Business Models We Offer

Business Models

 In India principally there are two major business models: 
• CAPEX – capital expenditures are provided by the rooftop owner; 
• RESCO – capital expenditures are covered by third party. 

1. CAPEX Model (One Time Investment)

 CAPEX mode is the most common business model for solar deployment in India. In this model the consumer purchases the solar system, by making 100% of the payment upfront or financing the system, often through a bank.

In CAPEX model (Capital Expenditure will be yours) you will pay the complete system 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 for your home or small business and your instillation size is less than 100kW, you have the one and only way to get it installed is CAPEX model.

05_bus5 Business Modes
05_bus5 Business Modes
05_bus5 Business Modes
2. RESCO (Renewable Energy Service Company) Model
Under this model, a RESCO developer finances, installs, operates and maintains the rooftop solar power plant. The developer signs an agreement with the rooftop owner. The rooftop owners may consume the electricity generated, for which they have to pay a pre-decided tariff to RESCO developer on a monthly basis for the tenure of the agreement. Based on the consumption choice and requirement, the model is further divided into two types – Rooftop Leasing and Power Purchase Agreement (PPA).
A ) Rooftop Leasing Model
(Under Gross Metering) 
Under this arrangement, the RESCO developer leases the rooftop and pays a fixed lease/rental to the Land/building owner over the time of the lease period for installing the solar panels of the rooftop. The RESCO developer exports the solar energy to the utility at a predetermined feed-in-tariff (FiT) approved by the regulator.
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05_bus5 Business Modes
05_bus5 Business Modes

B) OPEX Model (Pay per Unit with Power Purchase Agreement)

In OPEX model (Operation expenditure will be yours) System Instillation 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. 5.50 to Rs.10) are depend on your installation size, PPA time period and your company credit rating. If you want to install solar power plant for your institute, business or industry and your installation size is above 100kW. You can go for OPEX model.
05_bus5 Business Modes
05_bus5 Business Modes
05_bus5 Business Modes

OPEX Model (Power Purchase Agreement)

You might not want to build your own solar plant, but rather buy just 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 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 15- 25 years), the price (tariff) for the power from the solar plant and annual escalations (if any). This is also called the OPEX model.Power Purchase Agreement.

05_bus5 Business Modes
05_bus5 Business Modes
05_bus5 Business Modes

Solar Power Plant Detail, ROI & Price for 1Mw

Generate Electricity with Solar Power Plant:

Today, anyone can set-up a Solar Power Plant with a capacity of 1KW to 1MW on a rooftop space. The Govt. of India (MNRE) latest guidelines state that “Now anyone can generate electricity through solar power plant and surplus electricity can be export through Net-metering system. The installation of net-metering at the site will connect it to grid via Sate Electricity Board or Distribution Companies. Ministry of New and Renewable Energy (MNRE) and State Nodal Agencies are also providing 30%-70%  Subsidy Benefits for residential, institutional and non-profit organisations.

                                     05_bus5 Business Modes

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

Investment Model for 1 MW Plant

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:

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
Depreciation5.28%
Corporate Tax30.28%
Minimum Alternate Tax18.38%
Project Cost450 Lakh
Debt355 Lakh
Equity

95 Lakh

 

Financial Model 1MW Solar Plant 

 For ten years are as below (Lakh):

Years2018201920202021202220232024202520262027Total
Revenue113.5113.5113.4113.4113.3113.2113.2113.12113.1112.91133
Operational Expenses888888888880
Bank Interest Payment57.151.846.44135.630.224.919.514.18.7330
Depreciation34.334.334.334.334.334.334.334.334.334.3343
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)2.73.74.75.76.87.78.79.710.811.872
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
Depreciation34.334.334.334.334.334.334.334.334.334.3343
Bank Debt Service amount41.3741.3741.3741.3741.3741.3741.3741.3741.3741.37

