Solar Thesis Final Final

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CHAPTER - 1

INTRODUCTION

1.1 Background of Air Conditioner

An air conditioner (often referred to as AC) is a home appliance, system, or mechanism

designed to dehumidify and extract heat from an area. The cooling is done using a simple

refrigeration cycle. In construction, a complete system of heating, ventilation and air

conditioning is referred to as "HVAC". Its purpose, in abuilding or an automobile, is to provide

comfort during either hot or cold weather.

Benjamin Franklin and John Hadley (1758) conducted an experiment to explore the principle of

evaporation as a means to rapidly cool an object. Franklin and Hadley confirmed that

evaporation of highly volatile liquids such as alcohol and ether could be used to drive down the

temperature of an object past the freezing point of water. They conducted their experiment with

the bulb of a mercury thermometer as their object and with a bellows used to "quicken" the

evaporation; they lowered the temperature of the thermometer bulb to 7 F (14 C) while the

ambient temperature was 65 F (18 C). Franklin noted that soon after they passed the freezing

point of water (32 F) a thin film of ice formed on the surface of the thermometer's bulb and that

the ice mass was about a quarter inch thick when they stopped the experiment upon reaching

7 F (14 C). Franklin concluded, "From this experiment, one may see the possibility of

freezing a man to death on a warm summer's day".

Michael Faraday (1820) discovered that compressing and liquefying ammonia could chill air

when the liquefied ammonia was allowed to evaporate. John 1842 used compressor technology

to create ice, which he used to cool air for his patients in his hospital in Apalachicola, Florida.

He hoped eventually to use his ice-making machine to regulate the temperature of buildings. He

even envisioned centralized air conditioning that could cool entire cities. Though his prototype

leaked and performed irregularly, Gorrie was granted a patent in 1851 for his ice-making

machine. His hopes for its success vanished soon afterward when his chief financial backer died;

Gorrie did not get the money he needed to develop the machine. Vivian M. Sherlock 1855

blamed the "Ice King", Frederic Tudor, for his failure, suspecting that Tudor had launched a

smear campaign against his invention. Dr. Gorrie died impoverished in 1855 and the idea of air

conditioning faded away for 50 years.
http://en.wikipedia.org/wiki/Home_appliancehttp://en.wikipedia.org/wiki/Systemhttp://en.wikipedia.org/wiki/Mechanism_(technology)http://en.wikipedia.org/wiki/Heathttp://en.wikipedia.org/wiki/Refrigeration_cyclehttp://en.wikipedia.org/wiki/Constructionhttp://en.wikipedia.org/wiki/Ventilation_(architecture)http://en.wikipedia.org/wiki/HVAChttp://en.wikipedia.org/wiki/Buildinghttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Weatherhttp://en.wikipedia.org/wiki/Benjamin_Franklinhttp://en.wikipedia.org/wiki/Michael_Faradayhttp://en.wikipedia.org/wiki/Ammoniahttp://en.wikipedia.org/wiki/Apalachicola,_Floridahttp://en.wikipedia.org/w/index.php?title=Vivian_M._Sherlock&action=edit&redlink=1http://en.wikipedia.org/wiki/Frederic_Tudorhttp://en.wikipedia.org/wiki/Smear_campaignhttp://en.wikipedia.org/wiki/Systemhttp://en.wikipedia.org/wiki/Mechanism_(technology)http://en.wikipedia.org/wiki/Heathttp://en.wikipedia.org/wiki/Refrigeration_cyclehttp://en.wikipedia.org/wiki/Constructionhttp://en.wikipedia.org/wiki/Ventilation_(architecture)http://en.wikipedia.org/wiki/HVAChttp://en.wikipedia.org/wiki/Buildinghttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Weatherhttp://en.wikipedia.org/wiki/Benjamin_Franklinhttp://en.wikipedia.org/wiki/Michael_Faradayhttp://en.wikipedia.org/wiki/Ammoniahttp://en.wikipedia.org/wiki/Apalachicola,_Floridahttp://en.wikipedia.org/w/index.php?title=Vivian_M._Sherlock&action=edit&redlink=1http://en.wikipedia.org/wiki/Frederic_Tudorhttp://en.wikipedia.org/wiki/Smear_campaignhttp://en.wikipedia.org/wiki/Home_appliance


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Willis Carrier(1902) designed to improve manufacturing process control in a printing plant, his

invention controlled not only temperature but also humidity. The low heat and humidity were to

help maintain consistent paper dimensions and ink alignment. Later Carrier's technology was

applied to increase productivity in the workplace, and The Carrier Air Conditioning Company of

America was formed to meet rising demand. Over time air conditioning came to be used to

improve comfort in homes and automobiles. Residential sales expanded dramatically in the

1950s.

Stuart W. Cramer (1906) was exploring ways to add moisture to the air in his textile mill.

Cramer coined the term "air conditioning", using it in a patent claim he filed that year as an

analogue to "water conditioning", then a well-known process for making textiles easier to

process. He combined moisture with ventilation to "condition" and changes the air in the

factories, controlling the humidity so necessary in textile plants. Willis Carrier adopted the termand incorporated it into the name of his company. This evaporation of water in air, to provide a

cooling effect, is now known as evaporative cooling.

The increase in use of air conditioning over the years has been implicated as a contributor to

increasing obesity, because appetite naturally decreases in uncomfortably high temperatures.

1.2 Home Air Conditioning around the World

Domestic air conditioning is most prevalent and ubiquitous in developed Asian and Middle

Eastern nations and territories. This especially applies to capitals and urbanized areas where most

of the population lives in small high-rise flats. In these areas, with high summer temperatures

and a somewhat high standard of living, air conditioning is considered a necessity and not a

luxury. Japanese-made domestic air conditioners are usually window or split types, the latter

being more modern and expensive. In Israel, virtually all residential systems are split types. In

the United States of America, home air conditioning is most prevalent in the South/Southwest

and on the East Coast. Central air systems are most common in the United States of America,

and are virtually standard most of times in all new dwellings in most states.

In Canada, home air conditioning is less common than in East Asia and the United States, but it

still quite prevalent. This is especially true of the Great Lakes regions of southern Ontario and

Quebec, where there are especially high humidity levels. While window and split units are

common in these regions, central air systems are the most widespread in Western Canada. Few

Western Canadian homes are built with already-compatible central forced airnatural gas heating

systems, making installing a central air system very simple. The majority of modern urban high-
http://en.wikipedia.org/wiki/Willis_Carrierhttp://en.wikipedia.org/wiki/Temperaturehttp://en.wikipedia.org/wiki/Humidityhttp://en.wikipedia.org/wiki/Carrier_Corporationhttp://en.wikipedia.org/wiki/Carrier_Corporationhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/w/index.php?title=Stuart_W._Cramer&action=edit&redlink=1http://en.wikipedia.org/wiki/Evaporative_coolinghttp://en.wikipedia.org/wiki/Obesityhttp://en.wikipedia.org/wiki/Appetitehttp://en.wikipedia.org/wiki/Developed_countryhttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/High-risehttp://en.wikipedia.org/wiki/Standard_of_livinghttp://en.wikipedia.org/wiki/Luxury_goodhttp://en.wikipedia.org/wiki/Southern_United_Stateshttp://en.wikipedia.org/wiki/Southwestern_United_Stateshttp://en.wikipedia.org/wiki/East_Coast_of_the_United_Stateshttp://en.wikipedia.org/wiki/U.S._statehttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Great_Lakeshttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Western_Canadahttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Willis_Carrierhttp://en.wikipedia.org/wiki/Temperaturehttp://en.wikipedia.org/wiki/Humidityhttp://en.wikipedia.org/wiki/Carrier_Corporationhttp://en.wikipedia.org/wiki/Carrier_Corporationhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/w/index.php?title=Stuart_W._Cramer&action=edit&redlink=1http://en.wikipedia.org/wiki/Evaporative_coolinghttp://en.wikipedia.org/wiki/Obesityhttp://en.wikipedia.org/wiki/Appetitehttp://en.wikipedia.org/wiki/Developed_countryhttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/High-risehttp://en.wikipedia.org/wiki/Standard_of_livinghttp://en.wikipedia.org/wiki/Luxury_goodhttp://en.wikipedia.org/wiki/Southern_United_Stateshttp://en.wikipedia.org/wiki/Southwestern_United_Stateshttp://en.wikipedia.org/wiki/East_Coast_of_the_United_Stateshttp://en.wikipedia.org/wiki/U.S._statehttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Great_Lakeshttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Western_Canadahttp://en.wikipedia.org/wiki/Natural_gas


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rise condominiums built in Canadian cities have air conditioning systems. It is also offered as a

relatively low-cost option on most new built homes. While energy is comparatively very cheap

in Canada, the large size of the average Canadian home and cold winters make heating and

cooling one of the largest household expenses. Canadian summers are uncomfortably hot, but

rarely reach the dangerous temperatures experienced in the United States or Asia. As such, many

Canadians, especially in older homes, simply choose to forgo air conditioning in lieu of simple

fans and evaporative coolers. Aside from the cost, air conditioning is often considered

environmentally unfriendly, even though the majority of household energy in Canada comes

from hydro and nuclear.

