1) A cost-efficient model for power generation
The model thought out for the Kvoltz business involves much more than simply a choice for low operating cost.
The choice to build small and medium-sized plants stems from the business' focus on small and medium-sized customers, those who have greater difficulty in having the space or financial resources to build their own plants.
In fact, the focus on the small/medium sized company and also on the individual consumer is the road that will lead Kvoltz to its mission, the reason for its existence: the popularization of clean and cheap energy.
But numbers are also important for any business.
The model chosen for the construction of small/medium distributed microgeneration (Micro DG) solar plants, focused on small/medium companies in the shared generation modality, is also the most efficient in terms of cost for the production of solar energy by photovoltaic cells since it requires the least administrative effort to manage this system and represents lower costs with the state's energy utility (in this modality it is the utility that bears the costs of grid improvement and measurement costs).
In addition, this model allows the solar panels to be installed on the roofs of the clients' own small and medium-sized businesses, such as bakeries, small supermarkets, gas stations, farms, etc., further reducing maintenance, surveillance, and cleaning costs.
In addition, this also reduces the investment in the construction of the plants, because it avoids the execution of civil works since the physical structure in which the plates will be mounted is already built (roofs of these establishments).
In fact, the chosen model of Micro DG combined with shared generation is in line with Kvoltz's mission, as it also represents the most cost-efficient model for the business.
To better understand what distributed microgeneration and shared generation means start with the so-called Solar Law, Law 14,300/2022, especially in clauses X and XI of its article 1.
2) A lean administrative structure
A business that starts with a cost-efficient model of energy production could not skid on the administrative cost structure.
Kvoltz is run by a lean and experienced team. Most of the structure has been in place for years and has experience in business management, customer service, and the development and support of IT systems and solutions for the business.
Who is in charge of the administrative structure and management of the business is the cofounder and head of operation, Kleber Selhorst, who has many years of experience through his payment management and digital banking companies.
The choice of having as headquarters the beautiful and pleasant city of João Pessoa, capital of the State of Paraíba, was also motivated by cost reduction and efficiency, since, unlike the large centers in the southeast region of the country, the city provides not only lower cost for the business, but also a more acceptable cost of living for its employees.
In addition, João Pessoa has consolidated itself as a pole of attraction of the technology industry linked to the financial market and cryptocurrencies, with the arrival of important players in these areas.
3) A business made to last
Like any serious and well thought out business, Kvoltz was planned to last forever.
When we complete the first funding cycle through the launch of the Kvoltz token, by the end of October 2022, with the expectation of raising up to R$30 million, we will start the construction of the other plants in the state of Rio Grande do Norte and then in the state of Paraíba.
At that moment, probably (depends on the release of the concessionaire of Potiguar), we will already be producing energy and generating credits in the unit of São José de Mipibu/RN and, therefore, the business of selling energy will also have started.
Our break-even point is only ten plants, i.e., ten plants is the minimum quantity we need to be able to afford all our variable and fixed costs of operating the business. This means that each additional plant, beyond the first ten, is profit for the business.
Our 75 kW (inverter power) plants, operating with up to 112.5 kWp allowed, generate an average of 13 to 14 kWh per month, which is equivalent to a monthly gross average revenue per plant of approximately R$12mil, at the current kWh price.
The commercialization of the credits foresees on average a 20% discount for the purchasers from small and medium-sized companies in the shared generation modality of the consortium. This discount for the client represents a cost for the business. Considering this 20% cost plus the operational costs per plant, which are basically roof rent, maintenance and internet, the monthly gross operational profit per plant is around R$8,500.00.
Finally, due to the chosen business model, resulting in lower credit generation costs with the concessionaires, lower system administration costs, and lower business management costs, we will have a forecasted free cash flow generation of around R$1.7 million per month from the moment all 10 plants in all 26 states are built.
A business built to last forever cannot stagnate at any moment: it is enough for Kvoltz to build 50 plants for it to be possible to meet an annual growth target of building 4 plants with the cash generated by the business itself, without the need to issue more tokens and seek any other type of funding.
That's right, considering the construction cost of each plant is around R$500mil and a reinvestment rate of 60% in the first years, it is enough to build ten plants in just FIVE states for the business itself to perpetuate forever.
That is exactly why the launch of the Kvoltz token, which starts in about two weeks, will take place until we reach the minimum goal of raising R$25 million, because it corresponds to the investment needed to build the ten plants in five states, enabling the perpetuation of the business.
Long live Kvoltz!
Vamo que vamo!
Natal, September 12, 2022.
João Maluf Junior, Cofounder of the Kvoltz business, electronic engineer (ITA), bachelor and master in law (USP), master in economics (FGV - EESP), extensive experience in the financial market since 1997 and crypto investor since 2018.