project.
In the public tenders, the chief stakeholder of the EPC is the public institution who decides and
assign EPC the SSL projects. However, in the private projects, the procedures are much more
comfortable, and the timeline is shorter because the customer has better financial capabilities
than the PI and may go directly to a trustable EPC which has a professional business profile with
excellent projects references.
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EPC has internal and external stakeholders who play essential roles to get the project
accomplished that is going to be deeply explained in the project phases section. The following
part points out all the stakeholders in the EPC model and how the PI selects an EPC who
participates in the public tenders.
5.4.2. The evaluation processes
The process of selecting an EPC involves identifying potential partners, requesting proposals,
conducting in-depth analysis and evaluation of the EPC’s business profile to identify the best-
qualified EPC for the execution of the SSL project.
This selection of an EPC occurs through an RFQ & RFP process that compares the qualifications,
services, and pricing offered by multiple candidates. Firstly, the PI initiates the RFQ process
then, the interested EPCs submit their corporate resumes, business profiles, experience, and
initial plan. Once received, the PI creates a “short list” of 5-8 companies. This list is composed
of the companies whose profile best matches with the PI needs in the RFQ. Later, the PI asks
for an RFP that is a much more detailed explanation of the project.
This document contains all cost savings measures, products, M&V plans, and the performance
contract. The RFP process aims to inform the EPCs as early as possible with all the requirements
the PI may have regarding the scope and technical approach of the project. The PI objective is
to select the most well-suited EPC to implement the project precisely and to provide the
desired services in terms of the cost & technical criteria. The chart below outlines the typical
process used to select an EPC.
EPCInternal Stakeholders
- Owners.
- Managers.
- Empolyees.
External Stakeholders
- Public Institution.
- Manufacturers.
- Consultants.
- Sub-Contracting.
- External Investors.
Figure 49: stakeholders of SSL & SPS projects.
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The PI hires a selection committee for the period of the RFP process, which applies the
evaluation procedures, generally makes the selection of the winning proposal and criteria set
in the RFP. Thus, earlier in the RFP development process, and as an EPC, it is important to
determine who will join the selection committee to decide the most convenient criteria that
may be used to evaluate the proposals. The selection committee includes consultants that have
experience and participated in some similar existing projects, other members from the PI and
other interested stakeholders.
The committee evaluates EPCs’ initial proposals based on comparing the relative strength of
each proposal in terms of technical approach, experience, qualifications of the pricing and
compliance with other requirements submitted in the RFP. At this moment, the full
specification of the project is yet to be determined, and it is reasonable to give the criteria
relating the EPC’s qualifications and experiences a higher score in the evaluation than the
financial offer, which remains uncertain.
On the other side, the PI should introduce details about the project specifications and the data
that help the candidates to create a perfect project management plan and enable them to
decide the warranties, payment terms, on-going verification, and operations.
By analysing the proposals, evaluating on these criteria and giving scores to each category, the
hired committee can select a short list of the top-ranking proposals.
The final step in the selection process is to determine which top-ranked EPC can provide the
right solutions to reach the project achievement and meet the users need. After reviewing the
proposals, the selection committee evaluates the submitted solutions through an interview
with one or more of the top ranked EPCs. The most used approach for this interview is to
prepare one set of questions for all candidates, addressing any inquiries that remained
unsolved after reviewing the proposal. When the evaluators interviewed and scored each
interviewee, a combined score from the proposal and interview can be used to determine the
top-ranked EPC. For this reason, often, samples of previous work, contacting past companies
to get their feedback and a particular review of key personnel experience can be used to decide
whether the EPC has successful experience working with similar projects. Additional
confirmation of qualifications involves documentation from performed projects, client
feedback, and proof of the firm’s financial and organisational stability.
Issue RFP
(PI)
Host Pre-Meeting
(PI)
Site Visit
(EPC)
Evaluation of the proposal
(PI)
Assignation of the contract
(PI)
Figure 50: SSL & SPS projects tender process.
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5.5. The project phases
Once the EPC and the PI stipulated the contract, the project phases start. Here are summarised
the different phases of the project with the related activities carried out by the EPC.
Figure 51: project management phases.