In Europe, home air conditioning is generally less common, in part due to higher energy costs

and moderate summer temperatures. Southern European countries such as Greece, on the other

hand, have seen a wide proliferation of home air-conditioning units in recent years. The lack ofair conditioning in residences, residential care homes and medical facilities was identified as a

contributing factor to the estimated 35,000 deaths mostly in Germany, France and Italy.

1.2.1 Air conditioners in Pakistan

Room air conditioner making industry in Pakistan has taken rapid strides during the last few

years. The industry made a modest beginning in 1974, when a state enterprise produced the first

domestic air conditioner. Today 13 companies have the facilities to assemble and manufacture

air conditioners. However, currently, only nine units are in operation. Local production of roomair conditioners increased from 6,754 in 1985-86 to 18,913 in 1990-91, showing an increase of

180 per cent per annum.

____________________________________

Air Conditioning, In Wikipedia, the free encyclopedia. Retrieved from

http://en.wikipedia.org/wiki/Air_conditioning

1.3 Solar Energy

Solar energy is radiant energy that is produced by the sun. Every day the sun radiates, or sendsout, an enormous amount of energy. The sun radiates more energy in one second than people

have used since the beginning of time!

Where does the energy come from that constantly radiate from the sun? It comes from within the

sun itself. Like other stars, the sun is a big ball of gasesmostly hydrogen and helium atoms.

The hydrogen atoms in the suns core combine to form helium and generate energy in a process

called nuclear fusion.
http://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Southern_Europehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Residential_care_homehttp://en.wikipedia.org/wiki/Medical_facilityhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Southern_Europehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Residential_care_homehttp://en.wikipedia.org/wiki/Medical_facilityhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Air_conditioning


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1.3.1 Solar energy history

People have harnessed solar energy for centuries. As early as the 7 th century B.C., people used

simple magnifying glasses to concentrate the light of the sun into beams so hot they would cause

wood to catch fire. More than 100 years ago in France, a scientist used heat from a solar collector

to make steam to drive a steam engine. In the beginning of this century, scientists and engineers

began researching ways to use solar energy in earnest. One important development was a

remarkably efficient solar boiler invented by Charles Greeley Abbott, an American

astrophysicist, in 1936.

The solar water heater gained popularity at this time in Florida, California, and the Southwest.

The industry started in the early 1920s and was in full swing just before World War II. This

growth lasted until the mid- 1950s when low-cost natural gas became the primary fuel for

heating American homes. The public and world governments remained largely indifferent to the

possibilities of solar energy until the oil shortages of the 1970s. Today, people use solar energy

to heat buildings and water and to generate electricity.

Edmund Becquerel (1838) observed and published findings about the nature of materials to turn

light into energy. They were considered interesting, but were not pursued.

______________________________________________

Secondary Energy Info book, National Energy Education Development Project, Retrieved fromhttp://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdf

Auguste Mouchout (1860), was the first man to patent a design for a motor running on solar

energy. Receiving funds from the French monarch, he designed a device that turned solar energy

into mechanical steam power and soon operated the first steam engine. He later connected the

steam engine to a refrigeration device, illustrating that the suns rays can be utilized to make ice!

He was awarded a medal for this.

His groundbreaking research was cut short though. The French renegotiated a cheaper deal with

England for the supply of coal and improved their transportation system for the delivery thereof.

Mouchouts work towards finding an alternative was no longer considered a priority and he no

longer received any funding from the monarch.


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Willoughby Smith (1873), experimented with the use of selenium solar cells after discovering

its sensitivity to light while testing material for underwater telegraph cables.

William Adams (1876-1878), wrote the first book about Solar Energy called: A Substitute for

Fuel in Tropical Countries. Him and his student Richard Day, experimented with the use of

mirrors and was able to power a 2.5 horsepower steam engine. Much bigger than the Mouchout's

0.5 horse powered steam engine. His design, known as the Power Tower concept, is still in use

today.

Charles Fritz (1833), turned the sun's rays into electricity. His solar cell had a conversion rate of

only 1-2%.Another big milestone for solar energy history!

Charles Tellier (1885-1889), who is seen as the father of refrigeration, experimented with a non-

concentrating/ non-reflecting solar motor. He installed the first solar energy system for heating

household water on top of his very own roof. However, his desire to pursue his refrigeration

interests led to his abandonment of solar energy experiments.

Aubrey Eneas (1892-1905), formed the first Solar Energy company - The Solar Motor Co. They

sold the first Solar Energy system to Dr. A.J. Chandler of Mesa, Ariz for $2,160. It was

destroyed less than a week later by a windstorm. They sold a second one to John May, but that

one too, was destroyed by a hailstorm shortly afterwards. This led to the company's downfall.

Henry Willsie (1904) recognized the need to store generated power and built 2 huge plants in

California. He was the first to successfully use power at night after generating it during the day.

Even so, he was not able to make a sale and his company too folded.

Frank Shuman's company (1906-1914) , Sun Power Co, built the largest and most cost-effective

solar energy system covering 10,000 square feet plus. Although it produced a lot of steam it did

not produce enough pressure. Together with E.P. Haines he then formed Sun Power Co. Ltd.

They built an irrigation plant just outside of Cairo, but unfortunately it was destroyed during the

Great War.

Calvin Fuller, Gerald Pearson and Daryl Chaplin of Bell Laboratories (1954) accidentally

discovered the use of silicon as a semi-conductor, which led to the construction of a solar panel

with an efficiency rate of 6%.

The first commercial solar cell was made in 1956 available to the public at a very expensive

$300 per watt. It was now being used in radios and toys.


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During the 1950s-1960s space programs employed solar technologies. In 1958 the Vanguard I

was launched. The first satellite that used solar energy to generate electricity.

The Energy Crisis! .A bit of solar energy history we are all familiar with. Suddenly it became

important to find an alternative form of energy in 1970 as we realized just how reliant we really

are on non-renewable, finite resources like coal, oil and gas for our existence. Solar energy

history was made as the price of solar cells dropped dramatically to about $20 per watt.

A Los Angeles based company called Luz Co (1980-1991), produced 95% of the world's solar-

based electricity. They were forced to shut their doors after investors withdrew from the project

as the price of non-renewable fossil fuels declined and the future of state and federal incentives

were not likely.

_________________________________________

Solar Energy History. Retrieved fromhttp://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdf

The chairman of the board said it best: "The failure of the world's largest solar electric company

was not due to technological or business judgment failures but rather to failures of government

regulatory bodies to recognize the economic and environmental benefits of solar thermal

generating plants."

1.4 Statement of ProblemElectricity generation in Pakistan has shrunk by 50% in recent years due to an overreliance on

hydroelectric power. In 2008, availability of power in Pakistan falls short of the population's

needs by 15% Pakistan was hit by its worst power crisis in 2007, after the assassination of

Benazir Bhutto and the following riots. Production fell by 6000 Megawatts and massive

blackouts followed suit. The blame was laid on the then president, Pervez Musharraf, and was in

his defeat. Load Shedding and power blackouts have become severe in Pakistan in recent years.

The main problem with Pakistan's poor power generation is raising political instability, together

with rising demands for power and lack of efficiency.

