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Frequently Asked Questions On Solar Power PDF
Frequently Asked Questions On Solar Power PDF
General
How much land is required to setup a 1MW solar power generation Unit?
The land required for a 1 MW power plant setup is around 4.5-5 acres for Crystalline technology and around 6.5-7.5 acres for Thin-Film technology. This is
only a rough benchmark and may vary based on technology and efficiency of panels.
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What are the various modes under which we can setup a Solar Power plant?
The various modes under which a Solar Power plant can be setup depends on the specific requirement. All the following are valid modes and the costs for
each kind of system varies based on various factors:
Off-Grid Captive Consumption for domestic premises
Off-Grid Captive Consumption for commercial premises
Grid Connected (Net Metered) Captive Consumption for domestic premises
Grid Connected (Net Metered) Captive Consumption for commercial premises
Sale of Power generated to local Distribution Company (DISCOM)
Sale of Power generated to 3rd Party consumer (Industry or Commercial entity)
What is the cost of setting up a Rooftop Solar Power plant for domestic or commercial use?
Rooftop Solar Power plants can be broadly categorized into Battery-based and Non-Battery based systems. The benchmark cost set by MNRE for the
year 2013-14 for these systems are Rs.90-100 per W for Non-Battery based systems and Rs.170-210 per W for Battery-based systems. More details can
be accessed on the following MNRE webpage: http://mnre.gov.in/file-manager/UserFiles/amendmends-benchmarkcost-aa-jnnsm-2013-14.pdf
What size Solar Power plant is required for domestic or commercial use?
Identifying the Solar Power plant size for your domestic or commercial premises depends on the following factors:
Wattage of appliances to be run on Solar
Monthly energy consumption from these appliances
Energy Backup or Days of Autonomy required
Roof space available for plant setup
Based on these factors, the power plant sizing can be accordingly done at your end.
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Can Solar Power developers avail loans from banks for Solar Power plant setup? What is the loan % and what criteria does a bank/lending institution
look for?
There are 2 kinds of Financing mechanisms that are usually discussed – Recourse Financing and Non-Recourse Financing. Recourse Financing requires
collaterals and other extensive guarantees from the Solar developer who wishes to avail loan. Non-Recourse Financing, on the other hand, does not
require any additional collateral as the Asset or Power Plant itself is the collateral in this case. Recourse Financing is the prevalent mechanism in India
currently owing to lack of confidence of banks in the Power and Solar Power sector. The typical Debt-Equity Ratio (Loan to Investment Ratio) for Solar
Power plants is 70:30. And the typical collaterals required for a 70% project cost loan could be in the range of 40-60% project cost. This, however, varies
from bank to bank as each bank has its own risk perception/mitigation strategy, exposure targets to various sectors and Non-Performing Asset (NPA)
limits.
Is there a minimum size for Solar Power plants to be eligible for RECs?
As per the Second Amendment of REC Principal Regulations – 2013, there is no lower limit for Solar Power plants to be eligible for RECs. Though it
previously stated that 250 KW is the minimum size for Solar Power plants to be eligible for RECs, the same has been removed as part of the above stated
amendment.
Can CDM benefits (Carbon Credits) be availed for a Solar Power plant?
Yes. REC Mechanism and CDM are mutually exclusive and hence a power developer can claim CDM benefits (Carbon Credits) also. However, it is to be
noted that the current trading prices of Carbon Credits or Certified Emission Reductions (CERs) at the European ETS system is less than 0.7 Euro which
are pretty low compared to the 15-20 Euro trading prices a few years back. At these prices, getting a Solar project registered under CDM mechanism does
not make any sense as the payback for the expenses in the process itself takes several years. Unless the Solar Power Plant is of size 10 MW or more it
does not make financial sense to go for Carbon Credits (CERs).
Can Capital Subsidy be claimed for a 1 MW Solar Power plant (or greater size)?
No. Capital Subsidy cannot be claimed for plants beyond 500 KW size. Also, capital subsidy is made available only to Off-Grid and Decentralized Solar
Power applications and not Grid Connected Plants that are in the business of selling the generated power.
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Setting up Solar Power plant in Andhra Pradesh
We would like to setup a Solar power plant in Andhra Pradesh but we have not participated in AP solar bidding. What are the other options?