5.5.1. Project Development
1. Energy Auditing (Ask an expert): once an EPC rewarded to perform an energy audit, EPC
and the PI sign initial contract. The scope of this agreement is to interpret the reach of the
audit and to set a minimal cost for executing the investigation, also noting the payment
terms. Typically, the cost of the energy audit is covered in the total financed amount if the
project proceeds through implementation. The energy audit is to be done through site
inspection, gathering of data, analysis of data and finally, the identification of the cost and
energy savings opportunities.
2. Feasibility analysis: the feasibility study is often provided by EPC as a free of charge to scope
the potentiality of implementing the energy savings projects. Often, these initial project-
scoping reports include as a part of a response to the RFP issue.
3. Contracting (Performance-Based Contract): it is the most convenient agreement between
the PI and EPC to implement the SSL or SPS project that aims to achieve the best available
solution with the highest cost efficiency. The two parties negotiate together to define the
terms & conditions of the project, and the contract declares the duties and rights of both. It
represents the framework the EPC will head through, identifying how they will implement
the project phases. The performance measurement phase remains across the time horizon
of the contract in which both parties can save their rights. Besides, this contract includes
payment terms.
Regarding the several types of Performance-Based Contract, the most appropriated types
for the implementation of the projects are:
• Guaranteed saving contract: they are the most common form of Performance-Based
Contracts and are widely used by the PI in case, the project is a replacement of the
traditional lighting technologies with SSL technologies. These contracts are characterised by:
- A term with a fixed payment schedule in which the EPC accomplish certain project stages.
- Financial resources typically provided by the PI.
- EPC would have no added benefit if savings estimates exceeded in case that the
implemented project is the replacement of traditional lighting system.
Project Development
ImplementationPerformance
MeasurementHandover
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• Shared saving contract: this type less frequently using than guaranteed saving contract, the
PI and the EPC share cost savings from the project in case that the implemented project is a
replacement of traditional lighting systems. This type is characterised by:
- Arrangements vary, but EPC gets a constant share from the saving that increases or
decreases over the time regarding the contract.
- The EPC typically provides the equipment procurement cost until covered by the PI after
a maximum period of 90 days from the equipment delivery.
- Both the EPC and the PI may obtain an additional monetary benefit if there is exceed
savings.
• Standard contract: this contract usually is using in the implementation of new SSL projects
in new areas where is no existence of the lighting systems before and it includes terms as
the following:
- Payment terms and condition.
- The warranties of the equipment and the performance of the system.
- Delivery time of the procurement equipment.
- The project timeline the execution stages.
- The project handover.
- Penalties for each party in case of deviation from the contract terms.
4. Designing & Engineering: throughout this stage, designers work to reach the most
appropriate design of the system. This design mainly based on the circumstances of the
project that will be provided by the PI and the data included in the energy audit report
collected within several visits to the project location. All these data should match with the
safety standards and the project budget.
5. Financing: the PI usually does not have enough financial resources to fund the entire SSL
projects, for this reason, they assign the difficulty of financial resources to the banks or to
the EPCs who have the capabilities to diversify the financial resources, increasing the
number of funds.
The source of financing can vary, and financial resources are often provided by large
institutional lenders, although in some cases the lowest share of capital may come from the
PI and the highest share from the EPC. Additionally, the structure of the debt may diversify
by the EPC financing experience; in some contracts, they allow the financing to be excluded
from the balance sheet and not accrue towards their debt limits.
• Self-Financing (PI capital): the PI full funds the project by outsourcing the budget from
external financiers or internal budgets or both. This financial structure is better for EPC and
reduces their financial risk.
• EPC financing: in many cases, an EPC provides funding for a project from their capital to get
in a return within 90 days from starting the project execution. This type is most commonly
an option when working with service providers; however, most of the EPC arrange third-
party financings like bank loans or private investors.
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5.5.2. Implementation phase
1. Equipment Procurement & Installation: once the contract rewarded, the EPC finalises the
design, purchasing the equipment, and works on the installation of the equipment stage.
2. Commissioning: the EPC is doing this stage to guarantee the effectiveness of the equipment
and the system configuration, ensuring that the design matches the project targets.
Commissioning is typically performed by the EPC, but the PI may address an independent
commissioning agent as a consultant.
3. Operations & maintenance: O&M activities are essential to keep on the guaranteed savings
and the system efficiency over a specific time noticed in the Performance-Based Contract.
