A solar power plant with a 1MW capacity or more can be considered as a “Ground Mounted Solar Power Plant, Solar Power Station or Energy Generating Station”. These solar power systems produce a large amount of electricity which is more than enough to power any company independently or can subsequently be sold to the government.

The latest guidelines of Govt. of India (MNRE) states that "Now anyone can generate electricity through solar power system and surplus electricity can be export through the net-metering system.

Ground Mounted Solar System

Today, anyone can set up a solar power plant with a capacity of 1KW to 1MW on their land or rooftop spaces. Ministry of New and Renewable Energy (MNRE) and state nodal agencies are also providing 20%-70%  subsidy on solar for residential, institutional, and non-profit organizations to promote such green energy sources. State electricity boards and distribution companies will assist you in the entire process. These incentives/schemes will boost the power generation in India and encourage people to install solar power systems. 

1MW Solar Power Plant
1 MW Solar Power Plant Installed on ground.

In a developing country like India, the consumption of electricity is increasing continuously and its production is limited. Also, we don’t have enough resources to store so much energy. Therefore, because of the upcoming energy consumption, it would be a wise thing to install a solar power plant.

Page Highlights:

1 MW Quick Overview

Power Generation

4000 kWH Units/Day

Average Cost

INR 3 to 4 crore

(Inclusive of all taxes)

Annual Saving

1 Crore (Approx)

Area Required

4 to 5 Acres

#1. Types of Solar Power Plant

There are three types of solar power plants, which work on the same principle of the “Photovoltaic Effect”. These solar systems consist of components such as a solar panel, a solar inverter, and a solar battery that do all the work from electricity generation to controlling. So let’s see these types of solar power plants.

Learn more about:

On-Grid Solar Power Plant

On grid solar power plants are best suitable for large institutes, commercial and industrial sectors because there is no load limit.

An on-grid solar system is a grid (Government electricity supply) connected system. This solar system will run your home appliances or connected load (without any limit) by using solar power. If your connected load will exceed the capacity of the installed solar power plant, the system will automatically use the power from the main grid. In case, your connected load is less than the generating capacity, it will supply surplus power to the grid. This type of system is recommended to reduce electricity bills only.

Read more about:

Off-Grid Solar Power Plant

Off grid solar power plants are mostly used for homes and residential areas where backup is required due to regular and long power cuts.

An off-grid solar power plant is a battery-based solar power system. In this type of solar system, there are solar panels, solar inverter, and solar battery. This system will run your home appliances or connected load (as per solar inverter capacity) by using solar power. The unconsumed or surplus power will be stored in the solar battery bank. An off-grid solar power system is recommended where power cuts are the major problem.

Read more about:

Hybrid Solar Power Plant

Hybrid solar power plants are suitable for both residential and commercial locations. Just its components and capacity change according to its installation purpose.

A hybrid solar power plant is a combination of an on-grid solar system and an off-grid solar system. This solar system will combine the functionality of both solar power systems. On one side a hybrid solar system connects with the main electricity grid and on the other side, it simultaneously can be connected with solar batteries to provide backup to you.

Read more about:

#2. Types of Investment Models

There are two ways/models to get a solar power system installed at your home, business, institute, and industry.

  • CAPEX Modal (One Time Investment)
  • OPEX or PPA Modal

CAPEX Model (One Time Investment)

In the CAPEX model, capital expenditure will be all yours. You will have to pay the complete system’s cost to the solar system installation company in one shot. The power plant installed in this way will be your own system. You will be get benefited from free electricity for the next 25+ years. The CAPEX model will be best for you when you are planning to install a 100kW or less capacity solar system for your home or business.

1 MW Solar Power Plant
1 MW Solar Power Plant

OPEX Model (PPA)

In the OPEX model, only operation expenditure will be yours. A solar system installation company will install the complete solar system at their own cost on your rooftop through a 10-25 year Power Purchase Agreement (PPA) between you and the installation company. After the installation, you just need to pay per unit (less than the regular grid price) on monthly basis. The PPA rates (Rs. 3 to Rs.7) depend on your installation size, PPA period, and your company’s credit rating. If you want to install a solar system with more than 100kW capacity for your institute, business, or industry, the OPEX modal will be the best option.

OPEX Model Solar Power Plant Installations

You might not want to build your own solar system with millions of investments. Instead of this, buying the electricity produced by the solar system at less prices will be the best alternative. In this way, you don’t have to pay the upfront costs, construction costs, and maintenance costs. There are a lot of investors who will be happy to build a solar plant on your roof (or nearby) and sell you the power through a Power Purchase Agreement (PPA). This model works typically for industrial and commercial solar system consumers and Indian companies have started offering it to residential customers in some cities.

