1 megawatt solar power plant cost

What is the 1 Megawatt Solar Power Plant Cost? Today, anyone can set-up a solar power plant with a capacity of 1KW to 1MW on your land or rooftop spaces. The Govt. of India (MNRE) latest guidelines state that “Now anyone can generate electricity through solar power system and surplus electricity can be export through net-metering system. The installation of net-metering at the site will connect it to grid via state electricity board or distribution companies. Ministry of new and renewable energy (MNRE) and state nodal agencies are also providing 30%-70%  subsidy on solar panel for residential, institutional and non-profit organisations.100kw and above Solar power Plants Diagram

100kw and above Solar power Plants Diagram

These regulations were long awaited. This will boost solar or green power generation across the state and encourage people to install solar power system on their rooftops.

Types of Solar Power Plant

The basic work of Solar Power plant is to generate electricity from solar panel. Solar Panel generates DC (Direct Current) electricity from sunlight, solar inverter convert this power to AC (Alternative Current) and run your electrical home appliances and machines. Basically there are three types of Solar Power Plant.

Video – Types of Solar System

Off Grid Solar Power Plant

Off grid is a battery based solar power system, In the first priority this system will run your home appliances or connect load (as per solar inverter capacity). And surplus power feed in to the solar battery bank, provided with the solar power system. This type of solar power are recommended where power cut are the major problem.

On Grid Solar Power Plant

On grid solar system is grid (Government electricity supply) connected system. In the first priority this system will run your home appliances or connect load (without any limit). If your connected load will exceed the capacity of installed solar power plant it will automatically use the power from main grid. And if your connected load is less, it will supply surplus power to the grid. This type of system is recommended to reduce electricity bills only.

Hybrid Solar Power Plant

Hybrid is a combination of on grid solar system as well as off grid solar system. One side hybrid solar system connects with the main electricity grid and simultaneously it will also provide battery backup to you.

Solar Plant Investment Model

There are two ways to get solar power system installed at your home, business, institute or industry.CAPEX and OPEX Model Solar Power Installations

CAPEX and OPEX Model Solar Power Installations

CAPEX Model (One Time Investment)

In CAPEX model (capital expenditure will be yours) you will have to pay the complete system’s cost to system installation company in one shot and this would be your own system. And you will be get benefited for free electricity for next 25 plus years. If you are planing to install solar system for home or small business and your instillation size is less than 100 kW, then the best way to get it installed is CAPEX model.


In OPEX model (operation expenditure will be yours) system installation company will install the complete system at their own cost on your rooftop through a 10-25 year Power Purchase Agreement (PPA) between you and installation company. After that you just need to pay per unit on monthly basis. The PPA rates (Rs. 3 to Rs.7) are depend on your installation size, PPA time period and your company’s credit rating. If you want to install solar system for your institute, business or industry and your installation size is above 100kW. You can go for OPEX model.

OPEX or PPA Model

Solar Power Plant System Installation in OPEX Model

Solar Power Plant System Installation in OPEX Model

You might not want to build your own solar system but rather then this, you want to buy the electricity produced by the solar system. That way, you don’t have the upfront costs, construction and maintenance to worry about. Maybe someone else 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 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). OPEX model is also called the power purchase agreement.

1 Megawatt Solar Power Plant Cost

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

Investment Model for 1 MW Solar Plant
Capacity of Power Plant1 MW
Generation per Year17.50 Lakh
Degradation 1 to 10 year0.05%
Degradation 11 to 25 year0.67%
Debt Percentage70%
Equity Percentage30%
Rate of Interest (Indian)13.0%
Rate of Interest (Foreign)10%
Repayment Period (Indian)11 years
Repayment Period (Foreign)15 Years
Percentage of Indian Loan70%
Sale of ElectricityRs. 6.49
Cost of Project per MW450 Lakh
O&M Cost per MW8 Lakh/year
Corporate Tax30.28%
Minimum Alternate Tax18.38%
Project Cost450 Lakh
Debt355 Lakh
Equity95 Lakh

Solar power plant 1mw price large scale solar system grount mounted

Solar power plant 1mw price large scale solar system grount mounted

Financial Model 1MW Solar Plant 

 For ten years are as below (Lakh):

Operational Expenses888888888880
Bank Interest Payment57.151.846.44135.630.224.919.514.18.7330
Total Expense (without AD)99.494.188.783.377.972.567.261.856.451.0753
Profit Before Tax (without AD)14.119.424.730.135.440.746.051.256.761.9380
Taxation (without AD)
Profit After Tax (Without AD)11.415.720.024.428.633.037.441.545.550.2308
Profit After Tax (Without AD)11.415.720.024.428.633.037.441.545.550.2308
Bank Debt Service amount41.3741.3741.3741.3741.3741.3741.3741.3741.3741.37413

1MW Solar Plant Balance Sheet

Total Revenue for 10 years113,300,000Operational Expenses8,000,000
Bank Interest Payment33,000,000
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
Total Income113,300,000113,300,000
Profit After Tax (Without AD)30,770,000
Total amount in account65,070,000
Bank Debt Amount41,300,000
Balance cash in hand23,770,000

Solar Power Plant in India

The demand of clean energy in India is huge. India is one of the largest power generation portfolio. Indian government has launched the Jawaharlal Nehru National Solar Mission (JNNSM) on 11 January 2010, which aims to produce 227 GW of solar energy by 2022. It is a three phase mission which 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 favourable conditions for developing solar manufacturing capability in the country.India's Top 10 States with Solar Installation

India’s Top 10 States with Solar Installation

Solar Plant Installed in India

Solar power in India is one of the most rapid developing industry. This can be judged from the fact that many big solar power plants have been already installed in India. Some of their examples are:Solar power plants installed at Badla Rajasthan India

Solar plant installed at Badla Rajasthan, India

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

2. 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 plant that has spread over 13,000 acres with 2,000 MW of power generation capacity.

3. Charanka Solar Park, Gujrat: Charanka Solar Park is world’s third largest photovoltaic solar power plant. The park is installed in Patan district of Gujarat and has 790 MW capacity.

4. 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 4,000 MW power station, built by Tangedco at Naripaiyur village.

5. Dhirubhai Ambani Solar Park, Rajasthan: 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.

6. 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 named after the state of Maharashtra.

Scope of Solar Power in India

India is a developing country and its population is increasing day by day. It is expected that India become 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 ambitious state and center’s solar policies and projects.Solar Power In India

Solar Power In India

Nowadays India start switching to solar energy that is one of the best financial decision in today’s world. As we can see the prices of fossil and fuel are increasing day by day so this is a perfect alternative of 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

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