I. Executive Summary

Renewable clean energy comes from sources such as; solar, wind, biomass, hydrogen, geothermal, hydroelectric, and from ocean waves. The only forms of energy that are economical almost anywhere in the world are solar and wind energy. Though the sun shines everyday, the electricity produced through solar cells wouldn’t be enough to power an average home at all times. Therefore, wind energy is the consumer’s number one form of renewable clean energy to power homes and provide electric power for other purposes. Since a small wind turbine needs a startup wind speed, the location of the wind turbine is very important. The average wind needs to be a certain speed and the wind turbine needs to be efficient. TurbodynamX currently manufactures only one wind turbine, the CH CAP HORN 12/5.3, which is more efficient than any other unit of comparable size in the world.

TurbodynamX is a company that wants to produce and sell 12 kW wind turbine units in the Midwest. The CH CAP HORN 12/5.3 small wind turbine is a breakthrough in wind turbine technology. This wind turbine has a composite fairing around its blades. Imagine an long airplane wing surrounding the blades, due to the same reasons that airplanes get lift from its wing, the TurbodynamX’s fairing surrounding the blades produces a wind draft that gets sucked on the inside of the fairing This extra wind makes the TurbodynamX’s 12kW wind turbine 100% more efficient than any of its direct competitors. The CH CAP HORN 12/5.3 is able to produce electricity at wind speeds greater than any others wind turbine. While the competitions wind turbines have a low wind cutoff, TurbodynamX’s wind turbine keeps going at much higher wind velocities, therefore making it more efficient. Its breakthrough technology will keep the wind turbine producing 12kW continuously and returning a higher and faster payback.

Due to the rising awareness of air, water, and land pollution, Illinois and other states have set goals to decrease pollution all together and wind turbines are the forefront in meeting the states objectives. The increase in states incentives for using and connecting their renewable energy to the power grid will drive the consumer’s price for a wind turbine for half the price. These incentives and the highly efficient 12kW CH CAP HORN 12/5.3 wind turbine will be the leader in producing small wind turbines for farmers, green energy activists, early adopters of this technology, and entrepreneurs. There are many remote farms and homes that aren’t connected to the power grid, and they would benefit the most from TurbodynamX. While other homes and farms that are connected to the grid can buy a TurbodynamX wind turbine, these owners are more energy conscious and would like to make a profit in the long run. Entrepreneurs that would like to treat the wind turbine as an investment and companies that would like backup power for their facilities would also purchase a wind turbine, due to its clean and continuous power generation. Many of the 12kW CH CAP HORN 12/5.3 wind turbine owners would be very energy conscious people because this wind turbine is very efficient for its size. There are hundreds of remote farms and homes all over the Midwest with sufficient wind speeds. Therefore, these customers are looking already for a convenient and reliable source of energy, which provides an opportunity for TurbodynamX to give them just that and much more. Not only is the TurbodynamX wind turbine more efficient than any other but it on board processor and its low maintenance cost will keep any customer happy at all times.

As for the future, TurbodynamX will benefit from it as long as there is wind. In the near future, there will be more incentives which will mean more customers shopping for efficient, reliable, clean energy. More states adopting states incentives for renewable energy means that TurbodynamX can expand outside Illinois, Wisconsin, and Michigan. There are many states with or without incentives that can benefit from wind energy. TurbodynamX may also produce larger wind turbines that can power more than just two average homes. TurbodynamX wind turbine may find itself powering large scale homes, large businesses, and even maybe communities.

II. General Company Description

TurbodynamX is a company that produces wind energy equipment that generates clean renewable energy. TurbodynamX is interested in expanding the market for this renewable energy and to provide power generation equipment for consumers. It wants to be recognized as the leader in producing highly efficient, reliable, and cost effective wind turbines. This company wants to become the primary source of small wind turbines in the US. In the first year its goal is to produce, sell, and install 100 units and then increase sales volume by 25% annually. By the fifth year of production it is expected to reduce the installed turbine price by half, and have 25% of the market. TurbodynamX customers would be people or businesses that are not connected to the power grid. This includes institutions such as hospitals, schools, universities, and governmental buildings, energy conscious consumers, and industries. The wind energy industry is a relatively new industry in the Midwest, but increasing due to governmental green energy laws and incentives for using renewable energy. With more states adopting clean energy legislation the market for wind energy is expected to increase. This increase in green energy laws and the market will drive the consumers to TurbodynamX due to its quiet and more efficient wind turbine than any other on the market. This product is more efficient than that of any direct competitor. CITA (Compagnie Internationale de Turbines Atmospheriques) has developed the technology for TurbodynamX which has the right to license it in the U.S. and CITA in Europe. CITA has also developed a custom small wind turbine to be used in Antarctica.