A PPA is a formal agreement between an electricity consumer (in this case, you) and the electricity generator (usually an investor) that specifies the terms and conditions of electricity purchase. Details usually include the length of the PPA (typically 10- 25 years), the price (tariff) for the power from the solar plant, and annual escalations (if any).

#3. 1MW Solar Plant Cost

The cost of solar power systems has come down drastically in the last few years because the government is promoting green energy in many ways. Now the cost of 1MW solar plant has come down to just Rs 4 crore. By investing Rs 4 crore you can install your own 1MW solar plant at your place and can supply the electricity to the whole area for more than 25 years.

1MW solar power plant is not a small capacity system, so it is obvious that its generation capacity will be very high. But now the question comes that after all how much electricity can it actually generate. So let’s see some calculations for it.

 

Since a 1kW solar system generates = 4 units/day

 

Accordingly, 1MW will generate,

4 units x 1000kW = 4,000 units/day (1MW = 1000kW), & 4,000 units x 30 days = 1,20,000 units/month.

 

1,20,000 units x 12 months = 14,40,000 units/year.

 

But the exact generation can be varied according to the types of solar panel you installed, installation location, solar brands, etc.

#4. Project Report for 1MW Solar Plant

We see a huge demand for information regarding the investment model for setting up a 1 MW solar system. We have decided to create a 1 MW estimate series. So here it is:

Particulars

Description

Capacity of Power Plant

1 MW

Generation per Year

17.50 Lakh

Degradation 1 to 10 year

0.05%

Degradation 11 to 25 year

0.67%

Debt Percentage

70%

Equity Percentage

30%

Rate of Interest (Indian)

13.0%

Rate of Interest (Foreign)

10%

Repayment Period (Indian)

11 years

Repayment Period (Foreign)

15 Years

Percentage of Indian Loan

70%

Sale of Electricity

Rs. 6.49

Cost of Project per MW

450 Lakh

O&M Cost per MW

8 Lakh/year

Depreciation

5.28%

Corporate Tax

30.28%

Minimum Alternate Tax

18.38%

Project Cost

450 Lakh

Debt

355 Lakh

Equity

95 Lakh

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The financial modal of 1MW solar plant for ten years are as below.

(The calculations are in Lakh)

Years

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Total

Revenue

113.5

113.5

113.4

113.4

113.3

113.2

113.2

113.12

113.1

112.9

1133

Operational Expenses

8

8

8

8

8

8

8

8

8

8

80

Bank Interest Payment

57.1

51.8

46.4

41

35.6

30.2

24.9

19.5

14.1

8.7

330

Depreciation

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

343

Total Expense (without AD)

99.4

94.1

88.7

83.3

77.9

72.5

67.2

61.8

56.4

51.0

753

Profit Before Tax (without AD)

14.1

19.4

24.7

30.1

35.4

40.7

46.0

51.2

56.7

61.9

380

Taxation (without AD)

2.7

3.7

4.7

5.7

6.8

7.7

8.7

9.7

10.8

11.8

72

Profit After Tax (Without AD)

11.4

15.7

20.0

24.4

28.6

33.0

37.4

41.5

45.5

50.2

308

Profit After Tax (Without AD)

11.4

15.7

20.0

24.4

28.6

33.0

37.4

41.5

45.5

50.2

308

Depreciation

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

34.3

343

Bank Debt Service amount

41.37

41.37

41.37

41.37

41.37

41.37

41.37

41.37

41.37

41.37

413

 

#5. 1MW Solar Plant Balance Sheet

EXPENDITURE

AMOUNT

AMOUNT

Operational Expenses

8,000,000

 

Bank Interest Payment

33,000,000

 

Depreciation

34,300,000

 

Total Expense (without AD)

 

75,300,000

Profit Before Tax (without AD)

 

38,000,000

Taxation (without AD)

7,230,000

 

(Min Alternative Tax 19%)

  

Profit After Tax (Without AD)

30,770,000

 
  

113,300,000

 

Depreciation

34,300,000

Profit After Tax (Without AD)

30,770,000

Total amount in account

65,070,000

Bank Debt Amount

41,300,000

Balance cash in hand

23,770,000

#6. Solar Power Plant in India

India's Top 10 States with Solar Installation

India is one of the largest power generation portfolios. The demand for clean energy in India is huge and is continuously increasing. Therefore, the Indian government has launched the Jawaharlal Nehru National Solar Mission (JNNSM) on 11 January 2010, which aims to produce 227 GW (Gigawatt) of solar energy by 2022. It is a three-phase mission that aims to install 20,000 MW on-grid solar power plants, 2000 MW off-grid solar power plant including 20 million solar lights, and to create favorable conditions for developing solar manufacturing capability in the country.

#7. MW Power Plant Installations

Solar power in India is one of the most rapidly developing industries. This can be judged from the fact that many large-capacity solar power plants have been already installed in India. Let’s see some of these solar power plants.

