Even though a 10 MW solar power plant cost is a significant investment, it's crucial to comprehend the specifics, like the land and funding, revenue and payback period, and solar panel depreciation. This page is intended for developers, investors, and industrial buyers who are considering utility-scale power projects.

10 MW Solar Power Plant Cost

A ground mounted 10 MW solar power plant cost between ₹35 to ₹45 crore, or ₹3.5 to ₹4.5 crore per MW (excluding the land). At the MW scale, the equipment pricing is more competitive than for a small plant though the cost would vary widely with the module technology, location and distance to the grid.

Consider this a planning-level quote, as the final costs will depend on:

• The module brand and technology (mono PERC, TOPCon or bifacial)
• Fixed-tilt versus tracker technology
• The distance to the nearest substation
• Site-specific conditions (soil, terrain, drainage)
• Whether the buyer is buying independently or from an EPC contractor

Get itemized quotations to make sure you are comparing similar products.

10 MW Solar Power Plant Cost For Land

Depending on the technology of the solar module used (better efficiency modules would require less land), the tilt angle, the topography, and the auxiliary requirements (inverter stations, transformers, road, fencing, a control center, and a switch yard), a 10 MW solar power plant cost around 40 to 50 acres. Purchasing or leasing the land is an alternative that requires less capital. Another important factor to take into account during the design process is a long-term lease agreement and a clear transfer of the change-of-land-use approval. The expenses are not covered by the equipment budget and differ greatly per state.

10 MW Solar Power Plant Cost: A Detailed Cost Breakdown

While the percentages of 10 MW solar power plant cost may vary depending on the project, the general allocation is outlined below:

How To Finance A 10 MW Solar Power Plant Cost

The total 10 MW solar power plant cost is usually very high and thus most utility-scale solar power plants are financed with a mix of debt and equity (typically 70:30, though this can vary between lenders). Typical financing options include:

• Term loan from banks and NBFCs (IREDA, PFC, REC)
• Equity from a sponsor (or infrastructure funds and strategic buyers)
• Lease or developer-led financing model
• Green financing (green bonds, ESG-linked loans)

Lenders would look at the debt service coverage ratio (DSCR, typically 1.2x or greater), the revenue collection mechanism (long-term PPA with a creditworthy customer), the dependability of the equipment suppliers and EPC contractor, and approvals pertaining to grid connectivity and land. In order to get different term sheets, interest rates would also fluctuate based on the borrower's credit profile and the project's risk.

Solar Power Plant Revenue and Payback Period

Depending on the location and design of the plant, a 10 MW solar power plant cost can produce 1.5 to 1.7 crore kWh of electricity annually. The offtake arrangement determines the revenue:

• PPA for utilities or discoms at about ₹2.5 to ₹3.5 per kWh: ₹4 to ₹5.5 crore annually.
• Before open-access fees and losses were 8 to 11 crore annually and for open access supply to industrial users were effective and approx 5 to 7 rupees per kWh.
• This implies an 8-11 year payback period (for tariff-based sales) and a 4-6 year payback period (well-structured captive). Equity IRRs are often in the low double digits, while project IRRs are also attractive with appropriate leverage.
• Solar power plants operations costs are lower and still should be factored in.
• Budget for O&M, cleaning, insurance, land lease, inverter servicing and degradation (approx. 0.4-0.7%) to arrive at the post-operations net revenue. Tariffs, open-access charges and banking rules vary by state and it should be modelled your plant according to the current local state policy instead of using an average.

Depreciation on Solar Panels in India

Depreciation is an important 10 MW solar power plant cost consideration in solar investments as it reduces the taxable income in the early years, and thus improves the post-tax returns.

Depreciation eligibility and applicable taxes

While considering 10 MW solar power plant cost you should also know that under Indian taxation rules, solar power generating systems and related equipment fall under the renewable energy block which historically offered a 40% depreciation on a written down value basis. The higher accelerated rate (80%) was cut down several years ago.

Your eligibility and application rate will vary based on the taxpayer's company and the tax regime, that is concessional tax. Companies opting for a concessional corporate tax regime now face restrictions on additional depreciation benefits. Income tax provisions have also been revised under the new Income Tax Act, confirming the current depreciation rates, block allocation and applicable regime conditions with a chartered accountant before modelling it.

How depreciation affects project economics

Since the rate of depreciation is high, a large amount of the plant cost is written-off in the first few years. For a profitable company, this reduces the tax liability and the effective payback. On the other hand, for a standalone special purpose vehicle with little taxable income in the initial years, the losses may be carried forward and benefit the subsequent years. Hence, the benefits of depreciation depend on the tax liability of the entity that owns the asset. This explains why industrial companies with steady revenues are attracted to captive solar.

Key Risks and Factors Affecting Project Returns

The returns on a 10 MW solar power plant project can vary due to multiple factors such as:

• Offtake risk: delayed payments or renegotiation of the PPA by the distribution companies
• Grid curtailment: reduced evacuation due to low demand or grid constraints
• Policy and duty risk: change in import duties, GST, open access charges or state-level policies
• Construction risk: delays due to land, right of way or approval issues
• Performance risk: lesser generation due to soiling, lower degradation rates
• Interest rate and currency risk: fluctuations in interest rates and exchange rates (especially for imported equipment)
• Tax risk: change in depreciation norms and corporate tax rules

A prudent financial model tests the downside scenarios and not just rely on the base case.

FAQs: 10 MW Solar Power Plant Cost