APIC Project Report: Solar System Development and Optimization

This project report, developed for APIC Project Development & Optimization Pty Ltd, details the development and optimization of a 50 KWh solar system. The report is divided into two parts: Part A covers project costs, including a detailed work breakdown structure, and cash flow analysis. Part B focuses on stakeholder analysis, sensitivity analysis, and economic evaluation. The project aims to minimize greenhouse gas emissions and adheres to Australian government regulations. The report includes financial data, assumptions, and estimation techniques like parametric estimation. Economic analysis is performed using Present Worth (PW) and Internal Rate of Return (IRR) methods, with the IRR calculated at 25.58%. The report concludes that the solar project is a viable investment, offering both financial benefits and environmental advantages, with a recommendation for project implementation.

Project Development
and Optimization

Table of Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY..................................................................................................................................................3
Assessment 2: Project Report (Part A)....................................................................................................3
Assessment 2: Project Report (Part B)..................................................................................................12
REFERENCES..............................................................................................................................................19

INTRODUCTION
The term project management is defined as a type of process under which all activities
and tasks of a project are performed in a systematic manner. Development of projects is the
mechanism and facility for preparing, arranging, managing and regulating the tools to meet
particular objectives. The cycle requires transport from design through building to enhancement.
The report is based on a project which is related to installing a new solar system with capacity of
50 KWh. There are two segment for this project under which first part includes information
about cash flow analysis, cost of project. While in the second part, information about stakeholder
analysis, sensitivity analysis is included in a detailed manner.
MAIN BODY
Assessment 2: Project Report (Part A)
Overview of project- The project has been chosen by APIC Project Development &
Optimization Pty Ltd that is related to launching a new solar system so that impact of greenhouse
gases can be minimized. The reason due to which project is selected is that it is according to
rules and regulation of Australian government (Duclos and et.al., 2016).
1. Total cost of project and work breakdown structure.
Total project costs indicate projected project cost for operational and maintenance costs
as well as deployment expenses during the construction process, also for the reasons of
minimizing issues. With regard to the project of the above-mentioned group, costs are
calculated below in such a way as to be as follows:
Serial
numbe
r
Details Cost in $
million % of cost
1 Solar P.V.
module 14 17.50%
2 Solar invertor 20 25.00%
3 Transformer 6 7.50%
4 Proactive 2 2.50%

device
5 Wire and cable 2 2.50%
6 SCADA/RMS 8 10.00%
7 Project
execution 2 2.50%
8 Construction
expenses 6 7.50%
9 Grid
evacuation 12 15.00%
10 Other official
work 8 10.00%
Total cost 80 100%
Work breakdown structure- A work breakdown (WBS) process is a distributable-oriented
breakup in managing projects and instructional design of a process into manageable pieces. A
job breakdown structure is a critical operation that sets up the team 's task in handy sections.
"Hierarchical overview of the total project scope created by the project group to accomplish
mission objectives and maintaining the required outcomes" is defined in the Body of Knowledge
for managing projects (Gajera, Dugar and Dave, 2016). With regard to the project of the above
business, below was developed WBS which is as follows:
Name of activity Total time Starting date Finishing date
1.Designing and
purchasing
10 days 14/10/19 24/10/19
1.1 Designing of
component of solar panel
3 days 14/10/19 17/10/19
1.2 Layout of labor force
need
2 days 17/10/19 19/10/19
1.3 Process of selecting
labor force
4 days 19/10/19 23/10/19
1.4 Buying of component
of solar panel
1 day 23/10/19 24/10/19
2. Civil working 7 days 24/10/19 31/10/19
2.1 Erection of pole of
solar panel
7 days 24/10/19 31/10/19

3. Works for installing
panel
12 days 31/10/19 12/11/19
3.1 Installing the solar
panel
6 days 31/10/19 6/11/19
3.2 Installing the battery
inside panel
3 days 6/11/19 9/11/19
3.3 Installing the charge
control for panel
1 day 9/11/19 10/11/19
3.4 Installing the lamp 1 day 10/11/19 11/11/19
3.5 Installing the sensor 1 day 11/11/19 12/11/19
4. Evaluation &
Commissioning
2 days 12/11/19 14/11/19
4.1 Commissioning 1 day 12/11/19 13/11/19
4.2 Evaluation 1 day 13/11/19 14/11/19