In this fast world in order to survive it is very important for everyone to go for solar energy. The

huge change in the world and economy including energy crisis recession is very rapid. The

energy crisis in Pakistan and the severe condition of electric shortage has leaded us to situation

of disaster.
http://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdfhttp://en.wikipedia.org/wiki/Benazir_Bhuttohttp://en.wikipedia.org/wiki/Pervez_Musharrafhttp://en.wikipedia.org/wiki/Rolling_blackouthttp://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdfhttp://en.wikipedia.org/wiki/Benazir_Bhuttohttp://en.wikipedia.org/wiki/Pervez_Musharrafhttp://en.wikipedia.org/wiki/Rolling_blackout


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The purpose of this study is to find out whether acceptance of solar energy and solar air

conditioner can be adapted in the lifestyle of Pakistani people or not. There have been many

improvements and revolutionary enhancements in other categories of products but comparatively

solar market has not seen any big change since many years in Pakistan.

The air-conditioning industry is also very important for a country like other industries of the

world. The air-condition business is very much in other countries, now in last four to six years

this industry is also become very common in Pakistan as well. The air-conditioning market is

totally captured by the China and Malaysia, and we import most of air-conditioning brands from

these countries & we pay extra duties for importing these equipment. Air-conditioning

equipment are split A/C, Chillers, Air Handing Units, Fan Coil Units, Valves, Pumps, Building

Management Systems, Cooling Towers and Fans etc. these items are used in central Air-

conditioning systems in commercial projects. We do not have enough local brands in the air-conditioning field. This is the reasons the prices of the air-conditioning equipment has increased

very much. The present situation is the recession situation and almost every country suffers in

this problem. Almost every industry of all the country is affected by this recession period. Air-

conditioning industry is also very affected from this recession period. The prices of air-

conditioning equipment are also raise due to the inflation in dollar prices. Therefore the air-

conditioning industry is very affected and firms started to downsizing. The recent example of

this is the L.G firm from Pakistan cut of its size and kick off 400 hundreds employees. In

addition the so many projects in government, semi-government & private sector have stopped or

slowed. Same situation in all the countries of the world. In 2008 almost three to four times prices

of air-condition equipment revised. The other reasons also behind in this price fraction e.g. duty

& tax on imported items is also raised in Pakistan. Due to that so many international brands are

less marketed than local brands. People switch over on other alternatives.

1.5 Objectives

The objectives of the study are as follow:

To study whether solar air conditioners are accepted in the market.

Finding out the main problem of costumers and deriving a solution regarding prices and

availability.

Study the factors affecting the acceptability of solar air conditioners in the market.

1.6 Hypothesis


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Ho1: Acceptance of solar air conditioners is ignored due to its knowledge to costumers.

H11: Solar Air conditioners will be accepted due to the knowledge of costumers.

Ho2: There is a significant relationship between acceptance and risk taking.

H12: There is no significant relation between acceptance and risk taking.

H03: There is no significant relation between acceptance and price.

______________________________

Electricity Sector in Pakistan. In Wikipedia, the free encyclopedia. Retrieved fromhttp://en.wikipedia.org/wiki/Electricity_sector_in_Pakistan

H13: There is a significant relation between acceptance and price.

1.6.1 Defining the variables

You won't be able to do very much in research unless you know how to talk about variables. A

variable is any entity that can take on different values.

1.6.1.1 Dependent variable

The dependent variable in the study is the acceptance of the product.

1.6.1.2 Independent variables

The following are the independent variables:

Knowledge of the customer.

Price.

Risk taking.

1.7 Theoretical Framework

A theoretical framework is a collection of interrelated concepts, like a theory but not necessarily

so well worked-out. A theoretical framework guides your research, determining what things you

will measure, and what statistical relationships you will look for.

Surprisingly, theoretical frameworks are also important in exploratory studies, where you really

don't know much about what is going on, and are trying to learn more. There are two reasons

why theoretical frameworks are important here.
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It is very important to study the independent variables and its relation to the dependent variable

as the study is about the factors affecting the acceptability of solar air conditioners in the market.

1.7.1 Knowledge of the customer

Knowledge of the costumer is the most important factor for the acceptability of the solar airconditioner in market. This relates to any segment and product in market, if the costumer doesnt

has any knowledge of the product he or she may not buy it. Knowledge about the product or

technology gives confidence and courage to make a decision for the product. This factor will be

further discussed in chapter 4 in the form of questionnaire in which respondents were asked

about the knowledge of solar technology. Product Knowledge comes in various forms. Product's

features for its intended purpose, what goes with what, and how a product works.

Many companies do have knowledge of their customers, but difficult to share or analyze and

often it is incomplete. Moreover knowledge of the product allows the costumer to bargain and

select the best according to its desire. You can justify your selection according to the knowledge

you have about the product and the need you have.

1.7.2 Price

Price is an important factor in the acceptability of a new product in market. Nowadays we see

new products launching in market with huge amount of retail prices which somehow is now

affordable to many consumers who are also willing to buy it.

In this period of recession and downsizing costumers make it very clear and be careful on what

they are buying and why they are buying. In order to penetrate in the market price should be less

but to that extent in which the production and promotion are catered.

For this reason a questionnaire was distributed among 120 respondents to know their preferences

over the buying decision. For that their monthly income according to their buying decision were

taken and plotted on a graph which can help in understanding the buying or decision making

factor according to the monthly income they have. This research is further discussed in chapter 4.

1.7.3 Risk taking

Risk concerns the deviation of one or more results of one or more future events from theirexpected value.

Technically, the value of those results may be positive or negative. In studying decision making, it is

critical to examine both the processes by which decision alternatives are identified, evaluated, and

managed, and the actual selecting mechanism that leads to the decision choice.
http://en.wikipedia.org/wiki/Resulthttp://en.wikipedia.org/wiki/Event_(probability_theory)http://en.wikipedia.org/wiki/Expected_valuehttp://en.wikipedia.org/wiki/Resulthttp://en.wikipedia.org/wiki/Event_(probability_theory)http://en.wikipedia.org/wiki/Expected_value


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The biggest risk a person takes is that he trusts that the product would satisfy his needs in proportion to

the amount of money he pays for the product. There are other risks such as not knowing the range of

products available, not knowing about substitutes, the opportunity cost of buying this product could be

greater than buying something else thats required to a greater extent. Even the buying situation differs.

Each time the buyer is to take a purchase decision, it may or may not be the same as the previous one.

According to the defined independent variables and dependent variable following theoretical

framework has been developed which include the relation between price, knowledge of

customer, innovation of product and risk taking of the customer with the acceptance of the

product as shown in the figure (1.1).

Fig 1.1: Theoretical Framework

1.7.4 Classification of study

This study is inductive as its purpose is to find out the rate of acceptance in relation to the

innovation of a product as well as finding out the key terms which would help in making a strong

and successful marketing plan for the launch of this product.

Whether the costumers accept the solar air conditioners in market. And if they dont then what

will be the main reason of ignoring an innovative item in market having beneficial characteristics

for the future.

1.7.5 Explanation of the established relation with the variables

The increased use of the air conditioners will affect the electricity supply in the country

because it is very difficult to control the production process in the country.

If the income levels of the people are high then the people will buy luxury items or those

who can afford them.

Price

Knowledge of CostumersACCEPTANCEACCEPTANCE

Risk Taking of Costumers


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The worse scenario of the electricity problem in Pakistan can be a key way to launch

solar air conditioners.

There can be problems regarding the acceptance of innovation.

Lack of complete information of the product can also be a problem to its penetration inmarket.

Some people are not risk takers and they tend to see if the product is a success in market

or try to make their buying decision on the basis of word of mouth and popularity of the

product.