Products and Services

The product produced manufactured by TurbodynamX is a 12kW small wind turbine. The blades are surrounded by a composite fairing which increases the wind velocity that passes through the blades. Blade pitch is variable which is controlled by sophisticated electronics, in order to protect the turbine and to generate as much power as possible. The wind turbine cell pivots at the top of the mast to face into the wind. The fairing allows a TurbodynamX wind turbine to produce as much as 50% more power than most wind turbines for a given rotor diameter. The variable pitch blades allow the TurbodynamX wind turbine to continue generating power at wind velocities greater than its competitors. The basic installed wind turbine cost will be $60,000. Wind assessment studies, ground studies, permitting, and regulatory work, are not included in this price. Leasing and financing will be available through a preferred financial institution.

Economics

The market for small wind turbine is relatively small compared to the overall size of the wind energy market. Wind energy is the fastest growing form of energy production in the U.S. and in Europe. It is estimated that wind energy grows at 25% each year. Wind energy in the U.S. is nothing compared to the amount of megawatts that European countries such as Germany, Spain, and Denmark utilize. When wind energy is talked about most it’s mostly known by huge wind farms where each wind turbine can produce as much as 3MW. TurbodynamX manufactures wind turbines that are smaller than 100kW and the market for small wind turbines is the greatest in the U.S. The leading producer of small wind turbines is the U.S. and the market for small wind turbines grew more than 35% during the past year. In addition, the U.S. has over 15MW of power generated from small wind turbines alone more than any other country.

The growth potential for TurbodynamX is increasing every year because of the rising incentives at the state level. Many states have issued buy-downs, retail production tax credit, net metering, and other incentives that help buyers pay for their wind turbine equipment and buy the excess electricity produced by the wind turbine. States adopting their own incentives will drive the small wind turbine market incredibly and help TurbodynamX to become ahead of any other company in the small wind turbine market.

TurbodynamX is a new manufacturer of small wind turbines but a barrier that it faces with the public is the unique technology that it has patented for its 12kW wind turbine. The composite fairing around the blades of the TurbodynamX 12kW wind turbine is a huge advantage to the wind turbine and a new technology developed by CITA. The biggest obstacle that TurbodynamX faces is convincing the public that the composite fairing is an advantage and a needed piece of equipment that improves a small wind turbine significantly. Another barrier that TurbodynamX faces is high production costs because of the expensive composite material it uses for its blades and fairing. TurbodynamX leading in the market for producing small wind turbines will drive the costs of the composite material down. New government regulations and incentives will drive the public to buy more economical small wind turbines and this will turn the public to buy only TurbodynamX wind turbines.

Product

The CH CAP HORN 12/5.3 is the only product of TurbodynamX right now. This is a 12kW small wind turbine that has a composite fairing around its blades (see Figure 1 in Appendix). This wind turbine also has blade pitch capability which faces the unit into the wind and regulates power generation as well. It only needs 30W of power to operate. Please see Appendix A.1 for further features of the CH CAP HORN 12/5.3.

The blade pitch allows power generation at up to 30 m/s wind speeds. The fairing and the blades are made from GFP Epoxy Resin. This makes the wind turbine relatively light, therefore making movements more efficient and with ease. The faring and the blade pitch allow the wind turbine to be very efficient in maintaining the 12kW continuously. The faring also helps the CH CAP HORN 12/5.3 achieve being one hundred percent more efficient in power generation than any other wind turbine of the same size. Due to the craftsmanship and the GFP Epoxy Resin, the maintenance is reduced to only once a year.

Customers

Residential Customers

Farmers Without Grid Access – Rural residences that are not currently connected to the power grid, and which are too far from the grid for connection to be economically viable.

