Progress update 5

After meeting with my group this week, we got a good amount of work done and figured out a lot of things that we needed to address.

Our to do list included addressing technology, pricing for the system, cost savings for end users, production of the product, market sizing, and scalability of the product.

We researched potential competitors in the greywater recycling and solar energy business. For example, we looked at SunRun and Solar City and saw how much they priced their product. We then used this number as the benchmark that we had to compare to.

The average solar system is around $25k for a 5 kW system.

We figured out our pricing by first finding out the cost to produce a solar panel - about $2 per watt and they usually sell for around $7 per watt. A more detailed view of our pricing and potential revenue is as follows:

Unit economics:

1. Number: 92,000 new homes in California each year; 1% of this each year
1. 1% x 92,000 = 920
2. Revenue: 920 x $16,300 =  15 M
3. Cost:  
1. $1 per watt; $5,000 for 5 kW system
2. 920 x $500 = $460 000
4. Total profit per year: Revenue - cost = $12.7 M
5. Total profit for 5 years = $460 000 x 5 = $63.5 M

We are assuming we sell to construction companies who build new homes so we used the amount of new homes built in California each year.

As shown, there's a potential to make a lot of money assuming construction companies buy our product.

Though we have a better idea of our pricing, I'm still worried about our production. Since the product is not commercialized yet, the professors don't have concrete information on the production of the solar optics panels, but they said it would be similar to regular solar systems currently in the market. The real question is: where and how are we going to build these systems and how do we install the system in different types of homes?

We have scheduled a time to talk to the researchers of the patent and are reading the research paper on the patent, so hopefully we can resolve these issues soon.


Venture Dojo:
Sometimes when I click on the video, the three dots come to show that it's loading, but it takes forever, so I have to refresh the page. I don't like how I have to press the button when I'm done with the lesson. I'd rather have it be like Udemy in which the next video automatically loads. Udemy is way nicer from a user point of view for this type of product - automatic loading of the next video and no need to click complete lesson.