The PI or the EPC is responsible for the O&M activities, and they are a source of cost savings
due to avoiding the expenditures for equipment repairing or equipment replacement
regarding the technical faults.
4. Facility management: the EPC provides training to the operators on the new technology
including operating and maintenance issues, how to interact with any normal faults directly
and solve it without losing time and, resulting, a cost reduction.
5.5.3. Performance measurement
1. On-going operations & maintenance: ensuring the continuous O&M after implementing the
Performance-Based Contract is necessary to sustain the savings related to the lower energy
consumption. It is necessary to plan and manage these activities to guarantee that adequate
staff is highly trained to perform and solve the faults at any time.
2. Periodic measurement and verification (M&V): initial savings verification activities may
include surveys, inspections, spot measurements, and short & long-term metering. The
project will be accepted after these commissioning and savings verification activities have
been completed. M&V has the advantage to:
- Quantify energy savings from a project.
- Monitor equipment performance.
- Ensure savings persist and identify additional savings.
- Verify proper O&M.
- Verify cost savings and performance guarantees are meet the customer objectives.
3. Technologies performance: equipment performance is another crucial factor to optimise
energy consumption and reach the optimal savings. The EPC is responsible for maintaining
the high performance of the technologies, they have to assure that the improvements meet
the expected performance levels and the targeted saving. Therefore, preventative
maintenance activities can positively impact the performance and life cycle of the
equipment.
The EPC does that by initiating M&V plan declares the responsibilities to reach long-term
high performance, including who holds repairing the broken components or equipment. In
case the equipment life is shorter than the contract period, it is considered scheduling
replacement in the financial plan.
The M&V plan should also define how the performance is testing, and what are the
procedures if performance does not meet expectations or if inadequate preventive
maintenance impacts performance.
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5.5.4. Handover
After passing all the previous stages successfully, the project will be closed out at the end of a
Performance-Based Contract; accordingly, all financial commitments between the PI, the EPC
and the financiers will be resolved. Project handover typically occurs at the end of the planned
performance period but may occur earlier if EPC terminates the project for convenience.
Since one of the main barriers for the implementation of this project is the scarcity of capital
income, technical knowledge, and accessibility to financial resources, PIs turn to address to
EPCs. Most of these companies, indeed, have the capabilities and experiences to overcome the
economic and technical barriers by providing the best available solution.
Remark: In the procurement stage, Sunmaster and Amerisolar will play a central role to support
the EPC as a startupper company by providing very competitive prices and LC payment terms
within 90 days limit, in addition to their high-quality brand with a global reputation.
5.6. Startup introduction
After getting the profitable result within six months since the initiation of Italwarmi’s
developed business model, the idea of
releasing an EPC company in Egypt raised by
investing part of the 33% profit from
Italwarmi. Consequently, I started to create
a new business model for Sustainergy as an
EPC startup to operate in SSL & SPS sector in
Egypt. Italwarmi collaborated Sustainergy as
an accelerator, offered all the services and
assistance such as office, technical service,
sales force, and networking with potential
partners. Italwarmi will obtain a profit in
return by increasing Sunmaster &
Amerisolar growth of sales in Egypt and
been able to participate in tenders through
Sustainergy. After an evaluation stage in the sense that if Sustainergy business model reaches
success in Egypt, both parties will expand the operating in the GCC through upgrading the
existing business model to fit the new marketplace circumstances.
5.6.1. The Startup theory
“The startup is a temporary organization in search of scalable, repeatable, profitable business
model” Steve Blank. Which means that the startup is not a smaller version of a large company.
It is a flexible business model that passes through a transition stage into a company due to
scaling up and repeating the activities that lead to maximising the profits. When the startup
grows and becomes a company, it changes the management team, switching from initial
entrepreneurs to senior managers.
67%
33%
Shareholders
Italwarmi Egytalia
Figure 52: profit share between Sustainergy & Italwarmi.
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The search The execution
of of
the business model the business model
5.6.2. The lean startup methodology
The lean startup splits the startup into two phases: Search and execution.
1. Search: this stage includes two activities:
• Customer discovery:
- Market segmentation by customers.
- Understanding each segments’ problems and needs.
- Focusing on the high potential customers to generate maxim profit.