Since you have not participated in AP Solar Bidding, one other way would be the REC route. You can sell the generated power to APTRANSCO or third
party consumer. Through this route, you sell power to APTRANSCO/third party and also claim RECs for the same. This way, you will be able to get a base
tariff (APPC) from APTRANSCO and then additional revenue can be generated through sale of Solar RECs. However, it is to be kept in mind that the
following additional benefits may be availed for a Solar PV Project commissioned before June 2014 subject to the condition that REC benefits are not
availed (in case of Captive Generating Plants and Plants setup under Preferential Tariff basis):
Exemption from Electricity Duty
Exemption of Wheeling Charges, Transmission Charges and Cross-subsidy Charges
Refund of VAT
Refund of Stamp Duty and Registration Charges for purchase of land
However, it has to be kept in mind that REC revenue is market driven and can fluctuate as both demand and supply are pretty low on Solar front right
now. Kindly refer to our monthly newsletter – REChronicles (http://efficientcarbon.com/services/energy/renewable-energy-certificates) – for more and up-to-date
information on the REC market.
Download documents relevant to Andhra Pradesh Solar Policy here –http://nedcap.gov.in/PDFs/2012ENY_MS39.pdf
http://nedcap.gov.in/PDFs/Amendment_to_AP_Solar_power_policy.pdf
Miscellaneous
I have land and some company posted that they are looking for people having land and ready to invest about Rs.10 lakhs. Can I go ahead with this
investment?
It is difficult to comment much without more information about the company. However, it is advised to check the company’s track record to understand
the company’s previous projects and the revenues/returns from such projects. A couple of things that you might have already understood from the info
on this FAQs page is that a typical good quality Solar PV Power plant required Rs.6.5-8 Crores for setup. In line with this, the investment of Rs.10 lakhs
you have been asked to make comes to around 1.5% of total project cost which is not much. If your land also has certain value, that can be factored into
your equity contribution to the project. While we am not sure about the promise made by the company to you in terms of returns, kindly make sure that
your investment has been duly considered in project equity and the associated returns. Also, it is possible that there are several other investors such as
you who might be investing in the project. You might ask the company details regarding the same. Following are a few more things you can ask the
company to provide:
Is the entire project equity funded from investors such as you? If ‘Yes’, who are the other investors? If ‘No’, what is the debt portion, where is it coming
from and what is the interest rate?
Where is the project going to be setup?
Who is the power sold to and at what price is it being sold?
What are the yearly estimated revenues and returns?
When would you as an investor start making money (important as payback period is reasonably high for Solar Projects)?
As an investor, you have every right to know the answers to these questions. Kindly evaluate all scenarios and clarify all you queries before making such
an investment.
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SOLARSOLUTIONS2015@GMAIL.COM August 31, 2014 at 2:26 pm
Dear Pashupati Garu,
Good Afternoon.
For end to end solutions, pls get back to us with full requirements solarsolutions2015@gmail.com.
Best Regards,
Sowmya
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THARUN KARRA August 19, 2014 at 5:34 pm
Dear sir
Iam tharun works for Bosch solar energy.
There are no subsidys for mw plants.
Recently govt of ap opened a 500 mw policy.
You can participate in reverse bidding.
Regards
Tharunkarra@gmail.com
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You can contact me for more information.
Regards
Tharunkarra
Tharunkarra@gmail.com
82979 60700
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Muralidharan.V. August 19, 2014 at 10:06 am
Dear SIr ,
Please send your mob no and contact email id to the following and we can discuss in detail reg the project.
Please let us know which village of W Godavari dist is your present land? We can see the irradiation in that area and think of alt land only if
necessary.
Regards ,
Muralidharan.V.
veeemdee@gmail.com
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raghu August 12, 2014 at 10:10 pm
hello,
im planning to setup a solar power plant for 500kw, i have my land of 4acres. could anyone me send me the project details in detail please.
thanks in advance
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Muralidharan.V. August 11, 2014 at 11:39 am
Dear Mr.Kishore Please let me know the location and size of land holding.Based on the location we can assure 19.25 lakhs
units/MW/annum and can also arrange for 3rd party PPA. We can also arrange for finance if need be based on the financial
background of the investors at a comfortable rate of interest , assuring a good ROI.
Please call on 09445094041 or email to veeemdee!@gmail.com
Regards ,
Muralidharan.V.
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Is it for captive usage or selling to grid?
For more information you can plzz contact me.
Regards
Tharunkarra
Tharunkarra@gmail.com
0 82979 60700
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Regards
Anshuman
anshu4503@yahoo.co.in
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SOLARSOLUTIONS2015@GMAIL.COM August 6, 2014 at 6:20 pm
Dear Ravivardhan,
Good Evenining.
For end to end soultions on setting up the plant, pls get back to us solarsolutions2015@gmail.com.
Best Regards,
Sowmya
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For more information you can plzz contact.
Tharunkarra
Tharunkarra@gmail.com
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FAQS ON GRID CONNECTED SOLAR PV PLANTS IN INDIA
Get answers to your basic questions on setting up a Solar PV Power Plant in India.
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