Cost of setting up a 1MW Solar Plant in Andhra Pradesh

Our article Why invest in Solar in India discusses in detail about the current opportunity in Solar sector in India and in leading solar states such as Andhra Pradesh

There are few business models that solar investors/developers could choose from when it comes to investing in Solar in India, our article Business models in Solar in India discusses these models in detail

Below are the list of components which contribute to overall cost of a solar plant

Solar Modules
Among the various photovoltaic technologies in use, crystalline Silicon technology is most widely used technology globally.

This is primarily because the technology is well understood, and was amongst the first developed photovoltaic technologies. The installation and integration of these modules is relatively easier

Non Module Components
The non-module cost components comprise cost towards land, civil & general works, ground mounting structures, power conditioning unit, cabling & transformer/ switch-gears and preliminary/pre-operating expenses & financing costs.

Each component of above referred non-module cost of Solar PV based power plant is estimated as under for the determination of capital cost of Solar PV projects

Land Requirement
The land requirement for Solar PV based power project depends upon the technology employed i.e. Crystalline or Thin film, land requirement for crystalline PV project is 5 Acre/MW

Power Conditioning Unit (Inverter)
Power conditioning Unit is an important component of the balance-of-system. Power conditioners process the DC power produced by a photovoltaic system to AC power and match the same with utility’s power

Civil and General Works
The cost associated with civil works includes testing of soil, preparation of soil/ground with all necessary works like earthmoving, digging holes for the foundations/pilings and leveling, fencing of the land, development of approach road, cable trenches, water supply arrangement in solar farm, control room etc.

General works include security of solar farm, setting up of power back-up generator; yard lighting, earthling kits, etc

Ground Mounting Structures
The major portion of the site will be used for ground mounting structures, PV module are mounted in a steel structure which will be installed facing south direction for best efficiency & optimal power output.

The steel structure will be grouted using RCC foundation. The structure is designed to hold 20 modules per structure and which can withstand wind speed up to 170km/hr.

The structure is designed in such a way that it will occupy minimum required space without sacrificing the performance.

Cables and Transformers
Cables  consists of DC caballing between Solar PV panels & Inverters including junction boxes, AC cabling between Inverter & sub-station, Earthling arrangements and Transformer.

Transformers includes Breakers, Current Transformers, Potential Transformers, and Isolators

Preliminary/Pre-operating expenses and Financing Costs
The preliminary/pre-operating expenses include transportation of equipment, storage of equipment at site, insurance, contingency, taxes and duties IDC(Interest during construction) and finance charges etc.

Detailed breakup of Preliminary and Pre-operative expenses and financing cost, lump sum in percentage of total capital cost is proposed as under:

  • Insurance Cost: 0.5%
  • Contingency: 0.5%
  • Interest during Construction (IDC): 5%
  • Financing cost: 1%
  • Project management cost: 1%
  • Pre-operative Cost: 1.0%

Preliminary/Pre-operating expenses and Financing Cost contribute to around 10% of total capital cost on average basis.

The Table below presents the breakup of benchmark capital cost for Solar PV projects

Particulars  Capital Cost
(Rs Lakh/MW) 
% of Total Cost 
PV Modules 360.00 56%
Land Cost 018.00 3%
Civil and General Works 050.00 8%
Mounting Structures 040.00 6%
Power Conditioning Unit 050.00 8%
Evacuation Costs 060.00 9%
Prelim & Pre-Opp Expenses
including IDC and contingency
060.00 9%
Project Design & Management 010.00 2%
Total Capital Cost 648.00 100%

Cost of setting up a solar plant has seen 20% drop from the previous year. CERC attributes the cost drop mainly to the following

  • Civil and General works(58% drop)
  • Mounting Structures(52% drop)
  • Evacuation cost(43% drop)

Are you planning on setting up a solar plant? We offer end-to-end solar plant services with Project management and EPC services for solar projects from KW to MW scale, Visit our solar plant services for details

Also, see how you can earn up-to 15% by investing in Rooftop Solar Plants

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One thought on “Cost of setting up a 1MW Solar Plant in Andhra Pradesh

  1. How to Create a Passive Income Stream by Investing in a 1 MW Solar Plant in Andhra Pradesh – Maharshi Solar Powertech's Blog

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