- Sustainable development of low potential customers and support them for
future collaboration.
• Customer validation:
- Create a sustainable business model that fits with the market circumstances and
internal capabilities.
- Test the business model if it does not work, pivot and iterate the process.
- If it works and generates profits, start future development.
2. Execution stages:
• Customer creation:
- Build a stable relationship with the customers for long term collaboration.
- Monitoring the performance of the business model.
- Build demand through marketing and sales.
- Scale up the business.
• Company building:
- The transition from startup mode.
- Customer development team.
- Function department.
CompanyTransitionScalable Startup
Figure 53: Startup Process Stages.
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5.7. Sustainergy Business Model
Based on the above-mentioned theory, the startup is built on the following business model.
BMC is representing Sustainergy as EPC company, describing the value that the company offers,
Identifying the main partners, key resources.
Figure 54: Sustainergy Business Model.
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Customer segment: Sustainergy addresses different customer segments Like:
• Industrial sector: by trying to approach all the industrial companies, especially, SMEs who
do not have enough financial and technical capabilities to operate efficiently.
• Commercial sector: including agricultural companies, hospitals and shopping malls.
• Residential sector: focusing on the private & public construction companies in Egypt.
Value proposition: Sustainergy adds value to the segmented customers over introducing
designing, budgeting, supply, execution of the SSL & SPS projects. Furthermore, providing
energy solutions to all the industrial sectors companies to diminish their energy consumption
efficiently. In particular, the company reaches all the sustainability aspects as:
• Environmental: by decreasing the lighting pollution, carbon dioxide emissions and
degrading energy consumption from fossil fuel.
• Economical: raise the energy saving, which results in reducing the operating cost, besides,
lessen the financial risk of the investment for the PI that has a scarcity of technical & financial
resources.
• Social: improving the traffic and users’ safety, progressing the security and upgrading the
outdoor architectures of the cities, moreover, creating new job opportunities over time.
Channels: Sustainergy could reach easily segmented customers through:
• Communication Channels: Italwarmi is practising a robust digital marketing plan and
utilising various marketing tools (online courses, word of mouth, exhibitions, project
references, publishing customers feedback, online technical articles, business trips). Besides
considering that Sustainergy will follow the same tools independently.
• Direct contact: by (phone, E-mail, meetings) with the main stakeholders to manage
negotiations about specific deals & agreements, in particular with:
- The customers to arrange and confirm the Performance-Based Contract.
- Creditors (banks or external investors) to increase financial resources.
- Designers to formalise the layout of the project.
- Manufacturers & Supplier to purchase the project equipment.
- Co-contractor to execute the installation & maintenance plans.
• Distribution Channel: which represent in delivering all the physical requirements to the
project location such as (LED lamps, solar panels, sensors, cables, junction boxes, poles,
switches, batteries). The company will do this part by collaborating with a logistics company.
Customer relationship: there two cases in which Egytalia to build business relations with the
customers:
• Execution of SSL & SPS projects: after rewarding the project through RFD & RFQ, the
relationship between the two parties will be developed via:
- Co-creation: negotiating with the customer to define suitable terms of the
Performance-Based Contract for both.
- Formal agreements: officially signing the contract.
- Direct action: initiating the agreement while starting the project stages.
• Supply SSL & SPS projects: Egytalia builds a stable relationship with the customer by:
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- Offering the project design for free.
- Offer special prices based on the quantity.
- Offering the online course free of charge as a promotion for high quantity orders.
Revenues stream: there are three revenue streams:
• Commissioning fees from selling Sunmaster products as an exclusive agent in Egypt plus,
Amerisolar and Candian solar panels as an intermediary agent.
• Revenues from Installation and execution of SSL & SPS projects.
• From the energy audit and introducing energy solutions to the SME.
Key resources: Sustainergy achieves its aim thanks to the following necessary resources:
• Financial resources: the company can build its financial plan based on crediting bank loan,
commissions from Sunmaster & Amerisolar, customers budget, and Private investors.
• Technological resources: Sustainergy is adopting several technologies, for instance (LED
fixtures, solar panels, batteries, poles, mounting structure, foundation kits, and cables).
• Human resources: such as designers, technicians, operators, consultants, and engineers.
