Solar Power Plant

Solar power is the conversion of sunlight into electricity, either directly using photovoltaic (PV), or
indirectly using concentrated solar power. Concentrated solar power systems (Unified Solar) use
lenses or mirrors and tracking systems to focus a large area of sunlight into a small beam.
Photovoltaic cells convert light into an electric current using the photovoltaic effect.

The International Energy Agency projected in 2014 that under its "high renewables" scenario, by
2050, solar photovoltaic and concentrated solar power would contribute about 16 and 11 percent,
respectively, of the worldwide electricity consumption, and solar would be the world's largest source
of electricity. Most solar installations would be in China and India.

Photovoltaic’s were initially solely used as a source of electricity for small and medium-sized
applications, from the calculator powered by a single solar cell to remote homes powered by an off-
grid rooftop PV system. As the cost of solar electricity has fallen, the number of grid-connected solar
PV systems has grown into the millions and utility-scale solar power stations with hundreds of
megawatts are being built. Solar PV is rapidly becoming an inexpensive, low-carbon technology to
harness renewable energy from the Sun.

Commercial concentrated solar power plants were first developed in the 1980s. The 392  MW Ivanpah
installation is the largest concentrating solar power plant in the world, located in the Mojave Desert of
California.
Mainstream technologies

Many industrialized nations have installed significant solar power capacity into their grids to
supplement or provide an alternative to conventional energy sources while an increasing number of
less developed nations have turned to solar to reduce dependence on expensive imported fuels. Long
distance transmission allows remote renewable energy resources to displace fossil fuel consumption.
Solar power plants use one of two technologies:

 Photovoltaic (PV) systems use solar panels, either on rooftops or in ground-mounted solar
farms, converting sunlight directly into electric power.
 Concentrated solar power (CSP, also known as "concentrated solar thermal") plants use solar
thermal energy to make steam, that is thereafter converted into electricity by a turbine.

Schematics of a grid-connected residential PV power system

A solar cell, or photovoltaic cell (PV), is a device that converts light into electric current using the
photovoltaic effect. The first solar cell was constructed by Charles Fritts in the 1880s.[4] The German
industrialist Ernst Werner von Siemens was among those who recognized the importance of this
discovery.[5] In 1931, the German engineer Bruno Lange developed a photo cell using silver selenide
in place of copper oxide,[6] although the prototype selenium cells converted less than 1% of incident
light into electricity. Following the work of Russell Ohl in the 1940s, researchers Gerald Pearson,
Calvin Fuller and Daryl Chapin created the silicon solar cell in 1954.[7] These early solar cells cost
286 USD/watt and reached efficiencies of 4.5–6%. [8]

Conventional PV systems

The array of a photovoltaic power system, or PV system, produces direct current (DC) power which
fluctuates with the sunlight's intensity. For practical use this usually requires conversion to certain
desired voltages or alternating current (AC), through the use of inverters.[3] Multiple solar cells are
connected inside modules. Modules are wired together to form arrays, then tied to an inverter, which
produces power at the desired voltage, and for AC, the desired frequency/phase. [3]

Many residential PV systems are connected to the grid wherever available, especially in developed
countries with large markets. [9] In these grid-connected PV systems, use of energy storage is optional.
In certain applications such as satellites, lighthouses, or in developing countries, batteries or
additional power generators are often added as back-ups. Such stand-alone power systems permit
operations at night and at other times of limited sunlight.
Concentrated solar power

A parabolic collector concentrates sunlight onto a tube in its focal point.Concentrated solar power
(CSP), also called "concentrated solar thermal", uses lenses or mirrors and tracking systems to focus a
large area of sunlight into a small beam. Contrary to photovoltaics – which convert light directly into
electricity – CSP uses the heat of the sun's radiation to generate electricity from conventional steam-
driven turbines.