2. Cash flow diagram
Cash flow analysis- The cash balance of a business at some moment of time is the
contrast in the funds generated at the start of the conclusion of the accounting cycle.
Liquid cash the funds of the lender, the revenue of the capital expenditure and the asset
sales, and is spent on operating costs, operating costs, the main debt interest, and the buy
of assets such as machinery. This can be defined as a type of analysis in which further
time period cash is estimated (Glauche and et.al., 2017). Cash Flow analysis is an
assessment of a companies' income outflows and inflows from revenues, financing
transactions, and spend transfers. In other words, it discusses how the company generates
the money, where it comes from, as well as what the corporation as a whole has to do
with it. In regards with above company’s project estimation of cash flow is done in such
manner:
Particulars Year 1 (Amount in
$ million)
Year 2
(Amount in $
million)
Year 3
(Amount in $
million)
Year 4
(Amount in $
million)
Cash payments
Cost of material 42 - - -
Cost of labor 4
Maintenance charges 10 12 14 16
Loan repayment 12 12 12 12
Total cash payment
(A)
68 24 26 28
Cash receipts
Sales of energy
produced via solar
panel
50 30 70 90
Loan (50% of total
cost)
10 10 10 10
Investment 30 30 30 30

Total of cash receipts
(B)
90 70 110 130
Net cash flow (B-A) 22 46 84 102
2. Assumption made in the project.
In this project most of the financial data are taken on the basis of assumption such as:
 Financial data- Under the project all financial data such as total cost of project and
total revenues have been taken on the basis of assumption.
 Time duration of activities- In addition, time duration of each activity is also
assumed as per nature of each activity.
3. Estimation techniques used
In order to make estimation of total cost of project, there are range of methods and
techniques. This depends on project manager and team that which method they
implement. Herein, below technique which has been used in above project for cost
estimation is mentioned in such manner:
 Parametric Estimation- This method uses an equation to measure the expense of the
operation using the past records and other project variables. A predictive analysis has to
be determined between the empirical evidence and other factors. The method is used in
the aspect of complete project. Under it, estimation cannot be done in accordance of a
particular activity (Heimonen and Takala, 2019). In the context of above company’s solar
project, this method has been applied in accordance of total project’s cost.
4. Economy analysis and evaluation of the project by Present Worth (PW), or Internal rate
of return (IRR).

Project economic research helps to insure that limited resources are utilized effectively
and that innovation supports a nation and increases the well-being of its people. This is a
mechanism used by ADB to insure that ADB 's activities conform with the Charter. In
regards with above project, this analysis has been done in such manner:
 Analysis of issue- The problem before starting of this project is related to emission of
harmful gases in the environment due to uses of different kinds of energy generating
equipment.
 Evaluation of alternatives- In order to solve this issue, there are range of options which
can be applied in order to solve the issue. Though main alternatives are two that are as
follows:
Installing a solar panel
Using electronic gadgets
 Installing a solar panel- From all the advantages of solar energy, the most significant
benefits of solar is a completely sustainable electricity source. This can be found in many
regions of the world and is accessible each day. Like certain other carbon sources, we
cannot run out of solar electricity (Kvilinskyi and Kravchenko, 2016). Sun radiation will
be around as often because we have the sky, and it will be available to humanity for at
least 5 billion times before, as per science, the sun will disappear. In accordance of above
done analysis this can be find out that cost of installing solar panel is of $80 million
which can be covered up in next five years. If above company will install the solar panel,
then it can be viable for users as well as cost is also affordable.

