Case # 3:
Background of the Case
On February 27, 1981, the Federal Republic of Germany and the Republic of the Philippines entered into a contract to develop applications of solar energy in the Philippines. The project was called the Philippine-German Solar Energy Project (PGSEP). It was funded by the German companies with a counterpart fund from the Philippines Office of Energy Affairs (Non-Conventional Resources Division). Philippine National Oil Company (PNOC) was the implementing arm through its Energy Research and Development Center (ERDC).
The technology introduced by the Germans is for the installation of stand-alone photovoltaic energy generating systems or solar energy systems for households that are out-of-reach from the conventional power grid. More than 17 kilometers of distance from the power grid would make the PV systems unfeasible because if it is much shorter than that, the cost of extensions line from the power grid will be cheaper.
PGSEP is looking for a local group or company to undertake the project commercially because the contract prohibits PGSEP from commercializing the venture. Anton Co the entrepreneur-owner of ALCO Group along with Bingo Dimalata, the consultant of the company, were invited to see the prospects. Anton Co’s intuition was optimistic but he asked Bingo to the make a study and assessment on the prospects. ALCO Group is the mother company of Structura, Inc. (SI). SI has been working with PGSEP for 4 years, manufacturing best quality steel frames and bases for the solar panels. Now there’s an opportunity for SI for a business venture in commercializing the PV systems. Bingo Dimalata will make his recommendations on the viability of the SI project which is the commercialization of those PV systems.
Statement of the Problem
* Should Structura, Inc. Push Through with its Project On Commercialization of Photovoltaic Systems?
* Determine the best courses of action whether to push through with the SI project of commercializing the photovoltaic energy generation systems
Areas of Consideration
* Technology and experience of companies involved in PGSEP * Affordability and cost benefit of PV systems over the main grid or other alternative energy generation systems * Applicability of PV systems
* Reliability of PV systems in local conditions
* Potential market
* Maintenance of PV systems viability
* Social responsibility
* Struktura has worked with PGSEP for four years in manufacturing the steel frames and bases for the panels * SI manufactures best quality steel frames and bases for panels * Sunny tropical weather in most of the areas in the Philippines * Low maintenance cost compared to other alternative power generation systems
* The cost of extension lines from the main power grid is cheaper within 17 km. * Power generated for consumption from the stand-alone PV systems is limited * Rainy days or cloudy days can affect the system
* Large percentage of potential household still to be electrified * PGSEP is looking for a local group to commercialize the venture as PGSEP is disallowed in their contract with the Phil. Govt. * PGSEP has a pilot project undertaken already at Burias community with 120 customers on a waiting list * Large percentage of respondents willing to shift to solar energy systems * Large percentage of respondents willing to give down payment or obtain a loan to acquire the solar energy systems * There are other possible uses of solar energy as perceived by respondents * Numerous populations are still out-of-reach from the main power grid
* PGSEP project on stand-alone photovoltaic energy-generating systems will be terminated by the end of the year if they could not identify a local group...
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