Key activities: Sustainergy does remarkable routine activities to achieve its goal through:
• Energy Audit:
- Identification of energy and related cost saving opportunities.
- Estimating solar irradiation.
- Measuring the road dimensions.
- Measuring the installation area (SPS project).
• Designing & Engineering: the creation of the construction layout, the LED wattage, the
power of the solar panels, the battery capacity, the pole height, and the wind resistance,
the distance between the lighting points and the battery position.
• Financial plan: diversifying the financial resources to increase the budget.
• Equipment Procurement: purchasing the required equipment from manufacturers &
suppliers.
• Installation & Commissioning: both start in the implementation phase consequently.
• Operations & Maintenance: starting the activation of the lighting system accordingly
monitoring and detecting faults to fix it.
• Facility Management: introduce specialised training for operators regarding the advanced
technologies of the smart control system.
• Performance Management: periodically measuring the LED lighting & the control system
efficiency besides calculating the amount of saving energy.
Key partners: Sustainergy establishes valuable partnerships with certain entities in order to
better introduce the service in a cost-efficient way.
• Manufacturers & Suppliers: Sustainergy has a strong relationship with Sunmaster and
Amerisolar who provide the SSL & SPS projects with the most effective technologies and all
the equipment at very competitive prices and reasonable payment terms such as a letter of
credits after 30, 60 or 90 days.
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• Consultant companies: Sustainergy should introduce their business profile, project
references and, the product samples to the consultant companies to be registered on their
vendor list and increase the company reputation rapidly.
• Public Institutions: for instance, (Municipalities, local authority, highway authority, Ministry
of Electricity, Ministry of renewable energy) that would provide the EPC with relevant and
specific data and information about the project circumstances.
• Creditors: who would supply the Sustainergy with the financial resources.
• Logistic company: who in charge of the equipment transportation from the port to the
project location.
• Lighting companies: by creating Strategic Alliances with them in the Middle East countries
as occurred in Saudi Arabia and Kuwait.
• Contracting Companies: The same collaboration of the lighting companies as with Marshall
International in Yemen and Green wave in Qatar.
Cost structure: Sustainergy has different expenses related to (Labours, designing the power
systems, installation cost, maintenance cost, operational cost, taxation and the cost of capital,
equipment costs, M&V cost, other ongoing costs).
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5.8. Case Study for the Higher Technological Institute in Egypt
Egytalia has started to focus on the private projects in Egypt until getting the approvals on
Sunmaster’s products from the ministry of renewable energy and electricity to allow
participating in the public tenders. Egytalia collaborated with the Higher Technological Institute
to implement a solar lighting project for the parking and the entrance areas.
5.8.1. Project description
Herein in the layouts, the result of the site survey by using the google map, the technical team
identified the dimensions (width and length) of the paths and the parking slots. Regarding that,
the designer followed the same designing procedures as mentioned in the Salem Air Force case
study to assume the suitable wattage and the pole height.
Figure 55: layout of the parking area. Source: Sunmaster technical department.
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In this application, The technical department recommended the Integrated lighting product
(All-in-one) over the split system because it is more economic sufficient, give better
architecture view for the university and more energy efficient due to the motion sensor that
dims the light during the low traffic period then goes brighter in the high traffic. The light sensor
is automatically switching on the light after dusk and turning it off after dawn. Furthermore,
Egytalia suggested WiFi security cameras for the 24 hours/day security video surveillance with
a low price that gives the ability to watch the range area from a monitoring room. The same
solar panel of the lighting set powers the cameras by only using 63AH battery capacity rather
than 42AH.
Figure 56: layout of the entrance area. Source: Sunmaster technical department.
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5.8.2. Project result
This table figures out the project feasibility analysis noticing 7,210USD as a net profit has been
generated from the project without paying taxes because the government set zero taxation
incentive in the first year for start-up companies that have been owned by youth under 35
years old.
An internal benchmarking between the split system and the integrated lighting pole has been
carried out to confirm which module is cost and technical efficiency to be adopted in the
parking zones and the small applications. As in the tables, the unit price of the single arms All-
in-one set is 530USD and the price for each lighting split system is 1,020USD, concluding that,
the price difference does have much impact on the total budget of this project due to the small
required quantity. However, the price range will show the customer preference to go with the
cheaper module in the significant quantity projects for the same applications hence, both
modules give the same technical performance even more, the integrated module has better
architecture design and more comfortable in the installation because all the components are
connecting together as a plug and play.
