• Devendra Shinde

What is The cost of a Solar Roof Top Power Plant and how much are the returns on it?

Updated: Dec 19, 2018

Author:Devendra Shinde Company:Deeva Enterprises www.deevasolar.com

We, like any other EPC company, always get a question on 'how much will it cost to build a Solar Plant of X capacity and what is a return on it?'. For the part of cost, the answer is similar if you ask a Construction company ‘how much will it cost to build a house of X sq ft floor area with Y floors and Z bedrooms ?’. First he will ask you get your plan and design finalised by the Architect, decide your flooring for each floor, design for toilet, kitchen and hall, your parking need and Garden area before coming to the estimated cost! Building a Solar plant may not be that complex but it needs same approach. One has to choose and pick up the components based on the money they wish to put in this investment. To understand this more see how selection of each component can impact your cost estimates.

1. Selection of Panels (PV Modules) - Tier1 PV manufacturing companies (like Vikram, Panasonic etc ) charge higher than the new manufacturers in this business. This is due to the fact that you are more likely to have service support from the Tier1 companies for 25-27 years ( Performance warranty period of the Panels) than newly formed companies. We initially used one local company’s panels. The quality of panels was proven by good results of the plant. But the company now is allmost closed and we will have challenge in fixing future issue with the panel in those plants. So now we recommend people to choose for Tier 1 company panels, unless they are ok to have manageable risks with their investments and buy low rate new company’s panels. Some EPC companies just get readily available panels from Chinese companies directly. This Company which procures the Solar Plant components and build plants are “Engineering Procurement and Commissioning” companies. They themselves do not manufacture any components. Such panels are cheaper, but this has long term risk (who will support the panel issues in future, if the EPC company is no more in next few years).

The cost of Panels also depends on the type of panel you select ( main types are Mono, Poly/Multi, HIT etc). HIT are high efficiency panels where per watt cost will be around 20Rs/watt higher than Poly type. Efficiency means capability of the panels to convert the sunlight that falls on them into Electricity. Higher the efficiency, more is output from the panel and hence higher is the cost.

2. Type of inverter: Again there are different brands and the reputed ones costs you more. We suggest to buy you the Inverter which has local support. Like for any other Electric equipment Inverters may face some hardware issues and hence it’s better to have support available locally, So there are basic models of inverters as well as some advance models with features like Wifi configuration that helps online tracking of the performance of the inverter. So if you want better support and more features, your cost will go up.

3. Support Structure: Depending upon your terrace area you may go for a standard one or heightened/galvanized. In some states where Subsidy is available, Structure specifications are required to be standard. Our observation is for bungalows, the owners many a times do not wish to disturb the over all look and feel so they wish to put the plant without disturbing their interior and projected areas. Also for some housing comoplex, to use the complete terrace area standard support is not sufficient and heightened structures are necessary. Thus your cost of structure will vary based on the roof space and lay out.

4. Other components including cables, Lightening Arrester, Array Junction, ACDB, DCDB also have various Makes and brands, hence prices vary.

5. Batteries: Along with PV modules and inverter Batteries are major cost components and need to be carefully chosen for better performance. For Solar plants many battery manufacturers have come with various models and the warranty as well depends upon the model. The reputed brands are offering 5 years warranty with additional costs.

6. Cabling of Load: Some times during Electric Audits we found that the internal cabling of the residence or industries have issues ( old and poor cables, current leakages etc) which impacts the utilisation of the plant. We recommend to fix such issues at the time you install the solar plant. Also some times people replace old bulbs (replace with LEDs), fridge, A/Cs, water pumps for reducing the over all Electricity consumption . People take it as a cost of plant, but it is really not.

The components given above are common but thereare other design decisions like use of micro-inverters, rotating Structures etc which would influence the costs a lot.

Thus, I hope it makes clear that you always end up picking up the components that can build the plant in line with your budget. Hence there is no single figure answer to the cost of a plant of X capacity. If you give a target price to the EPC contractor he will try to fit the plant design in that price if it’s good price for his/her work. But if you push him to lower the price, you are actually asking him to buy low rated items. So discuss the pricing and components before arriving at your budget and final design of the plant.

We have seen very poor support structures which ultimately resulted in accidents at the plant in windy and rainy situation. Why to compromise the structure that supports Panels with life of 25 plus years ? Some times we have seen the contractors compromising security features because of cost pressures. We strictly recommend not to compromise on the security features of the plant like strong support structure, DC fuse, Lightening arresters, earthing etc.

So, if you ask us for quote without detailed information we provide you a range of price. We can give accurate estimates once we have good inputs captured after detailed discussions with our clients.

About ROI

At present, In India, we have different rates applicable for different states and for different Electricity Providers ( State Electricity Boards, Tata, Reliance etc). So RoI will be different from place to place.

In general, for On-Grid Plants of size 10KW and above (where rate of loacal Grid is around -12 Rs/Unit for utilization bracket of 300 units and above per month), EPC company will show you RoI period of 3 to 4 years for Residential projects and for commercial premises it will be 1 year less than that due to the accelerated depreciation benefits available for Solar Plants. For smaller plants , where per unit rate is less than 10 Rs, ROI period can be more than 7 years. So unless you really care for Green Energy, we can not give you justification of investment in Solar Power just based on commercial RoI.

For battery based as well, the period for RoI will be same if you consider that such plant actually takes away need of additional Generator (maintenance & Diesel ) or UPS ( Invertor and Batteries) costs.

RoI will vary from plant to plant, even if they are built with same components and of same size. This is because –

1. When you move on Solar Power, you need to understand its generation patterns and plan its utilisation properly. It’s not like using Electricity from Grid but it’s using water stored in your storage tanks. Customers who have understood this, they have quicker realisation of RoI.

2. Weather plays a key role in efficiency of the plant. There may not be trees and buildings that cast shadows on plant site when it’s built, but slowly we see such developments with passing years. Dust level is also key factor that impacts the efficiency of the Plant.

3. Delays from Local Electricity Providers in providing Net meter installation and support to implement billing of net meter readings has impacted many installations.

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