Bhadla Solar Park, Rajasthan (2255 MW)

Solar power plants installed at Badla Rajasthan India

Bhadla Solar Park is a 2055 MW capacity solar power plant located in the Jodhpur district of Rajasthan and spread over a total area of 10,000 acres. It is one of the largest solar parks in India.

Shakti Sthala Pavagada Solar Park, Karnataka (2000 MW)

Shakti Sthala Pavagada Solar Park, Karnataka

Shakti Sthala Pavagada Solar Park is situated in Karnataka. It is one of the world’s biggest solar power plants that has spread over 13,000 acres with 2,000 MW of power generation capacity.

Charanka Solar Park, Gujrat (790 MW Approx.)

Charanka Solar Park, Gujrat

Charanka Solar Park is the world’s third-largest photovoltaic solar power plant. The park is installed in the Patan district of Gujarat and has a 790 MW capacity.

Kadaladi Power Station, Tamil Nadu (4000 MW)

Kadaladi Power Station, Tamil Nadu

Kadaladi solar park is a 500MW solar park planned for commissioning in 2019 in the region of Ramanathapuram district and proposed a 4,000 MW power station, built by Tangedco at Naripaiyur village.

Dhirubhai Ambani Solar Park, Rajasthan

Dhirubhai Ambani Solar Park, Rajasthan-min

Dhirubhai Ambani Solar Park is located near Pokhran in the Jaisalmer district of Rajasthan. This solar power plant is developed by Reliance Industries. It is one of the largest in the state of Rajasthan.

Maharashtra Solar Power Plant (67.2 MW)

Maharashtra Solar Power Plant

Maharashtra Solar Power Plant is situated in the Beed district of Maharashtra. This solar power plant was established in August 2017. This solar power plant has a capacity of 67 MW and is named after the state of Maharashtra.

#8. Scope of Solar Power in India

India is a developing country and its population is increasing day by day. It is expected that India becomes the world’s most populated country by 2022. India provides a positive environment among investors keen to tap into India’s potential. India has a long way to go in the sector of solar energy.

In near future, India will explore new potential areas and ensure the maximum use of solar power get world leadership. The “National Institution of Solar Energy in India” has determined the country’s solar power potential at around 750 GW. India is slowly going to get its dominion in the field of solar power generation due to the ambitious state and center’s solar policies and projects.

Nowadays India starts switching to solar energy that is one of the best financial decisions in today’s world. As we can see the prices of fossil and fuels are increasing day by day so this is a perfect alternative to this problem. Although, India has huge scope in the field of solar energy in near future because solar power for home and industries are a cheap source of clean energy and secondly, it is available widely across the country without any interruption.

#9. Frequently Asked Questions

1 megawatt is equal to 1,000 kilowatts or 10,00,000 watts.

1kW solar system produces 4 units average per day throughout the year. Accordingly, a 1MW solar power plant produces 4000 units per day on average.

OPEX (Operating Expenses) model is also called Power Purchase Agreement. In this model, the Solar System Installation Company will install the complete system at their own cost through an agreement for 10-25 years. And you will have to pay per unit cost on monthly basis.

In CAPEX (Capital expenditure) model, the installation cost of the solar system will be completely yours. You will have to pay the cost to the Installation Company in one shot. After paying the installation cost, this would be your own solar plant.

Both models are good. If you are a cash-rich company, you should go for CAPEX. In case of shortage of investment, the OPEX model is better. Because if you choose the CAPEX model then you will have to pay a heavy amount of money in a single shot. But in the OPEX model, you can pay per unit cost on monthly basis for 10-25 years.

Where the daily consumption of electricity is more than 4000 units.

Yes, of course, you can export the excess amount of generated electricity to the government (in the grid) through net metering. And the government will adjust it in your upcoming electricity bills.

Govt. of India release the tenders for the PPA-based solar power plant. You need to bid with the lowest per-unit price in such tenders for the same.

The estimated cost of 1 MW solar power plant is approx. 4 crore.

You can install 1 MW solar PV plant at any shadow-free area where the sunlight can come without any barrier. For installing 1 MW solar plant 2.5-acre area is required.

Approximate 3000 panels of 335 watts each.

A 1-megawatt solar power plant can generate 4,000 units per day as an average. So accordingly it generates 1,20,000 units per month and 14,40,000 units per year. 

No, it is not difficult to maintain the efficiency of 1 MW solar plant. By cleaning solar panels from time to time with a solar panel cleaning kit, the efficiency level of solar panels can be maintained easily.

Normally, a 1kW solar plant requires 6 square meter area. Accordingly, if you want to install 1 MW solar PV power plant then 6000 square meters (+ shadow gap) area will be required.

For installing 1 MW solar power plant, you can contact us.

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Updated On: 15/09/2021

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