CHAPTER 2

LITERATURE REVIEW2.1 Introduction to Load Shedding Problem in Pakistan

Electricity in Pakistan is generated, transmitted, distributed and retail supplied by two vertically

integrated public sector utilities: Water and Power Development Authority (WAPDA) for all of

Pakistan (except Karachi), and the Karachi Electric Supply Corporation (KESC) for the City of

Karachi and its surrounding areas. There are around 16 independent power producers that

contribute significantly in electricity generation in Pakistan.
http://en.wikipedia.org/wiki/Water_and_Power_Development_Authorityhttp://en.wikipedia.org/wiki/Karachihttp://en.wikipedia.org/wiki/Karachi_Electric_Supply_Corporationhttp://en.wikipedia.org/wiki/Water_and_Power_Development_Authorityhttp://en.wikipedia.org/wiki/Karachihttp://en.wikipedia.org/wiki/Karachi_Electric_Supply_Corporation


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For years, the matter of balancing Pakistan's supply against the demand for electricity has

remained a largely unresolved matter. Pakistan faces a significant challenge in revamping its

network responsible for the supply of electricity.

Electricity generation in Pakistan has shrunk by 50% in recent years due to an overreliance on

hydroelectric power. In 2008, availability of power in Pakistan falls short of the population's

needs by 15% Pakistan was hit by its worst power crisis in 2007, after the assassination of

Benazir Bhutto and the following riots. Production fell by 6000 Megawatts and massive

blackouts followed suit. The blame was laid on the then president, Pervez Musharraf, and was

instrumental in his defeat. Load Shedding (deliberate blackouts) and power blackouts have

become severe in Pakistan in recent years. The main problem with Pakistan's poor power

generation is raising political instability, together with rising demands for power.

Table 2.1

Supply and Demand of Electricity in Pakistan

Source: Private Power and Infrastructure Board - Govt. of Pakistan

Note: All values in the table are in MW (Mega Watt).

In table (2.1) the short run addressing difficult challenges such as the demand for a parity of

treatment to both domestic and foreign investors must make some difference by way of attracting

investors across the board. Given the growing demand for electricity, foreign investors musthave a role in helping Pakistan meet this challenge.

But the challenges faced by Pakistan are by no means easy. It is indeed the case that the business

of reforming the electricity supply network is just not about short term and often incomplete

measures of the kind that Pakistanis have been accustomed to.

Even if Pakistan successfully set aside the vast funds which are necessary to finance such a turn-

around, the time taken to ensure the supply of all the technical ingredients must in itself make the

Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Existing Generation 15903 15903 15903 15903 15903 15903 15903 15903 15903 15903 15903 15903 15903

Proposal committed

generation

530 4235 7226 10115 10556 13307 13520 14607 16134 18448 18448 18448 18448

Total

Existing/Committed

Generation

16484 20138 23129 26018 26459 29210 29423 30510 32037 34351 34351 34351 34351

Expected Available

Generation

13146 16110 18503 20814 21167 23368 23538 24408 25630 27481 27481 27481 27481

Demand 16484 17868 19352 20874 22460 24162 25919 28029 30223 35504 34918 37907 41132

Surplus/deficit

Generation

-3338 -1758 -849 -60 -1293 -758 -2381 -3621 -4593 -8023 -7437 -

10426

-

13651
http://en.wikipedia.org/wiki/Benazir_Bhuttohttp://en.wikipedia.org/wiki/Pervez_Musharrafhttp://en.wikipedia.org/wiki/Rolling_blackouthttp://en.wikipedia.org/wiki/Benazir_Bhuttohttp://en.wikipedia.org/wiki/Pervez_Musharrafhttp://en.wikipedia.org/wiki/Rolling_blackout


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task formidably challenging. In the environment which prevails across the world today, there is

already a considerable line-up of both individuals and countries which have placed orders to buy

new equipment. Indeed, Pakistani officials are all too aware of international market conditions

which only add to the difficulty surrounding their task.

Though sorting out global market conditions are just not in reach of one country alone, other

matters are indeed within Pakistan's grasp. These include the need to turn around popular habits

which hardly help to curtail the usage of electricity, with wastages and deliberate inefficiencies

being the principal factors.

_________________________________________

Supply and Demand Proposition 2008-2020. Retrieved from http://www.ppib.gov.pk/SupplyDemand.html\

Electricity Sector in Pakistan. In Wikipedia free encyclopedia. Retrieved fromhttp://en.wikipedia.org/wiki/Electricity_sector_in_Pakistan

2.1.1 Electricity - consumption: 72.2 billion KWH (2007 EST.)

Fig 2.1: Electricity Consumption
http://www.ppib.gov.pk/SupplyDemand.html/http://en.wikipedia.org/wiki/Electricity_sector_in_Pakistanhttp://www.ppib.gov.pk/SupplyDemand.html/http://en.wikipedia.org/wiki/Electricity_sector_in_Pakistan


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The above figure (2.1) consists of the total electricity consumed in the previous years with its

date of information including the percentage changes occurred in the past years.

Table 2.2

Electricity Consumption

Years Electricity- Consumption Rank Percent Change Date of Info

2003 62,270,000,000 34 2001

2004 62,270,000,000 35 0.00% 2001

2005 52,660,000,000 39 -15.43% 2003

2006 71,540,000,000 34 35.85% 2003

2007 74,540,000,000 33 4.31% 2004

2008 68,400,000,000 34 -8.34% 2006est.

2009 64,400,000,000 34 0.00% 2007est.

2010 72,200,000,000 36 5.56% 2007 est.

Table (2.2) is the tabular form of the figure (2.1) which shows the estimated electricity

consumption in KWH.

__________________________________________

CIA World Fact book- February 19, 2010. Retrieved from

http://www.indexmundi.com/pakistan/electricity_consumption.html

2.1.2 Electricity - production: 90.8 billion KWH (2007 EST.)
https://www.cia.gov/library/publications/the-world-factbook/fields/2042.htmlhttp://www.indexmundi.com/pakistan/electricity_consumption.htmlhttps://www.cia.gov/library/publications/the-world-factbook/fields/2042.htmlhttp://www.indexmundi.com/pakistan/electricity_consumption.html


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Fig 2.2: Electricity Production

The above figure (2.2) shows the electricity production done in the previous years including its

percentage changes and ranking in the world.

Table 2.3Electricity Production

Years Electricity- Production Rank Percent Change Date of Info

2003 66,960,000,000 36 2001

2004 66,960,000,000 37 0.00% 2001

2005 75,270,000,000 33 12.41% 2003

2006 76,920,000,000 35 2.19% 2003

2007 80,240,000,000 32 4.32% 2004

2008 93,260,000,000 32 16.23% 2007est.

2009 93,260,000,000 32 0.00% 2007est.

2010 90,800,000,000 32 -2.64% 2007 est.

Table (2.3) is the tabular from of the above figure (2.2) which shows the estimated electricityproduction in KWH.

______________________________________


http://www.indexmundi.com/pakistan/electricity_production.html

2.2 Total Installed Capacity

Total installed generation capacity witnessed an increase of 2.1 percent during 200910 against

the 1.0 percent growth in corresponding period last year with the share of 31.6 percent in total

installed capacity during 200910, private sector witnessed the prominent growth of 7.1 percent

in its installed capacity during the period under review. On the other hand, installed capacity of

WAPDA declined by 0.5 percent during JulyMarch 200910. Furthermore, the installed

capacity of KESC stood at 1,955 MW during the period under review.

Table 2.4

Total Installed Capacity

S.NO Power Company Installed

capacity

Share (%) Installed

capacity

2009-10

Share (%) Change

1 WAPDA 11,454 57.9 11,399 5605 -0.5Hydel 6,555 57.2 6,555 57.5 0.0

Thermal 4,899 42.8 4,844 42.5 -1.1
https://www.cia.gov/library/publications/the-world-factbook/fields/2038.htmlhttp://www.indexmundi.com/pakistan/electricity_production.htmlhttps://www.cia.gov/library/publications/the-world-factbook/fields/2038.htmlhttp://www.indexmundi.com/pakistan/electricity_production.html


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2 IPPs 5,954 30.1 6,374 31.6 7.13 Nuclear 462 2.3 462 2.3 0.04 KESC 1,910.0 9.7 1,955 9.7 2.4

Total 19,780 100.0 20,190 100.0 2.1

Source: Hydrocarbon Development Institute of Pakistan & PEPCO

In further part of the report we will study the solar energy system, its types and how it is is madeincluding the solar air conditioner which we will design for the Pakistan market.

2.3 Solar Energy System

Solar power or Solar Energy is the energy we derive form from rays and heat of sun. It is in

use from the time immemorial. However it is now that mankind has realized its importance as a

safe and inexpensive energy source.

