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Zip Code Licenses for Solar & Power Companies

Whether you are a small one person operation, a midsized solar energy company or a multibillion dollar energy corporation with a diversity of fuels, licensing the Fluxcell through its Zip Code Licensing System is a great way to:
 
1.  Get and maintain certain levels of control over your market area.
2.  Minimize solar energy competition.
3.  Maximize profits.
4.  Minimize marketing expenses.

The Zip Code Licensing System is as simple as it gets.  Your licensing for the Fluxcell covers an enitire zip code for any state in the U.S. Global nation city area licenses are also available.  There are over 42,000 zip codes in the U.S.  

License Pricing
The current license price per home is 25 cents.  This is a one time fee.  This price is subject to change for future licenses.
Thus a zip code license in a zip code with 10,000 homes costs $2,500.  Likewise a zip code with 2,000 homes costs $500.  The number of homes in a zip code typically ranges from 5,000 homes to 20,000 homes.  The greatest concentration of homes per zip code will be in the city and will be reduced as you move away from the city.  A fee of 20% of the license fee is due annually to keep the license active.  For a $2,500 license fee the annual fee is $500.  Resources you can use to are usps.com Every Door Direct Mail tool, zip-codes.com and us-zip.com.  The are other zip code information sources also. 

Marketing (optional)
The beauty of the Zip Code Licensing System is that your marketing can be extremely targeted.  One good marketing tool to use is the Every Door Direct Mail (EDDM) tool by the United States Postal Service at usps.com.  Unless you purchase a number of zip codes there is no need to spend ad dollars targeting a larger area with a newspaper or some other medium (although it would give you brand credibility).  For the cheapest and most cost effective means of marketing to homeowners, Fluxcell recommends the 6.25” x 9” full color double sided postcard.  With EDDM you do not have to have address labels or stamps which means a great cost and time savings.  Just go to the Postal Service web site and click and send.

Marketing Costs (optional)
1.  Postcard Design: $250 to $1,000 (one time), use average $625 spread over 30,000 postcards = 2 cents per postcard
2.  Printing: 10 cents per postcard for printing 5,000 or more cards. 20 cents for printing 1,000 cards.
3.  Postage: EDDM postage 18.3 cents per postcard
4.  Labor: sorting, packing is 2 cents per postcard
4.  Shipping: to Post Office Servicing the targeted zip code, 2 cents per postcard.
Total: approximately 35 to 50 cents per postcard per house.

Utilizing postcards to introduce your company to homeowners is a great and inexpensive way to quickly establish communication.  It is believed that this will lead to a great business relationship between your company and the homeowner.  Its not always about the savings, relationships are important to.

Limited Competition
All open markets or freshly unregulated markets initially have a large number of companies enter into it but in the end only 4 or 5 companies will remain.  In looking at this and other factors, Fluxcell limits the number of licenses to at least 4 licenses per zip code or 1 license per 2000 homes or 6 licenses max per zip code whichever is greater.  Of the 4 licenses 1 license is a term license that lasts 3 years and is auctioned off.  Of the 6 licenses 2 licenses are term licenses that last 3 years each.  The term licensee can sign contracts for 0 to 3 years.  Fluxcell maintains a dormant license in each zip code that is only initiated if the kilowatt hour rate exceeds a predetermined threshold.  The licenses have no expiration date except that the annual fees be paid.

Operational Model
Fluxcell, Inc. is a licensing and systems corporation.  This means that the manufaturing, distribution and retail/marketing is licensed to third parties.  This model provides the ultimate level of flexibility and growth for Fluxcell.

There are two features that control the kilowatt rates charges to homeowners end users).  Fluxcell controls the base rate so as to prevent a market price collapse and the retailer/marketers control the top rate.

Base Rate
The percentages of the electric use for the base rate and are calculated after the 5 to 15%, etc. discount for end energy users.
4% to manufacturer
4% to distributor
4% to retailer/marketer
4% to other entities
12% to taxes
5% to maintenance and repair fund
2% other
25% to securitization bond holders (varies from 25% to 45%)
40% to Fluxcell
Total 100%

Top Rate
The Top Rate percentages are as follows:
4% to manufacturer
4% to distributor
4% to other entities
12% to taxes
5% to maintenance and repair fund
2% other
25% to Fluxcell
Total 60%
Remaining 40% goes to Retailer/Marketer



FluxStores
Retail/Marketer Licensee who wish to increase their revenues and visibility can choose to open up a physical Fluxstore storefront within their zip code.  These Fluxstores allow the Licensee to provide additional services such as,
1.  electric car sales
2.  electric car rentals
3.  electric appliances,
4.  Fluxcell module and electron storage rentals for
     a.  picnics
     b.  events
     c.  movie shoot locations
     d.  pop up concerts
     e.  natural disaster emergencies, etc.
 

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The base rate is the same for all retail/marketers within a zip code.  Competitive market forces between the retail/marketers influences the top rate. Retail/marketers set this rate themselves.  Thus one retail/marketer will set a top rate for a home at 11.50 cents another 11.40 cents and another for 11.65 cents.  The top rate can vary between homes contracted by each retail/marketer. 

The minimum top rate is the base rate (of which the retail/marketer’s share is 4% of the base rate).  The base rate and the top rate remained fixed for every homeowner until the contract expires or a variable rate contract can be signed.  Zero contract homeowners may have a variable rate.

In the above example Fluxcell say may set a base rate of 10.5 cents per kilowatt-hour which reflects a 1.5 cents (12.5%) discount from 12 cents per kilowatt-hour (the national grid average).  The retail/marketer will get 4% of this base rate.  If the retailer/marketer sets a base rate of say 11.5 cents per kilowatt-hour then their gross profit is 40% of this spread 11.5 - 10.5 = 1 cents ($.01).  The retail/marketers share is then $.01 x .40 = .40 cents ($.0040) per kwh.