 Using electronic gadgets- In order to generate energy there are a range of electronic
gadgets which can be applied by companies. Such as using battery vehicles, lights etc.
can reduce impact of harmful gases. The issue in applying these gadgets is lack of
durability as well as higher cost. Due to which this can become difficult for users to adopt
this equipment.
 Selection of suitable alternative- From analysis of both alternatives, this can be concluded
that above company should go with installing solar panel. If they will do so then this can
be helpful for them as well as users too.
Internal rate of return method- The Inner Return Ratio (IRR) is a measure used in capital
budgeting to assess the productivity of future projects. The intrinsic cost of return is the discount
rate that compares the net present value (NPV) of any and all retained earnings from a given
project to nil. Computations of the IRR are centered on the same principle as the NPV. In the
context of above project of solar panel, this method has been applied in such manner:
Year Cash flow
1 22
2 46
3 84
4 102
Discounting rate- 10% (assumption)
Lower discounting rate- 8%
Higher discounting rate- 12%

NPV at lower discounting rate:
Year Cash
flow
PV
factor
Discounted cash
flow
1 22 0.926 20.372
2 46 0.857 39.422
3 84 0.794 66.696
4 102 0.735 74.97
201.46
NPV= 201.46 – 80 Million
= $ 130.46 million
NPV at higher discounting rate:
Year Cash
flow
PV
factor
Discounted cash
flow
1 22 0.892 19.624
2 46 0.797 36.662
3 84 0.711 59.724
4 102 0.635 64.77
180.78
NPV= 180.78 – 80 Million
= $ 100.78 million
IRR- 8 + 130.46/ 29.68*(12-8)

= 8 + 17.58
= 25.58%
So the value of IRR is of 25.58 % in regards to above mentioned project. This indicates that
above project will generate at a rate of 25.58% in future time period.
5. Conclusion, findings and reason of recommendation.
Conclusion
From the above project report this can be concluded that companies should
choose their project in accordance of proper analysis of each and every aspect. In order to
do so there are a range of methods and techniques. The report concludes that this will be
viable for above company if they will launch the solar panel project. The selection of this
project has been done in accordance of economic analysis. It is so because in further time
period, this project will generate higher revenue and it has been determined by help of
internal rate of return method (Mancuso, 2016). This method articulates that project will
produce return with a rate of 25.58%. Apart from it, there are some assumptions are also
made for estimation of cost under which Parametric Estimation method has been applied.
Findings:
On the basis of above analysis of project some key findings can be interpreted in
such manner that are as follows:
 The solar project is more effective as compared to using electronic gadgets for
energy preparation.
 Along with this project will generate higher revenue in future because internal
rate of return is of 25.58%.

 The estimated cost of project is of $ 80 million which can be covered in next four
years.
 Company has taken loan of 40 million dollars which is 50% of total cost of
project and remaining fund has been invested by owner of company.
Reason for recommendation:
The reason due to which this project is being suggested to above company is that
it is cost effectively as compared to other project. Along with this project is not only
beneficial for company but also for general public, it can be useful because they can get
power at lower cost. In terms of financial perspective, this can be find out that cost of
project is not so higher and this can be covered in within four years. As well as return on
this project will be received at the rate of 25.58 % that is higher and viable for above
company in further time period (Mohagheghi and et.al., 2017).
Assessment 2: Project Report (Part B)
1. Identification and Justifications of parameters used in the sensitivity analysis.
In the sensitivity analysis a range of parameters are used by users on the basis of nature
of project as well size. In the aspect of above company’s project, sensitivity analysis has been
done on the basis of interest rate aspect and economic basis. Herein below analysis of these
parameters has been done in such manner that is as follows:
 Interest rate- In the context of above company, this analysis is done in the aspect of
interest rate. The reason due to which these parameters used is that by help of interest
analysis, it may become easier for companies to pay the debt amount. Such as in the
above company’s project, they have taken loan of 50% of cost of project which they need
to pay back. In the case when interest rate fluctuates then this may lead to different kinds
of financial issues.