Pakistan has high potential of renewable energy sources. A very large part of the rural

Population does not have the facility of electricity because they are either too remote or it is

found too expensive to connect their villages to the national grid station. Pakistan being in the

sunny belt is ideally located to take advantage of solar energy. This energy sources is widely

distributed and abundantly available in the country. During last 15 years Pakistan has shown

quite encouraging progress in the use of photovoltaic cells. Currently electrical power derived

from solar energy is being used is being used in some public parks. These include Khalid bin

Waleed Park in Peshawar and the Race Course Park in Rawalpindi. The Public Health

department has installed solar water pump for drinking purposes in some parts of the country.

Both public and private sector are playing their role.

2.4 Governments Role

The Pakistan Electric Power Company (PEPCO) has sought a 48 percent increase in power tariff

to bridge the Rs 180-billion gap in power production costs and the money paid by utility

consumers, official sources told Daily Times on Tuesday.

This demand has put the economic managers in a difficult position. They are exploring all

possible options, including tariff restructuring through elimination of subsidies, to bridge the gap

in power production costs and tariff recovery. Other options to overcome the 48-percent deficit

include introduction of major reforms to eliminate line losses, electricity theft and inefficiency in

the system through investment to upgrade obsolete equipment.

However, the economic managers strongly feel that a mix of reforms, such as partial increase in

power tariff, reduction in all kinds of losses and elimination of subsidies can help reduce the Rs

180-billion gap. The government believes that it is extremely difficult to consider any increase

in electricity prices, even though there is immense pressure to eliminate subsidies.


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The sources said that government officials would try to convince the International Monetary

Fund (IMF) that any increase in power tariff in these circumstances is not possible.

Technical discussions with the IMF are currently underway in Washington for the extension of

the deadline to meet these conditions.

_____________________________________

Pepco wants 48% Hike in Tariff Prices. September 01, 2010.Retrieved from

http://www.dailytimes.com.pk/default.asp?page=2010\09\01\story_1-9-2010_pg7_28

CHAPTER-3

RESEARCH METHODOLOGY

3.1 Research Design

A primary interpretation of design research is that it is concerned with undertaking research intothe design process. Secondary interpretations would refer to undertaking research within the

process of design. The overall intention is to better understand and to improve the design

The objective of this study is to find out whether Acceptance of a product by customer has any

significant relationship with the knowledge of costumer, its personal status, the decision making

power etc.

This study will eventually help us to find out the key elements that can help us make a strong

marketing plan to launch solar air conditioners in Pakistan and make it a consumer product and

available for everyone.

3.2 Population of the Study

3.2.1 Population


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In present study, the population is general public who uses air conditioners in summers and the

buying is at its peak in summers due to new house development and according to their needs and

wants. Our sample population for the project included include Model Town, DHA, Gulberg,

Shadman and Township. A questionnaire was developed which was costumer based and filled

from different locations in Lahore. There were a number of 120 questionnaires that were filled

by the respondents themselves.

3.3 Sampling Strategy

Keeping in view, the type and nature of study I selected Random sampling. Therefore, 120

people are forming the sample of my study. Questionnaire was costumer based because it is well

said that costumer is always right. My focus was totally on costumers because this is the only

source of information from which we can know what they want. If the customer wants its retailerautomatically pursue it because innovation is always done to resolve the current issues faced by

the users of a product by improving it in all those aspects.

3.3.1 Variables

A variable is anything that can be changed or it is a quantity that may have number of different

values.

The research is focused on the variable

1. Dependent Variable

Acceptance of the Product.

2. Independent Variable

Knowledge of costumers

Risk taking

Price

3.4 Tools for Data Collection

The success of a researcher depends on the data he has collected. The collection of accurate data

depends upon the careful construction of a tool for data collection. For this particular study it is

considered appropriate to use questionnaire.

3.4.1 Pretesting


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Pre-testing for the present study was done having almost similar qualities as to which were to be

studied later. After pre-testing some changes were made on the basis of responses. There were

some questions that didnt work. Researcher modified the questions; some new questions were

also added and then gave the schedule final shape. The language of the questions was on the

level of understanding of respondents.

3.5 Data Collection

3.5.1 Classification of data

Classification of data refers to questions about demographics of respondents including

information as age, education level, marital status and income.

My questionnaire included Age, Gender and Monthly Income, Educational Qualificationquestions which were asked in the beginning of the questionnaire.

I developed questionnaires for Customer and personally administered to 120 Customers. First of

all I introduced myself and significance of the innovative product that is about to be launched. I

also explained the purpose of the study and it took me 10 minutes on average to complete one

questionnaire.

3.5.2 Variables and measures

The questionnaire consisted of 15 questions. First five questions tapped personal information .

Next five questions were multiple choices regarding their frequency of using the product and

modes of advertisement that are most influential according to them. Remaining questions

focused on preference and acceptability of the Product.

3.6 Interpretation of Data

After survey of the Air conditioner markets and fulfillment of questionnaire by customers, Data

is analyzed. In this study bar charts and tables are used for statistical analysis.


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CHAPTER - 4

DATA ANALYSIS

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the

goal of highlighting useful information, suggesting conclusions, and supporting decision making.

Data analysis has multiple facets and approaches, encompassing diverse techniques under a

variety of names, in different business, science, and social science domains.

This study is particularly about the launch of an innovative product and its rate of acceptance by

the customers. By conducting this research we would be able to map out the best Marketing Plan

possible to launch this product.

I made questionnaires to carry out this research which was costumer based and for analyzing the

data I am using Tables and Bar Charts.

4.1 Costumer Data Analysis

This data consists of general information about the sample by which one can analyze the effects

of other variable on the acceptance of this product. The brief study of the research findings of the

sample includes Gender, Age, Monthly Income, For the fulfillment of these questionnaires,

researcher went to many places present in Lahore. No, particular group was selected to fill out

these questionnaires all the questions were answered by random respondents.

4.1.1 Respondents profile


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The respondents profile was basically the personal information of the respondent which

included the age group, marital status, their income per month, educational qualification etc.

Table 4.1

Gender Group

Gender Frequency Percent

Male98 81.66

Female22 18.33

Total120 99.99

The above table shows the gender distribution of the respondents which is approx 81 % male

and 18% female .Females and at a working level was hard to locate and fill question still the best

was done to approach them and include a working woman in the sample to know the acceptance

of solar air conditioners in market. A graphic representation of the above table is as follow:

Fig 4.1: Gender Group

The above figure shows maximum value in male which is 81.66%.

Table 4.2

Age Group


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Age Group Frequency Percent

Less than 18 Years0 0

18-24 Years 30 25

25-31 Years 78 65

32-45 Years 12 10Total 120 100

The above table indicates the age group of the respondents in frequencies and percentages 18 to

24 years of respondents were 25%, 25 to 31 age of respondents were of 65% and 32 to 45 year

of respondents were of 10 percent.

Fig 4.2: Age Group

Above figure shows the age group and maximum results were in the years from 25 to 31 having

65% responses.

Table 4.3

Educational Qualification

Education Frequency Percent

Intermediate 0 0

Undergraduate 2 1.66

Graduate 76 63.33

Post Graduate 42 35

Total 120 99.99

The above table (4.3) is regarding the educational qualification of the respondents which was

necessary to see according to their qualification and their income per month what is their

decision power, what is their acceptance to innovation. 1.66% was gathered to be under graduate,

63.66 % of the respondents were graduate and found to be having a job life and some were doing

their own business, while post graduate were 35%. The questionnaire was distributed among

literate and educationally qualified a respondent which was necessary because such people have

chances of accepting and adapting innovation which is the exact target.


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Fig 4.3: Educational Qualification

The above figure 4.3 shows the educational qualification and 63% in graduate.

Table 4.4

Marital Status

Marital Status Frequency Percent

Single34 28.33

Divorced 0 0Married

6 5

Married with Kids80 66.66

Total120 99.99

Table (4.4) indicates the marital status of the respondent we collected that many of them were

married with kinds and had a percentage of 66.66% which was the highest among the sample

respondents then married respondents were 5% and single respondents were 28.33% which

helped us to understand that married person with kids have a strong buying and responsible

buying power. Their questionnaire was thoroughly evaluated regarding their answers to the

questions of acceptability and consumer behavior which are mentioned in the further end of the

questionnaire evaluation.