A wide range of concentrating technologies exists: among the best known are

 the parabolic trough,

A parabolic trough consists of a linear parabolic reflector that concentrates light onto a receiver
positioned along the reflector's focal line. The receiver is a tube positioned right above the middle of
the parabolic mirror and is filled with a working fluid. The reflector is made to follow the sun during
daylight hours by tracking along a single axis. Parabolic trough systems provide the best land-use
factor of any solar technology.[12] The SEGS(Solar Energy Generating Systems)plants in California
and Acciona's Nevada Solar One near Boulder City, Nevada are representatives of this technology. [13]
[14]
  the compact linear Fresnel reflector,

Compact Linear Fresnel Reflectors are CSP-plants which use many thin mirror strips instead of
parabolic mirrors to concentrate sunlight onto two tubes with working fluid. This has the advantage
that flat mirrors can be used which are much cheaper than parabolic mirrors, and that more reflectors
can be placed in the same amount of space, allowing more of the available sunlight to be used.
Concentrating linear fresnel reflectors can be used in either large or more compact plants.
  the Stirling dish

The Stirling solar dish combines a parabolic concentrating dish with a Stirling engine which normally
drives an electric generator. The advantages of Stirling solar over photovoltaic cells are higher
efficiency of converting sunlight into electricity and longer lifetime. Parabolic dish systems give the
highest efficiency among CSP technologies.[17] The 50 kW Big Dish in Canberra, Australia is an
example of this technology.[13]
  the solar power tower

A solar power tower uses an array of tracking reflectors (heliostats) to concentrate light on a central
receiver atop a tower. Power towers are more cost effective, offer higher efficiency and better energy
storage capability among CSP technologies.

Various techniques are used to track the sun and focus light. In all of these systems a working fluid is
heated by the concentrated sunlight, and is then used for power generation or energy storage. [10]
Thermal storage efficiently allows up to 24-hour electricity generation.
Hybrid systems

A hybrid system combines PV and CSP with one another or with other forms of generation such as
diesel, wind and biogas. The combined form of generation may enable the system to modulate power
output as a function of demand or at least reduce the fluctuating nature of solar power and the
consumption of non renewable fuel. Hybrid systems are most often found on islands.

 CPV/CSP system

A novel solar CPV/CSP hybrid system has been proposed, combining concentrator photovoltaics with
the non-PV technology of concentrated solar power, or also known as concentrated solar thermal

 ISCC (Integrated solar combined cycle)

The Hassi R'Mel power station in Algeria, is an example of combining CSP with a gas turbine, where
a 25-megawatt CSP-parabolic trough array supplements a much larger 130 MW combined cycle gas
turbine plant. Another example is the Yazd power station in Iran.
  PVT(Photo Voltaic) system

Hybrid PVT, also known as photovoltaic thermal hybrid solar collectors convert solar radiation into
thermal and electrical energy. Such a system combines a solar (PV) module with a solar thermal
collector in an complementary way.

1. Anti -reflective coating

2. Ethylene vinyl acetate encapsulate

EVA is an elastomeric polymer that produces materials which are "rubber-like" in softness and

flexibility. The material has good clarity and gloss, low-temperature toughness, stress-crack
resistance, hot-melt adhesive waterproof properties, and resistance to UV radiation

3. Solar PV Cells
4. Ethylene vinyl acetate encapsulate
5. Backsheet of PVF

PVF has low permeability for vapors, burns very slowly, and has excellent resistance
to weathering and staining. It is also resistant to most chemicals, except ketones and esters.

6. Heat exchanger of copper

7. Insulation of polyurethane
  CPVT system

A concentrated photovoltaic thermal hybrid (CPVT) system is similar to a PVT system. It uses
concentrated photovoltaics (CPV) instead of conventional PV technology, and combines it with a
solar thermal collector.

 PV diesel system

It combines a photovoltaic system with a diesel generator.[19] Combinations with other renewable are
possible and include wind turbines

 PV-thermoelectric system

Thermoelectric or "thermo voltaic" devices convert a temperature difference between dissimilar

materials into an electric current. Solar cells use only the high frequency part of the radiation, while
the low frequency heat energy is wasted. Several patents about the use of thermoelectric devices in
tandem with solar cells have been filed. [21] The idea is to increase the efficiency of the combined
solar/thermoelectric system to convert the solar radiation into useful electricity.
 Requirements for setting up a solar power plant

 How much land is required to setup a 1MW solar power generation Unit?

The land required for a 1 MW power plant setup is around 4.5-5 acres for Crystalline technology and
around 6.5-7.5 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 is the annual energy generated from a 1 MW Solar Power plant?