Factors Price offered $ Cost $ Profit $
Survey 0 0 0
Design 200 0 200
Sample 200 100 100
Procurement 15000 9340 5660
Customs clearance 300 300 0
Transportation 800 800 0
4 workers / 3 days 2000 1250 750
Crane Leasing / 3 days 700 700 0
Civil works 1000 500 500
∑Sum 20200 12990 7210
Table 12: feasibility analysis for HTI project.
Table 13: prices and technical specifications of the All in One. Source: Sunmaster price offer.
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5.9. Future development of Italwarmi & Sustainergy
All entrepreneurs seek business sustainability and new business opportunities. The company
should maintain business development by continually improving the company strategy, setting
new plans and Identifying new profitable objectives and entering new markets. Additionally,
undertaking activities toward innovative ideas in order to introduce new products and enhance
services.
5.9.1. Blue ocean theory
It is one of the advanced strategies that is using by managers to enter new markets beyond the
domestic demand boundaries through exploiting the first move advantage to discover new
markets and avoid the high competition in the exiting crowdy marketplace. The traditional
strategies are successful and adding value only in the existing market in which the decision
makers should trade off the cost reduction and adding more value for the products or the
service to reach the customer satisfaction and increase the growth of sales.
Nowadays, entrepreneurs think in a creative way outside the box by considering the following
principles:
- Creating or discovering unfought market space.
Table 14: prices and technical specifications of the split system. Source: Sunmaster price offer.
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- Make the competition irrelevant.
- Create and capture new demand.
- Break the value and cost reduction trad off.
- Align the whole system of the company’s activities in pursuit of the differentiation and
low cost.
The question is how to adopt this methodology in Italwarmi business model as future
development. The idea is after reaching well positioning in the GCC countries and Egypt in the
long run. The decision makers should consider the futuristic change of the circumstances in this
region. There are uncontested market spaces in three countries where many people in business
hesitate to expand their business activities and put efforts to enter these marketplaces because
they are unsecured areas and the market seems unstable. In Syria, Iraq and Yemen, there is a
huge business opportunity for all the applications of the PV sector. These countries are
suffering from lack of energy resources after the civil war, and most of their infrastructure and
energy utilities have been destroyed. The potential opportunities are correlating to the
necessary needs to rebuild the energy utilities under the supervision of international
organizations such as the United Nations. These countries seek to collaborate with the united
nations in the commercial and the technical aspects of the PV projects. The UNOPS started to
release many tenders for all the segments of PV sectors residential, commercial and industrial
to implement a vast installation capacity projects related to the SSL and SPS applications. These
markets are less competitive and have a huge potentiality.
The two categories of the blue ocean (formulation and execution) are under the structure to
be ready for the implementation at the mid of 2020 after finishing the market analysis in Syria,
Iraq and Yemen.
5.9.2. Product & Service innovation
Thanks to the highly advanced technologies that sunmaster adopt in the mechanical workshop,
the company can produce new high-quality product range such as solar built-in lighting pole,
carports, mountings solar poles for video surveillance, mobile solar power and solar power
cabinet. Based on Sunmaster’s manufacturing capabilities, Italwarmi and Egytalia can promote
new products on the market.
The development of the technical department is a crucial part of reaching product and service
innovation. Since the service that the company introduce is a technical consultancy, and
product innovation are relevant to the product design, the quality of both will increase by
enhancing the technical skills of human resources. That might happen by hiring high skilled
designers, technicians and engineers or through introducing training programs to the
employees. Product and service innovation will be the responsibility of Sunmaster, Italwarmi
and Egytalia. The three parties will participate in the development by sharing the resources
according to their competencies and the availability of the resources for each.
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5.9.3. Energy efficiency service
More ambitious toward the future, Egytalia is considering a creative idea of expanding the
company activities comprises introducing energy efficiency technical consultancy covering the
energy consumption aspect in the industrial sector. Egytalia will plan to enhance the technical
skills by building energy efficiency team that enable the company to proceed energy
assessments and energy audit services and introduce energy efficiency solutions through the
adoption of the best available cost-efficient technologies in the market.
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