Fig 4.4: Marital Status

Table 4.5

Income per Month

Income Per Month Frequency Percent


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Less than 20,000 4 3.33

Rs.20,000 Rs.39,999 67 55.83

Rs.40,000- Rs.59,000 Rs 15 12.5

Rs.60,000-Rs.79,999 19 15.83

Rs.80,000 or more 15 12.5

Total 120 99.99

The above table (4.5) indicates the income per month of the respondent with options distributed

in terms of cash and segmented to know in which section they lie. The frequency section

represents the quantity of the respondents lying in that segment. The percent is the percentage of

the frequencies taken and counted from the questionnaire. This helps to understand the income

per month and the expected saving which is the key answer to the acceptability and risk taking of

the costumer to buy a solar air conditioner.

Fig 4.5: Income per Month

Figure (4.5) represents the income per months of the respondents.

Table 4.6

Availability of Air Conditioners

Table (4.6) indicates the percentage and frequencies of the costumers who have air

conditioners at their place. The question had only two options which were yes or no.

Fig 4.6: Availability of Air Conditioner

Options Frequencies percentsYes 120 100No 0 0

Total 120 100


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The above figure (4.6) is indicating the availability of air conditioners which was a general

question and results were 100% in the section of yes.

Table 4.7

Type of Air Conditioner

Options Frequencies Percents

window 18 15

split 102 85

Total 120 100

Table (4.7) shows the type of air conditioner which the respondents had. There were also a

number of 120 frequencies in which 15% of the sample respondents had window AC and 85% of

the sample had split air conditioners.

Fig 4.7: Type of Air Conditioner

The above figure (4.7) shows the type of air conditioner. There were two options and the

maximum answers were in the favor of split air conditioner having a percentage value of 85%.

Table 4.8

Usage of Air Conditioner in Months

Options Frequencies Percent


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3-5 months 14 11.66

5-7 months 66 55

7-9 months 36 30

More than that 4 3.33

Total 120 100

The table above table (4.8) represents the usage of air conditioners by the respondent in months

in a year. This had the options of months in patches. 11.6% respondents use from 3 to 5 months ,

55% respondents use air conditioners from 5 to 7 months, 30 percent respondents use from 7 to 9

months and 3.33 respondents use more than that . a graphic representation of the table is as

follow.

Fig 4.8: Usage of Air Conditioner in Months

The above figure (4.8) represents the usage of air conditioner monthly in which maximum

answers were in 5 to 7 hours having percentage value of 55% among the options.

Table 4.9

Capacity of Air Conditioner


1 ton 68 56.6

1.5 tons 46 38.33

2 tons 6 5

4 tons 0 0

6 tons 0 0

More than that 0 0

Total 120 100


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Table (4.9) represents the capacity of cooling unit capacities the respondents have in the sample.

56% of the respondents have 1 ton split air conditioners, 38.33 % have 1.5 ton of air conditioner

and 5% of 120 respondents have 2 ton air conditioner. A graphical representation of the above

table is as follow:

Fig 4.9: Capacity of Air Conditioner

Above figure (4.9) shows the capacity of air conditioners having maximum value of 56.6% of 1

ton air conditioner.

Table 4.10

Daily Hourly Usage of Air Conditioners

Options Frequencies Percent1-3 hours 0 0

3-5 hours 19 15.83

5-7 hours 44 36.66

7-9 hours 38 31.66

9-12 hours 16 13.33

more than that 3 2.5Total 120 99.98


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Table (4.10) shows the hourly usage of air conditioner daily which helped us to understand the

importance of the costumer related to air conditioners, which was a very good vacuum to be

filled in the market through solar air conditioners. 15.83 % of the respondents use for 3 to 5

hours , 36.66 % of the respondents use from 5 to 7 hours , 31.66% of the respondents use from 7

to 9 hours , 13.33% of the respondents use from 9 to 12 hours and 2.5% respondents use more

than that daily. A graphic representation of the above table is given below:

Fig 4.10: Daily Hourly Usages of Air Conditioners

The above figure (4.10) shows daily use of air conditioners.

Table 4.11

Knowledge Regarding Solar Energy


Yes 113 94.16

No 7 5.83

Total 120 99.99

The above table was a simple question regarding the knowledge of the solar energy whether

someone knows about solar energy or not. The result came out to be very interesting when the

samples were collected and the frequencies were counted almost 94% of the respondents knew

about the solar energy and almost 6 % of them didnt know about it. A graphic representation of

the table is given below:

Fig 4.11: Knowledge Regarding Solar Energy

The above figure (4.11) shows the knowledge of the costumers about the solar energy which was

unexpectedly very good having 94.16% knowhow of the technology.


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Table 4.12

Acceptance of Solar Air Conditioners

Option Frequencies Percent

Yes 97 80.83

No 23 19.16

Total 120 99.99

The above table (4.11) was again a simple question regarding the acceptance of solar air

conditioners at their place. The results were very good in the favor of the solar air conditioner

system. 80.83% respondents accepted to have a solar air conditioner at their place whereas

almost 20% respondent ignored saying NO.

Fig 4.12: Acceptance of Solar Air Conditioners

The above figure (4.12) represents the preferences of having solar air conditioners. The result

shows 80.8% in the favor of having solar air conditioners by the respondents.

Table 4.13

Regarding Consumer Behavior


yes 97 80.83

No 6 5

May be I'll buy. 17 14.16

Total 120 99.99


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Table (4.13) was a question which was regarding the customer satisfaction and consumer

behavior. It was regarding the after sale services and warranty of the parts.

The accepted percentage remained same which was 80% while the decision of No changed a

slight bit and respondents liked to select the option that May be Ill buy which shows thatrespondents and the sample which we approached did seem to have keen interest in having a

solar air conditioner at their place. The above table helped us to visualize the decision making of

the respondent. A graphic representation of the above scenario is given below:

Fig 4.13: Regarding Consumer Behavior

The above fig (4.13) represents the priority of the respondents buying related to service and

warranty.

Table 4.14

Influential Source of Advertisement

Mode of Advertisement Frequency Percentage

TV 62 51.66

Radio 6 5

Hoardings 30 25

Print 22 18.33

Total 120

The above table (4.14) is a very important key point to evaluate that what source is the most

influenced to the respondent in the form of advertisement. This is also a form of consumer

behavior and marketing scheme. Our questionnaire showed results mostly in TV commercial

which was 51.66% almost 5% of the respondents said that they get influenced by radio as the

narration seems to be appealing, 25 % of the respondents agreed on hoardings and 18% of the

respondents agreed on print media which include brochure news paper or wallpapers etc. A

graphic representation of the above scenario is given below:

Fig 4.14: Influential Source of Advertisement


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Table 4.15

Most Important Factor When Costumers Buys a Product

Factors Frequency Percent

Price 17 14.16Quality 27 22.5

Uniqueness 32 26.66

Guaranty 44 36.66

Total 120 99.99

Table (4.15) represents the decision making of the respondent depending upon their own priority

of characteristics the questionnaire and frequency detail showed that most of them demanded

guaranty of the product in terms of after sale services and warranty which turned out to be 36%,some agreed on the uniqueness which was almost 26 %, quality was of a consideration also of

about 22%, price doesnt seems to be a matter to the respondents which was 14%. This shows

that the respondents or consumers demand uniqueness and mostly guaranty in their product and

price is not that big issue. A graphical representation of the above table is given below:

Fig 4.15: Most Important Factor When Costumers Buys a Product

Figure (4.15) represents the buying decision of the respondent in terms of quality, uniquenessguaranty and price. Every option had average responses.

4.2 Price Analysis

In this section we will study the price of what the solar air conditioner costs and its comparison

with the electricity bill we give against the units consumed by the split air conditioner already

fitted in our homes. Prices or the cost in the form of bills including domestic and commercialusage will be tested. Afterwards we will try to clear our variable of price in relation to the

acceptance of solar air conditioners in our environment. I have gathered much amount of data to

study regarding the cost of a solar air conditioner and the domestic and commercial bill we pay

monthly on average usages.