 Economic factor- Along with the above factor, this factor also considered by above
company in the process of assessing sensitivity. The reason due to which this factor is
considered is that it is useful to find out potential impact of external environment factor
on companies’ project in further time period (Noorbazargan and et.al., 2018).
2. Conduct a sensitivity analysis with respect to interest rate and economic analysis.
Sensitivity analysis explains how various effects of an independent variable affect the indicator
under a variety of circumstances. In other terms, important work explores how numerous sources
of failure in a statistical model contribute to complete uncertainty. This technique is used under
certain restrictions that are focused on one or more input variables. Specificity analysis methods
are used by business and banking. This is commonly employed by economic and financial
analysts and is sometimes referred to as a study of some kind (Parhi, 2016) .
Interest rate sensitivity analysis- Sensitivity of the rate of interest is a measure of the degree to
which price of the a fixed-income asset is influenced by changes to the interest rate setting. Quite
competitive securities have higher rate variability than less receptive securities. So far as the
aforementioned business project is concerned, this review was carried out below in a manner
which is as continues to follow:
The proposal of the aforementioned organization shall be approved on behalf of the lender at
50% of the overall expense of the proposal. The interest rate is 10 per cent, which can be raised
and due to that they can encounter the following scenario:
Interest rate at 10% Interest rate at 12%
Total payable amount 50 million 60 million
Impact on EMI 6 7
Sensitivity analysis with respect to economic analysis- Owing to shifts in economic conditions,
the proposal above may have a positive and negative effect. Like in the Australian economy,
where there are larger improvements than regulatory adjustments, the implementation of solar
panel legislation may have an effect on the plant (Shahandeh, Rahim and Li, 2016). It is also

important for businesses to understand such economic conditions in such a way that their project
will deliver the desired result they want.
3. Identify Stakeholders
There are major stakeholders who are part of project solar system that requires installation of a
solar system with capacity of 50KWH electricity per day according to designated rate. This
project is also concern with Australian government’s policy to have focus on renewable energy
sources to address the impact of climate change. All the stakeholders are mentioned below:
Stakeholder Power
Renewable energy project developers These are the ones who are actually
responsible in development of the base of
solar project.
Government organizations Government will possess power to make
required changes according to their will
and need of they feel that there is some
essential requirement that must be
complied then those can be imposed for the
project managers.
Land use authority They possess power to make required
changes in the location of plant.
Project head They have to ensure that the project is able
to make necessary compliances that is
required in the project
4. Consider due diligence process and provide stakeholders engagement plan.

Due diligence is a process that is used by organization for making a detailed and complete
assessment of the target organizations business, capabilities and financial performance. There
are certain steps that are part of the due diligence process as mentioned below:
Analysis of the project objective: There is a need to make accurate analysis of the project
aim for which entire project has been set up such as in Present project of solar system the main
aim is to accompany the objective of Australian government objective of having a focus on using
renewable energy sources to address the overall impact of changes taking place in climatic
conditions (Wu and et.al., 2018).
Pre financial analysis: This is the initial step in which there will be a detailed analysis
made of the prospective project of installation of a new solar system. All the financial
requirement has to be analyzed before starting of the project.
Full analysis of business plan: In this step there will be a detailed analysis of the
prospective business plan that is installation of a solar system with 50KWH electricity every day
at the designated site.
Risk analysis: There are many different types of risks that are associated with every
project like financial resources in present case preparation of various financial statement like
cash flow analysis and estimation techniques will help in making accurate forecasts of utilization
of available finance required to successfully complete the project.
Creation of ongoing monitoring: After the completion of all above steps there is a
requirement to set up a process of ongoing monitoring where there will be efforts made to
continuously monitor the progress of project and steps towards achievement of final aim for
which solar system has to be built on.
Shareholder engagement: It is related to involvement of stakeholders in the mechanism
of all those individuals who are directly or indirectly part of a project. It will help in
development of a stakeholder engagement plan and stakeholders that are part of the project. It
includes
Stakeholder engagement plan