· Age 35-70

· Gender Both

· Location Remote Rural

· Income level $17,000-$26,000

· Social class/occupation Farming

· Education High School/College

· Access to Grid No

Farmers With Grid Access – Rural residences that are currently connected to the power grid, but want a wind turbine to reduce energy costs.

· Age 35-70

· Gender Both

· Location Rural

· Income level $17,000-$26,000

· Social class/occupation Farming

· Education High School/College

· Access to Grid Yes

Green Energy Activists – Customers dismayed with conventional energy production practices who are willing to pay a premium in order to ensure they are using clean energy.

· Age 25-45

· Gender Both

· Location Metropolitan

· Income level $25,000-$65,000

· Social class/occupation Blue Collar/White Collar

· Education High School/College

· Access to Grid Yes

Early Adopters – Persons who have the financial capacity to purchase a wind turbine and do so simply for the novelty or bragging rights.

· Age 30-70

· Gender Both

· Location Metropolitan/Suburban

· Income level $45,000+

· Social class/occupation White Collar/Retired

· Education College

· Access to Grid Yes

Entrepreneurs – Persons intending to treat the wind turbine as an investment. That is, someone who purchases a wind turbine in hopes of generating enough electricity to both power his or her own home and sell the excess to generate income.

· Age 25-45

· Gender Both

· Location Rural/Metropolitan/Suburban

· Income level $30,000+

· Social class/occupation Self-Employed

· Education High School/College

· Access to Grid Yes

Corporate Customers

Service Critical Corporations – Companies that need a constant source of energy, independent of the power grid. Although connected to the grid, these companies need an uninterruptible source of energy to conduct their business. It will probably need to be connected to an electrical storage unit.

· Industry (or portion of an industry) Medical/Technology/Telecommunications

· Location Metropolitan

· Size of firm Medium/Large

· Quality/technology/price preferences High Tech/Reliable/Price is no object

· Energy Demand High and Constant

Energy Conscious Corporations – Companies that provide a green product, or wish to promote an energy conscious attitude. These companies are willing to pay a premium for green energy.

· Industry (or portion of an industry) Sporting/Outdoors/Various

· Location Metropolitan

· Size of firm Small/Medium

· Quality/technology/price preferences High Tech/Reliable/Price is no object

· Energy Demand Moderate during normal business hours

Schools – Schools which intend to teach the benefits of green energy, including wind energy, would greatly benefit from having a wind turbine on site.

· Industry (or portion of an industry) Education

· Location Metropolitan/Rural

· Size of firm Small/Medium

· Quality/technology/price preferences New Technology/Low Price (grants)

· Energy Demand Moderate during normal school hours

Government Agencies – These organizations would be able to greatly reduce the cost of wind turbines with grants and subsidies. Also, the energy generated by on-site turbines would help to fulfill renewable energy quotas implied by law.

· Industry (or portion of an industry) Government

· Location Metropolitan

· Size of firm Medium/Large

· Quality/technology/price preferences Low Price (grants)

· Energy Demand Moderate during normal business hours

Competition

Presently, TurbodynamX product consists of a wind turbine capable of generating 12 kW of power. Established companies also have turbines ranging from small to large, generating anywhere from a few hundred watts to a few million watts. The following is a list of major competitors and their location in the United States.

U.S. Wind Turbine, LLC - Kentucky
Airmisc Co. - Illinois
Enerex L.L.C - Michigan
Windstream Power Systems Inc - Vermont
American Independent Power - Massachusetts
Atlantic Orient Corporation - Vermont
Bergey Windpower Co. - Oklahoma
Free Earth Cooperative - California
Northern Power Systems - Vermont
PicoTurbine - New Jersey
Sencenbaugh Wind Electric - California
Southwest Windpower, Inc. - Arizona
Terra Moya Aqua, Inc. (TMA) - Wyoming
Wind Turbine Industries Corporation - Minnesota
Windlite Corporation - California
Wingen 2000 - California

The companies listed above will compete with TurbodynamX in production, sales and services offered after purchase. Even though TurbodynamX only has one competitor in Illinois, most companies offer out of state sales. In addition, the companies listed above offer a far more diversified product line-up including solar, water and hybrid energy units.