In order to calculate the units per month , cost per month, GST and then the total cost on very

deep research regarding power energy and mathematics I came to know that the calculations


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were not that difficult. First of all we should know the amperes and watts of the air conditioners

according to their BTU. The calculations are based on both domestic and commercial usage of

air conditioner and then we will evaluate the pricing and analysis of the investment of the solar

air conditioner.

4.2.1 Calculating power in kilo watts

Formula:

A typical formula which we studied in physics in matriculation or in our earlier studies. In order

to calculate wattage of any product we need to know its ampere which it uses and multiply it

with the volts.

Power = Volts * Ampere

P = V I

Where

P = Power

V = Volts

I = Amperes

Power on the left has the unit of watts so on the right side of the equation we have two variables

volts and amperes.

Table 4.16

Calculating Power in Kilo Watts

Note: Kilo watts are calculated by dividing the watts by 1000.

Tons Amperes Volts Watts Kilo watts

/KW

1 6 220 1320 1.32

1.5 10 220 2200 2.2

2 15 220 3300 3.3

1.5 ton window 19 220 4180 4.18


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4.2.2 Calculating units consumed per month

In order to consume units per month we have to calculate units per day. Actually the units

consumed are the watts per hour consumed. E.g. assuming the case of a 1 ton air conditioner it is

1.32 KW. If it is turned on for 6 hours per day it consumes 7.92 units or kilo watt hour (KWH)

per day which is approximately 8 units. And if we want to calculate the same consumption permonth we multiply it with 30 or 31 to know the units consumed per month.

For example:

Watts = 1.32 KW

Hours consumed = 6

Consumption per Day = 1.32 KW * 6 hours

= 7.92 KWH (kilo watt per hour)

= 8 KWH

Consumption per Month= 8 KWH * 31 Days per Month

=248 Units per Months

4.2.3 Calculating cost per month:

As prescribed by PEPCO the tariff varies from units consumed a list of the applied tariff with

effective of October 2010 is mentioned below or the domestic and commercial price.

4.2.4 Domestic tariff plan

Table 4.17

Units Variables Charges Rs/KW

1-100 4.28

100- 300 6.47

300- 700 10.44

700 and above 13.03


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Domestic Tariff Plan

The above table consists of the domestic tariff plan of the electricity bills which we pay.

4.2.5 Commercial tariff plan

Table 4.18

Commercial Tariff Plan

Units Fixed Charges Variable Charges Rs/KW

Sanctioned load up to 5 KW 12.78

Exceeding 5kw 346 7.98

The above table consists of the commercial tariff plans of the electricity bills.

4.2.6 GST applied:

GST is general sales tax which according to the government is 16% of the taxable amount as

mentioned on our utility bills and on websites of PEPC0, LESCO AND KESC. 16% which is

applied on the cost per month we calculated and then added to calculate the total cost.

4.2.7 Total Cost per Month:

Total cost is the sum of the GST and the cost per month we calculated.

4.3 Domestic Unit Consumed

4.3.1 Calculation for 1 ton air conditioner

Table 4.19

Domestic 1 Ton Air Conditioner Costing


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Hours/Day Units/Month Cost/Month GST Total cost

/Month

5 210 1140 182 1322

7 294 1683 270 1952

9 378 2536 406 2942

12 504 3851 616 4467

14 588 4728 757 5485

16 672 5606 897 6503

18 756 6628 1061 7689

4.3.2 Calculation for 1.5 ton air conditioner

Table 4.20

Domestic 1.5 Ton Air Conditioner Costing

Hours/Day Units/Month Cost/Month GST Total cost

/Month

5 341 2150 344 2494

7 477 3570 571 4141

9 613 4990 799 5789

12 818 7435 1190 8625

14 954 9208 1473 10681

16 1091 10993 1759 12752

18 1227 12765 2041 14806


Table 4.21


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Domestic 2 Ton Air Conditioner Costing

4.3.4 Window air conditioner costingTable 4.22

Domestic Window Air Conditioner Costing

4.4 Commercial Unit Consumed


Table 4.23

Commercial 1 Ton Air Conditioner Costing

Hours/Day Units/Month Cost/Month GST Total

cost /Month

Hours/Day Units / Month Cost/Month GST Total Cost

/Month

5 210 2631 421 3052

7 294 3683 590 4273

9 378 4536 725 5261

12 504 6315 1010 7325

14 588 7367 1178 8545

16 672 8420 1347 9767

18 756 9450 1512 10962

Hours/Month Units/Month Cost/Month GST Total

Cost /Month

5 647 5355 857 6212

7 907 8595 1375 9970

9 1166 11969 1915 13884

12 1555 17038 2726 19764

14 1814 20413 3266 23679

16 2073 23788 3806 27594

18 2333 27175 4348 31523


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5 542 4248 680 4928

7 716 6106 977 7083

9 920 8765 1402 10167

12 1227 12765 2042 14807

14 1432 15475 2476 17951

16 1636 18108 2897 21005

18 1841 20743 3318 24061

4.4.2 Calculation for 1.5 ton air conditioner

Table 4.24

Commercial 1.5 Ton Air Conditioner Costing


Table 4.25

Commercial 2 Ton Air Conditioner Costing

Hours/Day Units/Month Cost/Month GST Total

Cost /Month

5 341 4262 682 4944

7 477 5962 954 6916

9 613 7662 1226 8888

12 818 10225 1636 1186114 954 11925 1908 13833

16 1091 13637 2182 15819

18 1227 15337 2453 17790


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4.4.4 Window air conditioner commercial costing

Table 4.26

Commercial Window Air Conditioner Costing

4.5 Solar Ai Conditioner Plan


Cost /Month

5 542 6775 1084 7859

7 716 8950 1432 10382

9 920 11500 1840 13340

12 1227 15337 2454 17791

14 1432 17900 2864 20764

16 1636 20450 3272 23722

18 1841 23012 3682 26694


Cost /Month

5 647 8088 1295 9383

7 907 11338 1814 13152

9 1166 14575 2332 16907

12 1555 19438 3110 22548

14 1814 22675 3628 26303

16 2073 25912 4146 30058

18 2333 29162 4666 33828


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We must know for all the ones who study this report that how does the solar energy system

works. A solar energy system consists of the following items.

4.5.1.1 Solar panels

A solar panel (photovoltaic module orphotovoltaic panel) is a packaged interconnectedassembly ofsolar cells, also known as photovoltaic cells. The solar panel can be used as a

component of a larger photovoltaic system to generate and supply electricity in commercial and

residential applications.

4.5.1.2 Inverter

An inverter is an electrical device that converts direct current (DC) to alternating current (AC);

the converted AC can be at any required voltage and frequency with the use of

appropriate transformers, switching, and control circuits.

4.5.1.3 Charge controller:

A charge controller, charge regulator orbattery regulator limits the rate at which electric

current is added to or drawn from electric batteries.

In addition to these a solar energy system consists of batteries which may be dry or acid also.

The below given diagram can explain the working of a solar energy system.

Fig4.16: How Solar Works

Following the above fig (4.16) we can easily get to know about the energy flow of the system.

The solar energy system flows as the same as if u has an unlimited UPS working. The solar panel

takes sunlight from the sun and produces an electric charge which is controlled by a charge
http://en.wikipedia.org/wiki/Solar_cellhttp://en.wikipedia.org/wiki/Direct_currenthttp://en.wikipedia.org/wiki/Alternating_currenthttp://en.wikipedia.org/wiki/Transformerhttp://en.wikipedia.org/wiki/Electric_currenthttp://en.wikipedia.org/wiki/Electric_currenthttp://en.wikipedia.org/wiki/Battery_(electricity)http://en.wikipedia.org/wiki/Solar_cellhttp://en.wikipedia.org/wiki/Direct_currenthttp://en.wikipedia.org/wiki/Alternating_currenthttp://en.wikipedia.org/wiki/Transformerhttp://en.wikipedia.org/wiki/Electric_currenthttp://en.wikipedia.org/wiki/Electric_currenthttp://en.wikipedia.org/wiki/Battery_(electricity)


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controller and the flow of energy to move towards the charge controller which does not allow

overflowing the charge going towards the batteries. As we must know that the batteries produce

DC (Direct current) current and most of our items in our house are operated on AC (Alternate

Current). For this purpose an inverter is used to invert the DC current to AC current and our

system is ready to be used.