413

1MW Solar Plant Balance Sheet

INCOMEAMOUNTEXPENDITURE AMOUNT
Total Revenue for 10 years113,300,000Operational Expenses8,000,000 
  Bank Interest Payment33,000,000 
  Depreciation34,300,000 
  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 Income113,300,000  113,300,000

 

Depreciation34,300,000
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

Scope of Solar Energy in India:

Solar Enegy India with one of the largest distributed portfolio of operating solar power projects pan India, has demonstrated that solar power can work in meeting India’s growth objectives in a sustainable manner.Solar Enegy India builds, owns and operates solar power plants all over India under long term power purchase agreements that insures its customer’s uninterrupted and reliable source of clean energy at affordable prices. With each solar power asset that Solar Enegy India builds, it helps in promoting inclusive growth and contributes to the economic development of the local communities by generating reliable power and generating income through employment creation.

You could also be a part of this social and economic development if you associate with Solar Enegy India to identify waste/ barren lands for solar power development. Interested parties/ companies preferably owners who want to sell or lease their land in india can submit the information below to associate with us. Please note that the size of the land must be 4-100 acres and minimum term for lease arrangement must be 33 years.

FAQs about 1MW solar plant

How much kilowatts or watts are in 1 megawatt?

1 megawatt is equal to 1,000 kilowatts or 10,00,000 watts.

 

What is the average generation of 1 MW solar power plant?

1kW solar system produces 4 units average per day throughout the year. Accordingly, 1MW solar power plant produces 4000 units per day average.

 

What is OPEX model?

OPEX (Operating Expenses) model is also called Power Purchase Agreement. In this model, Solar System Installation Company will install complete system at their own cost through an agreement for 10-25 years. And you will have to pay per unit cost on monthly basis.

 

What is CAPEX model?

In CAPEX (Capital expenditure) model, the installation cost of the solar system will be completely yours. You will have to pay the cost to Installation Company in one shot. After paying the installation cost, this would be your own solar plant.

 

Which model is better OPEX or CAPEX?

Both models are good. If you are a cash rich company, you should go for CAPEX. In case of shortage of investment OPEX model is better. Because if you choose CAPEX model then you will have to pay heavy amount of money in a single shot. But in OPEX model you can pay per unit cost on monthly basis for 10-25 years.

 

1 MW solar power plant is suitable for which kind of business?

Where the daily consumption of electricity is more than 4000 units.

 

Can I export excess production of electricity to government?

Yes off course, you can export the excess amount of generated electricity to government (in the grid) through net metering. And government will adjust it in your upcoming electricity bills.

 

How can I Install a solar power plant to sell electricity to government?

Govt. of India release the tenders for PPA based solar power plant. You need to bid with lowest per unit price in such tenders for the same.

 

What is the estimated cost of 1 MW solar power plant?

The estimated cost of 1 MW solar power plant is approx. 4 crore.

 

Where should I install 1 MW solar plant?

You can install 1 MW solar PV plant at any shadow free area where the sunlight can come without any barrier. For installing 1 MW solar plant 2.5 acre area is required.

 

How much solar panel is required in 1 MW solar system?

Approximate 3000 panels of 335 watt each.

 

How much electricity can a 1 MW solar power plant produce?

1 megawatt solar power plant can generate 4,000 units per day as an average. So accordingly it generates 1,20,000 units per month and 14,40,000 units per year.

 

Is it difficult to maintain the efficiency of such a big power plant?

No, it is not difficult to maintain the efficiency of 1 MW solar plant. By cleaning solar panels time to time with solar panel cleaning kit, the efficiency level of solar panels can be maintain easily.

 

How much area is required to install 1 MW solar plant?

Normally, 1 KW solar plant is requires 6 square meter area. Accordingly if you want to install 1 MW solar PV power plant then 6000 square meter (+ shadow gap) area will be required.

 

How can we install 1 MW solar PV plant?

For installing 1 MW solar power plant, you can contact us.