The services offered by TurbodynamX to its customers will be the same as any other renewable corporation. The TurbodynamX product, however, will be superior in quality and efficiency, driving the unit price down.

Table 1: Competitive Analysis

Factor	TurbodynamX	Strength	Weakness	Bergey Windpower Co.	Airmisc Co.	Windstream Power Systems Inc	Importance to Customer
Products	12 kW small wind turbine	x		10 kW small wind turbine	8 kW small wind turbine	12 kW small wind turbine	4
Price	$60,000		x	$35,000	$25,000	$42,000	5
Quality	Long lasting, services for any encountered problems	x		services for any encountered problems	services for any encountered problems	services for any encountered problems	4
Service	Installation, maintenance, services	x		Installation, services	Installation, services	Installation, services	3
Reliability	Great	x		Good	Good	Good	3
Stability	Great	x		Good	Good	Good	4
Company Reputation	Known in France, stating up in the US		x	US based	US based	US based	2
Location	USA	x		USA	USA	USA	2
Credit Policies	Credit for old products	x		None	None	None	3

From the table above TurbodynamX strengths outweigh its weaknesses. The price paid for a turbine from TurbodynamX is much higher than any of the leading competitors, but the quality and effectiveness of the product is also much higher. TurbodynamX turbine uses wind more efficiently to generate more power for longer periods of time. Even though TurbodynamX is a new company in the United States its sister company in France is well known and reputable.

Niche

The need for renewable energy in the world is increasing faster then ever. More and more companies are realizing and dealing with this demand by producing a wide range of systems producing power from natural resources. One of the most abundant resources that these companies are taking advantage of is wind. That is where TurbodynamX comes into play, producing the most efficient wind turbine available. Though the initial cost inches higher than leading competitors, the payback is higher, making TurbodynamX the company of choice.

Strategy

Promotion

TurbodynamX will use advertising, word of mouth, and renewable energy conferences to get the word out about their new product. Advertisements and articles can be placed in scientific and renewable energy magazines to introduce their wind turbine into the market. These will be the best places for the ads because consumers interested in renewable energy may likely read these types of magazines. Methods other than paid advertising could be a brochure of company products and an introduction into renewable energy, conferences that deal with the topic of renewable energy and the idea of dealer incentives if a consumer changes brands of wind turbine to those produced by TurbodynamX. Word of mouth can also be used for promotion of the company, and this would be stimulated from satisfied users of TurbodynamX brand wind turbines. Another idea for company promotion would be to have the company name or website painted somewhere on the turbine itself, in order to introduce viewers of the turbine to the company. TurbodynamX could be painted on the fairing surrounding the blades, since the fairing remains still while the unit is in operation. TurbodynamX would also like to obtain contracts with larger institutions such as universities, hospitals, or cities in order to get the product out into the market. They could also include a discount on the purchase of the turbines, for a large quantity purchased. TurbodynamX would also put in place a system that would contact customers on a timely basis, to question them about their wind turbine. This contact would be done to see how the turbine is working, to find out if there are any problems, and to see if the customer is satisfied. This will help to promote a strong interest in customer service and satisfaction.

Pricing

The price of the TurbodynamX consumer wind turbine is set at $60,000. However, this price can go down with state tax incentives, net metering, rebates, and state grants, which are listed below for Illinois, Michigan, and Wisconsin. This price is higher than the main competitors of TurbodynamX, but this is due to many factors. The TurbodynamX wind turbine uses different technology which produces more power for a given rotor diameter. The wind turbine is also claimed to be a more efficient, higher quality, and longer lasting turbine compared to those of competitors. The material cost is also higher due to the use of composite materials. Although the price of the TurbodynamX turbine is higher that that of competitors, due to consumer interests it is believed that this will not have a great effect on consumers. Consumers of wind turbines would be interested in a product that is of high quality and has a long lifetime. The customer service provided by the company that produces the turbine would also be important to the customer. TurbodynamX believes that they produce the highest quality and longest lasting wind turbine on the market. TurbodynamX would also like to have a service team that would visit customers to provide maintenance for the turbines, and they would fix any problems encountered by the owner. Due to the cost of the turbine, TurbodynamX would like to use a finance company to handle the customer payments for the turbine.