4.5.2 Estimated price for a solar air conditioner

Through sources it was found that a solar air conditioner is primarily a solar energy system in

which you can even use your own air conditioner in the above diagram explained when then DC

is inverted to AC you can plug anything to it .with the advantage of plugging and playing it

unlimitedly having a disconnection from the electricity company.

The estimated price taken from several companies from Lahore, Karachi and Islamabad which

even included the importers. The below given table (4.27) contains the prices:

Table 4.27

Estimated Price of Solar Air Conditioner

Tons Unit Price Solar System Price/Approximately

1 25000/- 400,000/-

1.5 32000/- 600,000/-

2 44000/ 800,000/-

4.5.2.1 Solar panel warranty

The solar panel provided by the companies or retailers give it with a 25 years warranty which

was found all over the world and is the key advantage for a costumer with a complete

satisfaction that a solar panel which is the main backbone of the whole system has a warranty of

not even one, two, ten but twenty five (25) years.

4.5.2.2 Batteries warranty


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The batteries provided by the retailers offer a warranty of one year. Even if we buy a battery

from a retailer separately it comes with a minimum warranty of 8 months.

4.5.2.3 After sale services:

The services provided mainly free maintenance for one year by the companies/retailers which

was confirmed also calling at their costumer services.

4.5.2.4 No technology barrier

Another point to be noted is that if we consider the basic UPS attached at our homes contain the

basic charge controller which controls the charge on the batter not to overcharge them and an

inverter which can be fixed by any electrician.

CHAPTER5

SUMMARY, FINDINGS, LIMITATIONS AND CONCLUSION


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5.1 Summary

The brief summary is that the study was conducted to give a suggestion in the current conditions

or any objective. On deep focus on the current conditions in the market I decided to give the

decision of solar air conditioners in the market of Pakistan. The research turned out to be very

interesting and throughout the findings the conditions of Pakistan were torn out and found to be

very problematic even in the coming years. The Pakistani people related to Punjab Baluchistan

and Sindh are continuous users of air conditioners.

Therefore I feel that solar air conditioners can take a major role in the market and fulfill the

usage of costumers and gain its acceptance.

5.2 Findings

5.2.1 Gaps in current market

After analyzing the data of customers sample, problems identified in the beginning were found

present in the current Pakistani situation of electricity and the rising prices per unit including the

shortage of electricity. The solar energy system in the current market can gain a huge acceptance

and have a great gap to fill in the market.

5.2.1.2 Quality & price

Other useful information was the quality preference of the customers which is a valuable point

for us because quality is the main attribute of our product. Price turned out to be the first most

important factor for customers which was concluded in chapter 4 while calculating the monthly

consumption of electricity bills which we pay at such higher rated including the general sales tax.

Moreover the product comes with a 25 years warranty for the solar panel which proves to be

very good in quality and the maintenance discussed was not a big deal.

5.2.1.3 Target audience

After reviewing the results of this study it is very clear that the customers that would be most

suitable for us to target are those who have monthly income of 26,000 to 50,000. Because such


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costumers will contribute more in their saving and can prefer a onetime investment for their

luxury living.

5.3 Limitation

This study is limited to solar energy and cannot be generalized for all types of products.

5.4 Conclusion

The findings of this study led to the conclusion that the level of acceptance of a product has

significant relationship with the innovation of a product.

The problems found in Pakistan are the shortage and high unit prices of electricity bills which

have a lot of time to be cured.

This study also revealed that customers in Pakistan have high rate of change acceptance. They

are willing to try new and improved products. They have become more knowledgeable and

informative about what their needs are and what they want. It was also found that TV

advertisement is the most influential medium of advertisement which would be helpful for future

innovative product launches.

Therefore we can conclude that solar air conditioners can be accepted in Pakistani market if the

costumer careful understands its advantage and price value at the current situation. Moreover it isa luxury and such items do not need to be taken in a sense to give the invested amount back.

Though solar air conditioners or solar energy systems are a medium of one time investment with

slight maintenance and provide saving for your electricity bills including taxes.

REFERENCES

Air Conditioning, In Wikipedia, the free encyclopedia. Retrieved from

http://en.wikipedia.org/wiki/Air_conditioning
http://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Air_conditioning


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CIA World Fact book- February 19, 2010. Retrieved fromhttp://www.indexmundi.com/pakistan/electricity_production.html


http://www.indexmundi.com/pakistan/electricity_consumption.html

Electricity Sector in Pakistan. In Wikipedia free encyclopedia. Retrieved fromhttp://en.wikipedia.org/wiki/Electricity_sector_in_Pakistan

Pepco wants 48% Hike in Tariff Prices. September 01, 2010.Retrieved fromhttp://www.dailytimes.com.pk/default.asp?page=2010\09\01\story_1-9-2010_pg7_28

Supply and Demand proposition .Retrieved from http://www.ppib.gov.pk/SupplyDemand.html\

Solar Energy History. Retrieved fromhttp://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdf

Secondary Energy Info book, National Energy Education Development Project , Retrieved fromhttp://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdf

APPENDIX - 1

QUESTOIONNAIRE

Notice: Thank You for your participation in the survey. This survey is being

exclusively conducted for the educational purposes, and the information

provided by you would be kept confidential. It will neither be shared with nor
https://www.cia.gov/library/publications/the-world-factbook/fields/2038.htmlhttp://www.indexmundi.com/pakistan/electricity_production.htmlhttps://www.cia.gov/library/publications/the-world-factbook/fields/2042.htmlhttp://www.indexmundi.com/pakistan/electricity_consumption.htmlhttp://en.wikipedia.org/wiki/Electricity_sector_in_Pakistanhttp://www.ppib.gov.pk/SupplyDemand.html/http://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdfhttps://www.cia.gov/library/publications/the-world-factbook/fields/2038.htmlhttp://www.indexmundi.com/pakistan/electricity_production.htmlhttps://www.cia.gov/library/publications/the-world-factbook/fields/2042.htmlhttp://www.indexmundi.com/pakistan/electricity_consumption.htmlhttp://en.wikipedia.org/wiki/Electricity_sector_in_Pakistanhttp://www.ppib.gov.pk/SupplyDemand.html/http://www.need.org/needpdf/infobook_activities/SecInfo/SolarS.pdf


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shown to any member outside our organization at any time. Your cooperation

would be highly appreciated.

Respondents Name: ____________________________________________________

Location: ______________________________________________________________

Surveyor: ______________________________________________________________

Educational Qualification

Matriculation Or less1 Intermediate2 Under

Graduate3 Graduate4 Post Graduate5

Age Group

Less than 18 years1 18-24 years2 25-31 Years3 31-45

Years4 46 Years and above5

Gender Male1 Female2

Marital Status Single1 Divorced2 Married3 Married with kids4

Income Per Month

Less than Rs. 200001

Rs.20,000 Rs.39,9992

Rs.40,000 Rs.59,9993 Rs.60,000 Rs.79,9994

Rs. 80,000 or more5

1-Do you have any Air Conditioner at your place?Yes No


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2-Which type of Air Conditioner do you have ? a.) window b.) split.

3- What is the capacity of your cooling unit?

a.)1Ton b.)1.5 Ton c.)2Ton d.)4Ton

4- How many months do you use your air conditioner in a year ?

a.)3-5 Months b.)5 7 Months c.)7-9Months

5-How many hours do you use your cooling unit daily?

a.)1-3 Hours b.)3-5Hours c.)5-7Hours d.)7-9Hours

e.)9-12 Hours f.)More than above.

6-Have you heard about Solar Energy?

7-Would you like to have a solar air conditioner at your place?

8-If the company providing solar air conditioner gives after sale services and warranty

what will be your purchase decision?

9-What is the most influential mode of advertisement?

Yes No

Yes No

Yes NoMay be Ill Buy


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a.)TV b.)Radio c.)Hoarding d.)Print

10-What factor is most important when you buy any product?

a.)Price b.)Quality c.) Uniqueness d).Guaranty


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