Solar Power Plants FAQs

Transcription

1 Solar Power Plants FAQs Solar Power industry in India is gaining more and more prominence with each passing day. The domestic/off-grid industry is picking up speed too. Owing to the queries we are receiving regarding the various issues pertaining to Solar Power Plant setup, we thought it would be a great idea to put together a bunch of questions and answer the same. We shall keeping adding to the list as we keep receiving more queries. So, here are the most Frequently Asked Questions and our answers for the same. Do let us know in case you would like us to answer any more questions. Also, kindly point out any inaccuracies/mistakes that you may find here so that we can correct the same for the benefit of everyone. How much land is required to setup a 1 MW solar power generation Unit? The land required for a 1 MW power plant setup is around acres for Crystalline technology and around acres for Thin-Film technology. This is only a rough benchmark and may vary based on technology and efficiency of panels. What is the life-time of a typical Solar Power plant? The useful life of a typical Solar Power plant is considered to be 25 years. This is the duration for which long-term PPAs are signed and financial models are built. However, Solar Power plants can run beyond 25 years while producing a lower output. Many Solar Panel manufacturers guarantee an output of 90% at the end of 10 years and 80% at the end of 25 years. What would be the total project cost excluding the cost of land? Total project cost per MW would be in the range of Rs.6.5 Crores-Rs.8 Crores depending on the kind of technology you are using, whether or not you are using

2 tracking systems, the kind of EPC Contractor you choose for power plant system etc. CERC recently announced the benchmark tariff for setup of Solar PV and Thermal Plants in India. Here s the link to the document containing more details: The table below indicates CERC determined benchmark cost for Financial Year What would be the O & M cost? Central Electricity Regulatory Commission (CERC) benchmark costs for O&M is Rs lakhs/year/mw for with a 5.72% increase every year. This varies from project to project based on the number of people you employ for maintenance, frequency of cleaning of panels, onsite-engineer availability etc..

3 What would be the per unit production cost? Per unit production cost is dependent on how much cost you are setting up the power plant for. Accordingly, the per unit sale cost can be set based on the expected returns. Is there any subsidy available for Solar Power plant setup? Capital Subsidy of 30% is applicable only for captive power plants up to 100 KW. This is expected to be increased to 500 KW for FY but an official confirmation regarding the same is still awaited. Subsidy will not be applicable in case of sale of power. 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: 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 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.

4 Kindly refer to our monthly newsletter REChronicles ( for more and up-to-date information on the REC market. Download documents relevant to Andhra Pradesh Solar Policy here: What would be the per unit expected sale price? This depends on the mode of sale of power and the consumer of power. In the case of sale of power to DISCOM, the prevailing Average Pooled Power Purchase Cost (APPC) will be applicable. In the case of sale of power to 3 rd Party consumer, a mutually agreed price can be agreed upon and accordingly a PPA can be signed. It is to be kept in mind that several additional charges such as Wheeling Charges, Distribution Charges, Open-Access Charges, Cross-Subsidy Charges are applicable in the case of sale of power to 3 rd party. These charges vary from State-to-State and DISCOM-to-DISCOM. What permissions/clearances are required to setup a Solar PV Plant? A certain set of permissions need to be obtained and documents need to be submitted in order to setup a Solar PV plant. These may vary from state-to-state. In order to get a Solar PV Project Accredited by AP State Load Dispatch Center (AP SLDC) for REC mechanism, the following are the statutory clearances and environmental clearances to be furnished: Industrial Clearance Land conversion (Agricultural to Non-Agricultural) Environmental Clearance Certificate from APPCB, Hyderabad Contract labour license from AP Labour Department Fire Safety certificate from AP Fire Department Latest tax receipt from the Municipal/Gram Panchayat for the factory land.

5 Auditor compliance certificate regarding fossil fuel utilization Approval from Chief Electrical Inspector Clearance from Forest department Also, all necessary approvals/agreements before start of Solar PV project construction are to be furnished as and when necessary. These include the following: Land purchase Power Evacuation arrangement permission letter from DISCOM Confirmation of Metering Arrangement and location ABT meter type, Manufacture, Model, Serial No. details for Energy Metering. Copy of PPA (important as Preferential PPA projects are not eligible for REC mechanism) Proposed Model and make of plant equipment Undertaking for compliance with the usage of fossil fuel criteria as specified by MNRE Details of Connectivity with DISCOM Connectivity Diagram and Single Line Diagram of Plant Details of pending court cases with APERC, Supreme Court of India, High Court of A.P. or any other courts Any other documents requested by AP SLDC While these are the documents that AP SLDC requires for REC project accreditation, these are typically the clearances/documents required in general for a Solar PV project.