Financing Models for RE Investments

To find financing models to ensure the succes of RE investments is one of the biggest challenges in the ongoing energy system change. Decentralized energy systems run by communities, private persones, cooperatives or associations affording different buisness models compared to todays mostly centralized systems.

To come up to those challenges in the scope of the PEA project new financing models for sustainable regional energy production were elaborated as well as financing system for new facilities of different dimensions.

Business plans are first and very important step for every investment. There are good reasons to write a business plan.

A business plan helps you to focus your project plan, consider timelines, financing, and documents the business case for their project. It will be a key part of the pitch to lenders for raising debt financing for the equipment purchase. It will be used to raise development funds from grants, city councils, and other organizations.
Your business plan is also a good tool to assess the cost and benefits of your project so you know if and how much you will save on energy after project implementation.

Reasons to write a business plan

1) To test the feasibility of your business idea.

Writing a business plan is the best way to test whether or not an idea for starting a business is feasible, other than going out and doing it. In this sense, the business plan is your safety net; writing a business plan can save you a great deal of time and money if working through the business plan reveals that your business idea is untenable. Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage, freeing you to move on to a new (and better) idea.

2) To give your new business the best possible chance of success.

Writing a business plan will ensure that you pay attention to both the broad operational and financial objectives of your new business and the details, such as budgeting and market planning. Taking the time to work through the process of writing a business plan will make for a smoother startup period and fewer unforeseen problems as your business becomes established.

3) To secure funding, such as bank loans.

You're going to need both operating and startup capital to start a new business and you have no hope of getting any money from established financial institutions such as banks without a well developed business plan. And established businesses often need money, too, to do things such as buy new equipment or property, or because of market downturns. Having a business plan gives you a much better chance of getting the money you need to keep operating or to expand.

4) To make business planning manageable and effective.

A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. The company's original business plan needs to be revised as new goals are set. Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.

5) To attract investors.

Whether you want to shop your business to venture capitalists, or attract angel investors, you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can take away and study before they'll be prepared to make any investment commitment.

Be prepared for your business plan to be scrutinized; both venture capitalists and angel investors will want to conduct extensive background checks and competitive analysis to be certain that what's written in your business plan is indeed the case.

Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase. If your business doesn't have one, maybe it's time to start working on one. The process of writing a business plan can do wonders to clarify where you've been and where you're going.

The plan will vary in its details, depending on your location, the actual energy resources and the type and cost of technology you are using, as well as operational costs, such as salaries, etc. The plan may also evolve over time, i.e., an initial, preliminary plan could be used to present the general business case to raise some seed money, but to attract outside investment to actually start the project, you will need detailed and reliable data on which technology you use, how everything will work, who is responsible, and especially what the expected costs are, based on actual quotes.

PEA partners work out a template to write a business plan which can be downloaded here.

According to the template examplary business plan were worked out for three PEA projects. The following list links the business plans for download.

1.) Building Renovation in Kraslava
2.) Solar Investment in Poland
3.) Wood chip gasifier

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