I want to establish a 1MW solar power plant. Will it be profitable?

Q&ACategory: QuestionsI want to establish a 1MW solar power plant. Will it be profitable?
1 Answers
Admin answered 1 year ago

It’s really profitable.
There are two methods for buying Solar PV plant

1) Outright Purchase

If you buy it outright, your payback will be around 5 years. After that for 15 years you can enjoy free energy.

A good quality PV system cost around 70,000 per kW from 100 to 200 kW and it can come down to 55,000 per kW when the capacity of the plant increase. This cost includes everything from PV panels to commissioning of project to couple it with your electricity line.

Now government has withdrawn subsidy for Solar PV. But u can avail accelerated depreciation (25% of project cost) for industrial and commercial customers ,  if your profitable.

2) Power Purchase Agreement (PPA)

In this method the supplier will install the PV plant at your premises or other premises depending on the space availability and kW capacity you need.

You don’t need to pay anything to the supplier. After the plant is commissioned supplier will have a Energy meter and charge you some price per kWh delivered.

The cost per kWh depends on various factors.
1) premises where the plant is installed.
2) Transmission cost of Electricity board
3) Solar irradiation at the location
4) Tenure period

The cost per kWh in India is from Rs. 5 to 7 rupees depending on the above factors. But it will definitely less that the Electricity board price.

But in PPA model the only thing you have to give to supplier is Bank Guarantee. They will ask a 12 month bank guarantee for a projected savings.

So in PPA model you will reap benefits from the starting itself.
But if you see for long run the total profit from outright will be higher than that of PPA model.

Solar is definitely profitable. And also you will reduce  0.4 kg of CO2 emission for every kWh you consume from solar.

Source: http://www.quora.com/Is-solar-energy-in-India-considered-successful

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