The usual benchmark for energy generated from a 1 MW Solar Power plant is considered as 1.5
Million units. This is only a benchmark and should not be considered as the actual output for a given
location. The amount of actual energy generated from a Solar Power Plant in an year depends on both
internal and external factors. External factors which are beyond the control of a Solar developer can
include the following:

 Number of sunny days

 Solar Irradiation
 Day Temperatures
 Air Mass

The output also depends on the following internal factors all of which are within the control of a Solar
Developer:

 Plant Location
 Usage of Solar Tracking systems
 Quality of equipment used
 Workmanship of the EPC contractor
 O&M activities

 What are the various modes under which we can setup a Solar Power plant?

The various modes under which a Solar Power plant can be setup depends on the specific
requirement. All the following are valid modes and the costs for each kind of system varies based on
various factors:

 Off-Grid Captive Consumption for domestic premises

 Off-Grid Captive Consumption for commercial premises
 Grid Connected (Net Metered) Captive Consumption for domestic premises
  Grid Connected (Net Metered) Captive Consumption for commercial premises
 Sale of Power generated to local Distribution Company (DISCOM)
 Sale of Power generated to 3rd Party consumer (Industry or Commercial entity)

What is the cost of setting up a Rooftop Solar Power plant for domestic or commercial use?

Rooftop Solar Power plants can be broadly categorized into Battery-based and Non-Battery based
systems. The benchmark cost set by MNRE for the year 2013-14 for these systems are Rs.90-100 per
W for Non-Battery based systems and Rs.170-210 per W for Battery-based systems.

What size Solar Power plant is required for domestic or commercial use?

Identifying the Solar Power plant size for your domestic or commercial premises depends on the
following factors:

 Wattage of appliances to be run on Solar

 Monthly energy consumption from these appliances
 Energy Backup or Days of Autonomy required
 Roof space available for plant setup

Based on these factors, the power plant sizing can be accordingly done at your end.
 

Permissions and Bank Loans

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. While 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:

1. Industrial Clearance
2. Land conversion (Agricultural to Non-Agricultural)
3. Environmental Clearance Certificate from APPCB, Hyderabad
4. Contract labour license from AP Labour Department
5. Fire Safety certificate from AP Fire Department
6. Latest tax receipt from the Municipal/Gram Panchayat for the factory land.
7. Auditor compliance certificate regarding fossil fuel utilization
8. Approval from Chief Electrical Inspector
9. 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:

10. Land purchase

11. Power Evacuation arrangement permission letter from DISCOM
12. Confirmation of Metering Arrangement and location
13. ABT meter type, Manufacture, Model, Serial No. details for Energy Metering.
14. Copy of PPA (important as Preferential PPA projects are not eligible for REC
mechanism)
15. Proposed Model and make of plant equipment
16. Undertaking for compliance with the usage of fossil fuel criteria as specified by
MNRE
17. Details of Connectivity with DISCOM
18. Connectivity Diagram and Single Line Diagram of Plant
19. Details of pending court cases with APERC, Supreme Court of India, High Court of
A.P. or any other courts
20. 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.

Can Solar Power developers avail loans from banks for Solar Power plant setup? What is the loan %
and what criteria does a bank/lending institution look for?

There are 2 kinds of Financing mechanisms that are usually discussed – Recourse Financing and Non-
Recourse Financing. Recourse Financing requires collaterals and other extensive guarantees from the
Solar developer who wishes to avail loan. Non-Recourse Financing, on the other hand, does not
require any additional collateral as the Asset or Power Plant itself is the collateral in this case.
Recourse Financing is the prevalent mechanism in India currently owing to lack of confidence of
banks in the Power and Solar Power sector. The typical Debt-Equity Ratio (Loan to Investment Ratio)
for Solar Power plants is 70:30. And the typical collaterals required for a 70% project cost loan could
be in the range of 40-60% project cost. This, however, varies from bank to bank as each bank has its
own risk perception/mitigation strategy, exposure targets to various sectors and Non-Performing
Asset (NPA) limits.

Setup Costs and Power Sale Tariff 

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 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.

The table below indicates CERC determined benchmark cost for Financial Year 2014-15.
 

