Solar power is becoming increasingly vital in India’s journey toward sustainable energy. With a growing commitment to renewable energy, India has made significant strides in expanding its solar power capacity. Currently, India ranks among the top countries with the highest installed solar capacity, thanks to government initiatives and financial incentives aimed at reducing dependency on fossil fuels. Solar power plants present various benefits, including substantial long-term energy savings, environmental impact reduction, and access to subsidies.

This blog will guide you through the process of setting up a solar power plant in India, covering steps such as costs, available subsidies, and essential considerations.

Solar Power Plant and Its Types

A solar power plant generates electricity by converting sunlight into usable energy. These plants rely on photovoltaic (PV) panels that absorb sunlight and convert it into direct current (DC) electricity, which is then converted to alternating current (AC) electricity using inverters. This electricity can then be fed into the power grid or used locally.

India offers several solar plant options to suit different needs:

  • Rooftop Solar Power Plants: These are commonly used in residential and small commercial setups, offering efficient space utilisation.

  • Ground-Mounted Solar Power Plants: Suitable for large land areas, these installations serve bigger industrial and commercial setups.

  • Utility-Scale Solar Farms: Large installations that generate substantial energy to meet grid demands, supporting national renewable targets.

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Step-by-Step Guide to Set Up a Solar Power Plant

Here is a simplified step-by-step process for setting up a solar power plant in India:

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  • Step 1: Feasibility Study and Site Selection
    Evaluate your land’s solar potential, taking into account sunlight exposure, land size, and proximity to the grid. Select sites that receive ample sunlight and are close to substations for efficient transmission.

  • Step 2: Obtain Necessary Approvals and Permits
    You’ll need various permits from state and central agencies. Approval typically involves clearances related to environmental impact, grid connectivity, and construction.

  • Step 3: Calculate the Solar Power Plant Cost
    Calculate costs, including solar panels, inverters, installation, and grid connection. The cost of a 1 MW plant may vary based on location and scale, with land and equipment being major factors.

  • Step 4: Apply for Subsidies on Solar Power Plants
    The Indian government offers several incentives, including central and state-level subsidies under schemes like PM-KUSUM, which target agricultural solar installations and grid-connected solar plants for rural use.

  • Step 5: Selection of Technology and Components
    Choose reliable components like high-efficiency solar panels, robust inverters, and mounting structures. Quality equipment ensures optimal performance and longevity.

  • Step 6: Installation and Commissioning
    The installation includes positioning panels, setting up inverters, and wiring the system. Engaging experienced contractors and ensuring compliance with safety standards is crucial.

  • Step 7: Maintenance and Monitoring
    Regular maintenance of panels and inverters, along with performance monitoring, helps maintain efficiency. Monitoring software can help you track energy output and address issues promptly.

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Two solar panel experts are monitoring a large solar plant system.

How much does Solar Power Plant Installation Cost?​

The cost of a solar power plant in India depends on several factors:

  • 1 MW Solar Plant: 1 MW Solar Plant: Typically costs between INR 3.5 to 4.5 crore, with land acquisition, equipment, and installation as significant cost factors.

  • 5 MW Solar Plant: Larger plants can leverage economies of scale, but costs also vary based on location.

  • Utility-Scale Projects: Costs here are substantial due to the need for larger land parcels, but such projects benefit from higher energy production.

Return on investment (ROI) for solar power plants in India generally ranges between 5 to 7 years, depending on factors like energy savings and available subsidies. For instance, with a 1 MW plant, businesses can save approximately INR 60-70 lakh per year on energy costs, making the investment worthwhile after subsidies and incentives.

Setting up a solar power plant involves challenges like:

  • 1

    Land Acquisition: Finding suitable land with adequate sunlight and proximity to the grid can be challenging.

  • 2

    High Initial Costs: Despite subsidies, the upfront investment can be substantial. Plan financing options or consider partnerships.

  • 3

    Regulatory Hurdles: Navigating the regulatory landscape and obtaining approvals can be time-consuming.

To overcome these challenges, consider hiring experienced contractors and conducting a detailed site assessment to understand solar potential and local regulations.

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FAQs

Costs for a 1 MW solar plant range from INR 4 to 5 crore, depending on factors like land, equipment, and installation.

To set up a solar power plant, you will require approvals like land-use permissions, environmental clearances, grid connectivity agreements, and construction permits from relevant state and central regulatory bodies.

Net metering allows solar plant owners to receive credit for excess electricity sent to the grid. This offsets electricity costs, making it a cost-effective solution by reducing monthly utility bills.

Rooftop solar power plants are ideal for residential setups, as they maximise available roof space, are relatively easier to install, and allow homeowners to generate their own electricity and reduce their utility bills.

Yes, the PM-KUSUM scheme offers incentives for solar installations aimed at farmers and rural areas, including subsidies for solar pumps and grid-connected solar plants for agricultural purposes.

Author : Gaurav Bector

Gaurav Bector, Vice President of the EPC division at Alpex Solar, is an Electrical Engineer with 32+ years of experience in the energy sector. He has led business development in smart energy systems, grid automation, and green solutions with top firms like ABB, Siemens, and Alstom. With global expertise across Europe, South Asia, and the Middle East, Gaurav excels in leadership, operations, sales, engineering, and project management.

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