Stakeholder engagement plan is related to development of plan according to Interest possess by
stakeholder of the project.
Stakeholder Interest
Renewable energy project developers To get financial reimbursement according
to hard work and efforts that they are
making for the project.
Government organizations To ensure that project is according to all
regulations & rules that have to be
compulsory complied in order to ensure
that the project is sustainable enough.
Land use authority That project is installed at the right place
only.
Project head To gain higher revenues.
5. Consider project management and optimization with focus on sustainability
Project management can be describing as the process of managing different activities of
project in such a manner that it will lead to successfully complete project. It is crucial for project
manager to develop and create effective project management process that will support in
attaining goals and objectives. In this project is to create or launch a new and effective solar
system which will lead to have direct impact on greenhouse gases. Through successfully
implementation of solar system the impact of green house will be minimized and its will support
in reducing the negative impact of greenhouse on earth. Project management will lead to support
in successfully working all task and activities of project is effective manner so that the goal could
be timely accomplished. Project management is an effective process that is useful in
communicating all task and activities in significant manner. Through correct management of
project all operations of project can be timely completed. There are different aspects and
components which are related to project management process such as risk management, critical
thinking, cost management, scheduling and communication. By effective and efficient

management of this project, manger will be able to develop solar system in less cost as well as
able to determine different risk factors in order to correctly overcome it. Project management
process will support manager to negotiate with other in order to more effectively perform
activities of project. Through this it will be very easy for APIC project development and
optimization PVT LTD to timely launch solar system in market area. So that the issues of
greenhouse can be correctly and timely reduced. The main motive of developing this model is
related to the changes in rules and regulation of Australian government. Project management
process play as significant role in successfully completion of this project and timely launch of
solar system in market area with the motive of resolving the issues related to global warming and
greenhouse.
Sustainability is the concept that will lead to maintaining growth at certain level. Solar
system will lead to have positive and sustainable impact on environment sustainability is the
most effective and efficient manner. Due to solar system will lead to have significant impact on
the quality of environment as well as enhancing healthy communities. Due to this society will be
able to gain clean and air as well as gain optimum use of natural resources. Optimization of solar
system will lead to have significant impact on environment as well as reduction of negative
impacts of greenhouse (Zhang, Rappleye and Simpson, 2016).
Findings and recommendations:
From the report and calculations presented above, the following recommendations can be drawn:
 The actions plans for the project has been made after analyzing all the internal and
external factors like time, money, resources, labor, activity and so on. If the project gets as per
the specified period or as per the schedule then there would be high chances for the success for
the same. The project which is been under taken by the company would get complete at time.
Timely completed project would help the organization in using it on time. The project which is
undertaken by the company i.e. for installing the solar plant system would benefit the
organization so much.
 The project should have the contingency plans and risk assessments plan so that they can
cover for any kind of risks into the future whenever they arise. The contingency plans are the
plans which are made to cover any kind of uncertainty into the future. Contingency plans save
the project by covering all the risks which the project faced. The risk assessments also help the
project in assessing the risk which the organization might be able to face in between the projects.
Therefore risk assessments are very much necessary to calculate.

 Providing leverage in between the activities. The schedule which is prepared by the
organization should provide the possible or little leverage in it so that any delay in time or work
should not create any kind of obstacle into the work and the project can get complete at the
specified time.
The following findings or conclusion has been drawn from the above presented report:
 From the report presented above, the project would get completed within a course
of 1 year. The proper budgets or costing has enabled the organization in
ascertaining the approximate cost for the same. The cost which has been decided
is according to the present value of the resources. The report also includes the
work based activities which entails about the project activities which are going to
take place in a project. These activities are presented in a particular flow. This
flow is according to the sequence in which the organization would carry out these
activities. The calculations about the cash flow statements have shown the total
cost which the project would go to take and consume. As the project is related
with establishing the solar plant system, it would definitely incur quite huge cost
for the organization.
 The calculations of the total costs and total gain as also been presented into the
report. It has been found out that the organization can easily accomplish the
objectives or the goals when they seriously follow all the schedules for activities.
The planning for the project has ben done properly. The proper framework has
also been prepared in which the organization has specify the activities along with
the time which they would going to take in completing it. The risk, cost, time,
resources and scope all has been included into the project planning.

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