What would be the O & M cost?

Central Electricity Regulatory Commission (CERC) benchmark costs for O&M is Rs.12.3
lakhs/year/MW for 2014-15 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.

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 3rd 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
3rd party. These charges vary from State-to-State and DISCOM-to-DISCOM and even based on
voltage levels.

RECs and Carbon Credits (CERs)

Which kinds of Solar Power plants are eligible for REC benefits?

Solar Power Plants need to be Grid-Connected on order to avail REC benefits. Though there have
been recommendations on multiple occasions that Off-Grid Solar Power plants be made eligible for
RECs, the proposal is still under discussion. Solar Power plants setup under the following 3 modes are
eligible for REC benefits:

 Captive Power plants

 Sale of power to Govt. at APPC
 Sale of power to 3rd party at mutually agreed price

Captive Power Plants are eligible for RECs subject to the condition that Concessional/Promotional
Transmission or Wheeling Tariffs and/or banking facility benefit are not availed. Also, Solar Power
plants setup under Preferential Tariff schemes are not eligible for RECs. Check out more information
on RECs on our REC page here – http://efficientcarbon.com/services/energy/renewable-energy-
certificates

 
Is there a minimum size for Solar Power plants to be eligible for RECs?

As per the Second Amendment of REC Principal Regulations – 2013, there is no lower limit for Solar
Power plants to be eligible for RECs. Though it previously stated that 250 KW is the minimum size
for Solar Power plants to be eligible for RECs, the same has been removed as part of the above stated
amendment.

Can CDM benefits (Carbon Credits) be availed for a Solar Power plant?

Yes. REC Mechanism and CDM are mutually exclusive and hence a power developer can claim CDM
benefits (Carbon Credits) also. However, it is to be noted that the current trading prices of Carbon
Credits or Certified Emission Reductions (CERs) at the European ETS system is less than 0.7 Euro
which are pretty low compared to the 15-20 Euro trading prices a few years back. At these prices,
getting a Solar project registered under CDM mechanism does not make any sense as the payback for
the expenses in the process itself takes several years. Unless the Solar Power Plant is of size 10 MW
or more it does not make financial sense to go for Carbon Credits (CERs).

Benefits for Solar Power plants

What kind of Central/State benefits are available for Solar Power plant setup?

Solar plants can be categorized into 2 broad categories – Grid Connected and Off-Grid plants. The
usual Govt. support available for an Off-Grid plant is a Capital Subsidy of 30% on the project cost
upto a maximum size of 500 KW. This can be claimed by the Manufacturer/Supplier/EPC Contractor
(should be an MNRE accredited supplier) on behalf of the customer. The list of MNRE accredited
suppliers (all across India) can be downloaded from http://mnre.gov.in/file-
manager/UserFiles/list_channelpartners_sp_jnnsm.pdf

Subsidy is not available for Grid Connected plants that engage in sale of power either to the local
DISCOM or a 3rd party. Following are the benefits a Solar Power Developer involved in Sale of
Power Generated can avail:

 Accelerated Depreciation – Upto 90% of asset value with 80% depreciation allowed in the
first year.
 10 years Tax Holiday – Tax holiday can be availed for 10 years during which time Minimum
Alternate Tax is still applicable (19.9305%) which can be offset against tax payable later.
 Other State specific exemptions which vary from state to state.

Can Accelerated Depreciation benefits be claimed by Solar Power Developers?

Yes. Accelerated Depreciation benefits can be claimed by Off-Grid and Grid-Connected Solar Power
Developers in order to offset taxes on profits from their connected businesses. Typically, 90%
depreciation is allowed with 80% allowed in the first year.
 

Can Capital Subsidy be claimed for a 1 MW Solar Power plant (or greater size)?

No. Capital Subsidy cannot be claimed for plants beyond 500 KW size. Also, capital subsidy is made
available only to Off-Grid and Decentralized Solar Power applications and not Grid Connected Plants
that are in the business of selling the generated power.

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. Subsidy will not be
applicable in case of sale of power. 

Setting up Solar Power plant in Andhra Pradesh

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 (in case of Captive Generating Plants and Plants setup under Preferential Tariff basis):

 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 land