State of Illinois Wind Energy Incentives

The state of Illinois has a property tax provision for renewable energy systems, which allows the wind energy system to be valued at no more than a conventional energy system. This tax assessment applies to industrial, commercial, and residential areas.

Commonwealth Edison created a billing experiment in 2000 for net metering of wind energy systems that generate 40 kW or less. This net metering program is available to all customers, but the total enrolled is limited by a generating capacity, which cannot exceed 0.1 % of the peak demand of the utility. Any excess generation will be purchased by the utility at the avoided cost for energy.

There are also rebates and buy downs available for wind energy projects. These funds can be granted for a wind project that is larger than 10kW, up to sixty percent of the project cost up to a maximum amount of $300,000. Associations, individuals, private businesses, public and private schools, colleges and universities, non-profit organizations, and units of state and local government are eligible for these rebates. Any recipients must be located within the service area of an investor owned or municipal gas or electric utility.

State grants are available for funding of capital projects of renewable energy technology, including wind. These grants range in value from $60,000 to $1 million, and the current value per year is about $5 million. However, these grants are not available for residential projects.

There has been an Illinois Clean Energy Community Foundation set up, which is a one time $250 million foundation. This was set up in 1999 from ComEd selling off its coal power plants. A portion of these funds goes to clean coal technology and development, a portion to efficiency, renewable energy, and environmental projects.

The City of Chicago also has a $100 million fund for projects that benefit the environment.

The Renewable Energy Resources and Efficiency Programs and the Illinois Clean Energy Community Trust may also be used to fund some research and outreach programs.

State of Michigan Wind Energy Incentives

The state of Michigan does not have any state tax incentives to help with the cost of a wind turbine system. However, the state started offering a $3 per watt payment to install a wind turbine system in 2001, up to a maximum payment of $5,000 per applicant. The only problem being that this fund was spent in the first four months and has not been extended. Michigan also does not have and research or outreach programs for wind energy.

State of Wisconsin Wind Energy Incentives

The state of Wisconsin has a property tax incentive for industrial, commercial, and residential taxpayers. They can claim an exemption for any value added by a qualified wind energy system for property taxes.

Limited funding grants are also available under the state’s Renewable Energy Assistance Program. Technical grants of fifty percent of a project up to $15,000 and construction grants of ten to twenty percent of a project up to $75,000 are available. Businesses, municipalities, and non-profit organizations are qualified for these grants.

Low-interest loans are available to homeowners in order to finance wind energy applications on existing one or two family owner-occupied homes.

Wisconsin also offers cash back rewards and state rebates. A fund of $500,000 is in existence in order to offset the costs of installing renewable energy systems. Payments will be made ranging from $200 to $50,000 with a maximum of twenty-five percent of the installed cost. This rebate is decided from a technology and system specific formula. The payments are based on the size of the wind turbine and the estimated annual power generation for the turbine. Those eligible to participate are individuals, businesses, institutions, state, tribal and municipal governments, and non-profit organizations. These funds are given out after the wind turbine system is installed. Anyone involved in a low-interest loan program is not eligible for a rebate.

Any system that generates under 20 kW is available for net metering. The excess generation at the end of a monthly billing period is credited to the customer at the retail rate for renewable energy.

A public benefits fund of $80 million per year was created in 2000 for environmental research, energy efficient programs, and renewable energy.

Proposed Location

TurbodynamX has already decided on a location in Chicago, Illinois. The chosen location may be important to potential customers. Customers will be welcome to visit the place of business in order to purchase a turbine, or for any questions they may have. The building layout will include an office area for these purposes. A visit to the place of business would only be convenient for potential customers who live in the Chicago area. Anyone outside this area would not likely be visiting the business. These customers would most-likely purchase a turbine by phone, fax, or e-mail. Competition is not located within close proximity to TurbodynamX.

Distribution Channels

TurbodynamX will sell its turbines in many ways: by visits from customers to the place of business, over the phone, by fax, or over the web. A website will be set up which displays the products and shows ways to conduct the purchase. TurbodynamX will have salespeople on its staff, which will complete sales of turbines to customers. However, the customer will be responsible for finding a contractor to install the turbine at their location.

Appendix