Top Rate Revenue
Thus if a home has a monthly electric bill of $175 per month, at 12 cents per kwh the amount consumed is $175/.12 = 1,500 kwh.  $.01 x 1,500 x .40 = $6.00 per month per house.  Lets say a zip code has 8000 homes and just using averages this leaves you with 2,000 homes of which you have 1000 under contract.  1,000 x $6.00 = $6,000 in revenue per month for the licensee or $72,000 per year.

Base Rate Revenue
1,500 kwh x $.105 x 4% = $6.30 per month per house.  $6.30 x 1,000 homes = $6,300 per month.  $75,600 per year.

The total annual revenue for 1 zip code based on 1,000 homes contracted having an average $175 per month electric bill with a Top Rate of 11.5 cents/kwh and a Base Rate of 10.5 cents/kwh = $147,000 per year. 

The retailer/market can sign contracts with each homeowner from 0 to 3 years.  Because the system is almost fully automated the retail/marketer will realize high profit margins, the main expenses being customer acquisition.  

Profits
Your profits are dictated by customer acquisition costs.  Based on the above metrics, $12.30 per home is generated per month or $442.80 over the term of the 3 year contract.  Your costs per contract are
a.  marketing costs
b.  labor
c.  labor servicing costs
d.  office expenses
e.  rent

Questions and Answers

1.  How do I choose a zip code?

Zip codes can be choosen based on many factors.  The primary factor is location and profit potential.  Houses in some zip codes may have big houses and big yards, big houses and small yards, small houses and big yards and small houses and small yards.  In general a small house may have an energy bill (at today’s rates) of $150 per month and a big house $300 per month or more.  Also factors such as gas and all electric come into play.  The national average is $125 per month.

2.  Can I sell my license to another company?
Yes.  A $500 transfer fee will apply.

3.  How many licenses can my company buy?
Currently a company is limited to buying 2 zip code licenses per state per month.  This can be nationwide at 2 per state per month.  Only one license per zip code per company.  Within each zip code there is no limit to the number of homes that you can contract with.  The number of homes per zip code typically ranges from 5,000 to 20,000 homes.

4.  Do I have to pay for the modules?
No.  The modules are securitized via third party bond holders.  This securitization loan captures between 25% and 40% of the revenue from the monthly electric bill.  This money pays the manufacturers for the module and a base installation fee to the installers.  Your only cost are advertising and marketing to sign a homeowner up.

5.  What are the incentives to a homeowner to enter into a contract?
a.  5 to 15% discount from their current electric bill. 
b.  $0 down options.
c.  0 to 3 year contracts as opposed to 25 year contracts with today’s solar energy technology Power Purchase Agreements.
d.  See home page for comparisons to today’s solar energy technology.
e.  Reduces carbon footprint and eliminates destruction to the environment.
f.  50% grid and 100% grid free options.
g.  fixed kilowatt hour rates, no separate rates for summer or winter.
h.  potential consumption discounts over a certain kilowatt hour usage.

6.  Is this a franchise and what is my company’s role?
No this is not a franchise.  You do not refer or bring in other individuals or companies.  You will operate your company as its own company.  You will have a Fluxcell technology retail/marketer’s license.  The retailer/marketer gets contracts and helps service the contract.  For example if there is a homeowner issue the retailer/marketer will address it.  The retailer/marketer chooses the distributor and the installer from a list of licensed Fluxcell distributors and installers.  The retailer/marketer or (at the retail/marketers allowance) the homeowner chooses the brand of the Fluxcell module.  Although the technology is the same the brand is that of the Manufacturer or an associated entity.  Each manufacturer may have a certain style or look for their modules.  If the Fluxcell has an operational problem then the system notifies the retailer/marketer, the manufacturer, the distributor and the installer and schedules a replacement module time.  Because the Fluxcell has numerous capacitor reactors on a smart grid within the module it is a redundant system which minimizes failure.  Also depending on costs, there may be 2 modules on a pole, 1 for backup.

7.  When can we start marketing and when will the modules be ready for installation?
You can start marketing and signing contracts now.  The modules are targeted to be ready in mid 2016.  Homeowners can choose to pay to be put in a queuing system that will give them a priority over non down payment homeowners.  Fluxcell will provide a standard contract to licensees.  The license covers any residential and multi family residential properties and/or units in the zip code.

8.  How will homeowners know that my company is licensed?
Your company will be listed as a licensee in Fluxcell’s database of which they can request your company to be verified.

9.  When do I receive revenue?
Monthly.  If a homeowner pays a January bill which is due by the last day of February you will receive your share by the last day of March.  The Flux Capacitor Solar Cell is controlled by a computer which periodically connects to the internet to upload usage and maintenance information to Fluxcell’s servers and to download payment codes.  The homeowners can choose from billing (the cheapest), prepay and then anonymous (the most expensive).

10.  Are the zip codes permanent?
In the U.S. approximately 10% of the zip code areas change every year.  If you purchase a zip code and it splits in two then you will now have two zip codes.  If you purchase a zip code and it is eliminated and incorporated in one or more zip codes you will now be a part of up to 2 of the existing zip codes which your previous zip code was incorporated into.  You will still maintain any contracts that you previously had with the homeowners until they expire.

11.  How do I purchase a license?
Send an email to info at fluxcell.com and a representative will contact you.

Fluxcell, Inc. 2015
Coalesce Point-Trust 2007-2015

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