TWP Factory, Power Plant, Solar Farm
Proposal for
Acquisition of ~10 acres on Mojave
Ranch Road and Funding of TWP
Production; Creation of a Solar Farm with a ~7% Cap Rate with
Peripheral Non-Destructive Lateral Expansion Potential; Future Leverage
and
Security for Next-Stage
Funding; Risk-Offset Due to Inherent Property Appreciation.
The
following is a plan for the acquisition of a ~10-acre site on Mojave Ranch
Road, Joshua Tree, for the purpose of creating a factory for manufacture of TWP
installations, and a 5-acre solar farm (on 9.7 acres land) with 900 TWP
installations, as a
commercial power plant, and showroom for future licensing of TWP
technology. The
location has an international profile, with 3 million visitors per
year, with 50% growth in the past 5 years, but one can traverse the
entire downtown area on foot in about
ten minutes. The property is on the outskirts of this downtown area.
This proposal follows an
established business model for solar power plants that have been
operating for considerable time now. There is a reasonable
expectation of even a ten percent cap rate or higher if operating income is
increased, efficiency maximized, or if/when favorable price fluctuations occur. Records show the land owner is selling multiple adjacent
lots; there seems like there could
be considerable latitude, an offer of 300k would not be
unreasonable. The same business model serves as a standalone powerplant, and as a manufacturing licensing hub.
Comparable Case Study
Cascade Solar, Joshua Tree
150 acres, 24MW, 0.16MW per acre
$16.7M budget, 66-day installation
Projected TWP Energy Output
5 acres, 2.6MW, 0.52MW per
acre @180 trees per acre, 2.9kW per tree
Mojave Ranch Road, Joshua Tree, CA
Considerations
There
are some normal
considerations
that are not a factor. Electrical power by law must and can only be bought
by providers of energy to the grid. There is only one customer, and by
law they must buy the product; therefore there are no salespeople, no
advertising, no costly and timely expenses that would be the concern of
almost all other businesses. The numerous benefits include the ability
to quickly adapt focus based on prevailing circumstances with zero lag
time. Energy futures can be sold wholesale; one of Joshua Tree’s solar
farms sells electrical power to a party in San Diego, albeit through the
grid, which makes sense for long-term, large-scale consumers of energy.
After 24 months when the
900 TWP installations are in place on the property, the building itself
can be adapted for a sympathetic purposes, which could
overlap the
property’s function as a power plant with zero loss of output; that is,
it could become another business or businesses without interfering with
the function of the power plant and therefore its income. While the
property is making income passively, the building can be used by more
active participants; arguably it would be better for security and
maintenance if the building was constantly occupied, as well as
providing multiple incomes with the same asset.
Acquisition and
Operation of Mojave Ranch Rd
|
Assets
|
|
Land and building
|
+$400,000
|
900 x TWP
installations
|
+$2,250,000
|
Improvements**
|
+$150,000
|
Operating income
|
|
5 acre, 2.6MW
powerplant
|
+$18,720/mth
|
|
+$224,640/yr
|
|
|
Liabilities (annual) |
|
Property tax
|
-$19,000
|
Maintenance
|
-$2,000
|
Insurance
|
-$3,000
|
Property management
|
-$0
|
Total liabilities (annual) |
-$24,000
|
|
|
Total
cost for acquisition and installation
|
-$2,800,000
|
NOI
(annual) |
+$200,640
|
Est. capitalization
rate
|
7.2%
|
Cap rate factoring 24 mths R&D
|
5.2%
|
**Structure, permits and
survey, grid link hardware
Solar Farm Operation
Compensation for surplus electrical energy: $40/MWh* x 2.6MW = $104/hr;
$104/hr x 6hrs peak sunlight = $624/day x 30 = $18,720/mth = $224,640/yr
*Price based on discounted electrical energy futures wholesale market-rate
Funding and
Operation of TWP 24 months
|
Human Resources
|
|
Contract engineering
firms w/20% contingency
|
$240,000
|
Machine operator 24
months
|
$100,000
|
Casting/Finishing
|
$30,000
|
Office admin 24
months |
$120,000
|
Equipment
|
|
3D Systems ProX 24 month lease
|
$280,000
|
DTG printer
|
$3,500
|
Waterjet cutter
|
$8,000
|
Grid link hardware
|
$10,000
|
Raw materials
|
|
3D printer
consumables
|
$20,000
|
Stock aluminum parts
|
$8,000
|
Finishing
|
$2,000
|
Operational
|
|
Insurance 24 months |
$24,000
|
Utilities 24 months |
$24,000
|
License/Incorporation/Legal
|
$2,000
|
Electrician &
Permits
|
$30,000
|
Company Management
|
|
Salary 24 months |
$110,000
|
Total |
$1,031,500
|
Water Generation
Current commercially
available atmospheric water generators (AWG) can produce practically
unlimited amounts of water with the only constraints being electricity
and cost of the units. 5 x units of the well-established model GEN-350
($150k @30k each) can produce approximately 5,000 gallons a week if it
were to use 20% of the solar farm’s projected energy output. This could
be used to irrigate 0.2 acre of crops, producing over 4 tons of food
annually; or it could simply be used to grow native plants such as
wildflowers and grasses, encouraging biological life to thrive under
TWP’s canopy, providing the underlying soil with integrity via root
systems (soil erosion prevention and reversal).
.
|