You are on page 1of 3

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
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 utilitys 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


Capital Cost
(Rs Lakh/MW) % of Total Cost

PV Modules



Land Cost



Civil and General Works



Mounting Structures



Power Conditioning Unit



Evacuation Costs



Prelim & Pre-Opp Expenses

including IDC and contingency 060.00


Project Design & Management



Total Capital Cost

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

Posted on 05/06/2014 by Maharshi Solar. This entry was posted in Andhra Pradesh, EPC,General, HowTo and tagged 1MW Solar Plant, Andhra Pradesh 1MW Solar Plant, AP Solar Plant, India Solar, Solar Plant
Cost, Solar Plant ROI,