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Financial analysis of 1 MW Solar PV plant

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This presentation presents financial analysis if ! MW solar PV plant. The estimated inputs are based on 2015 approximate figures of Indian market.

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Financial analysis of 1 MW Solar PV plant

  1. 1. MW Scale Solar PV Power Plant
  2. 2. Background Solar energy is free source of energy Solar radiation on earth surface per hour is equal to total power consumption of earth for whole year. Grid power in India is polluting, unreliable and inefficient Solar energy is a renewable, clean alternative to fossil fuels. solar energy is converted into electricity by using either photo- voltaic or solar thermal
  3. 3. A modest 2.5kw solar power system can have over its lifetime equivalent to 300 barrels of oil not produced 270,000 miles not driven 1,100 lbs of acid rain emissions not discharged 550 lbs of smog emissions not produced 220,000 lbs of greenhouse gases not emitted equivalent to planting 500 trees. Solar Energy vs Convectional Energy
  4. 4. •Jawaharlal Nehru National Solar Mission (MNRE, Govt of India) launched in, 2010 by the Prime Minister, a target of deploying 20,000 MW of grid connected solar power by 2022. It is enhanced by new government to 100,000 MW. Target by 2022 Old Revised •Solar power 20,000 MW 100,000 MW •Wind Energy 38500 MW 60,000 MW • Others 13500 MW 15,000 MW •Total 72,000 MW 175,000 MW
  5. 5. Incentives to Solar power plant • Various incentives offered by central and state government, few of them are • Benefit in land registration for solar power plant • 15-30 % subsidy for sanctioned project for equipments. • Support in grid connectivity • Depreciation benefits
  6. 6. 1MW SPV Power Plant : Initial casting Sr No Item Unit @ rate Cost (lac) 1Land 6 Acre 600000 36 2Modules 1100000Watt 33 363 3Civil Structure 60,500Kg 66 44 4Inverter 1100000VA 11 121 5Transformer 1 27,00,000 27 6Protective devices 1 10 7Wires, Cables 10 8SCADA/RMS 10 9Installation 10 10Legal & official work 24 11Grid Evacuation 10 12Execution & commisioning 30 Total 695
  7. 7. 1MW SPV Power Plant : Financial Plant Capacity 1000 KW Plant Cost (in lacs) 0.695 lac/KW 695 Equity 30% 208.5 Debt 70% 486.5 Interst rate 12% 1.01 Payment Period (yrs) 9 108 EMI 7.3871 Maintenance & Manpower 3% P V of Inverter Cost 132 Price reduction rate of Inverter 2% • Area Shade free 3 Acre Only 80% of the input area is considered to adjust for potential shaded areas • Maintenance & Manpower 4% of project cost, with annual escalation of 5% • Inverter lifespan is 10 years, with 2.00% annual cost reduction (110 % of capacity, @Rs 11/W) • Accelerated depreciation is at 80.00%. It is assumed that the entire benefit of accelerated depreciation can be claimed • Corporate tax rate 35% • Plant generation 4.7 kWh per KW per day, with 1% annual panel degradation and 10% losses10% • Debt service calculation assumes 70.00% debt; 2.00% interest rate; 9-year loan term with no moratorium; repayable monthly through EMI • Tariff 7.5 /KWH through PPA for 12 years • Annual inflation 7%
  8. 8. 1MW SPV Power Plant : Financial in lacs Year Plant Expenditure Net Yearly Expend Generation return by power selling REC Return @ 3000/ MWH Net Return Present value of Net return Equity/ Inverter replaceme nt Mainten ance Debt Int Debt Prin Power Unit (MWH) Tariff Rs per KWH earning 0 208.50 -208.50 -208.50 -208.50 -208.50 1 20.85 56.66 31.99 -109.50 1478 7.50 110.85 1.35 1.35 1.27 2 21.89 52.60 36.04 -110.54 1463 7.50 109.73 -0.81 44.00 43.19 37.72 3 22.99 48.03 40.61 -111.63 1449 7.50 108.68 -2.96 43.00 40.04 32.69 4 24.14 42.88 45.77 -112.78 1434 7.50 107.55 -5.23 43.00 37.77 28.81 5 25.34 37.08 51.57 -113.99 1420 7.50 106.50 -7.49 43.00 35.51 25.32 6 26.61 30.54 58.11 -115.26 1406 7.50 105.45 -9.81 42.00 32.19 21.45 7 27.94 23.17 65.48 -116.59 1392 7.50 104.40 -12.19 42.00 29.81 18.57 8 29.34 14.86 73.78 -117.98 1378 7.50 103.35 -14.63 41.00 26.37 15.35 9 30.80 5.50 83.14 -119.45 1364 7.50 102.30 -17.15 41.00 23.85 12.97 10 108.29 32.35 0.00 0.00 -140.63 1350 7.50 101.25 -39.38 41.00 1.62 0.82 11 33.96 -33.96 1337 7.50 100.28 66.31 40.00 106.31 50.51 12 35.66 -35.66 1324 7.50 99.30 63.64 40.00 103.64 46.02
  9. 9. 1MW SPV Power Plant : Financial in lacs Year Plant Expenditure Net Yearly Expen Generation return by power selling REC Return @ 3000/ MWH Net Return Present value of Net return Equity/ Inverter replacem ent Mainten ece Debt Int Debt Prin Power Unit (MWH) Tariff Rs per KWH earning 13 37.44 -37.44 1310 10.00 131.00 93.56 39.00 132.56 55.01 14 39.32 -39.32 1297 10.00 129.70 90.38 39.00 129.38 50.18 15 41.28 -41.28 1284 10.00 128.40 87.12 39.00 126.12 45.71 16 43.35 -43.35 1271 10.00 127.10 83.75 38.00 121.75 41.24 17 45.51 -45.51 1259 10.00 125.90 80.39 38.00 118.39 37.48 18 47.79 -47.79 1246 10.00 124.60 76.81 37.00 113.81 33.67 19 50.18 -50.18 1234 10.00 123.40 73.22 37.00 110.22 30.48 20 88.83 52.69 -141.52 1221 10.00 122.10 -19.42 37.00 17.58 4.54 21 55.32 -55.32 1209 10.00 120.90 65.58 36.00 101.58 24.53 22 58.09 -58.09 1197 10.00 119.70 61.61 36.00 97.61 22.03 23 60.99 -60.99 1185 10.00 118.50 57.51 36.00 93.51 19.73 24 64.04 -64.04 1173 10.00 117.30 53.26 35.00 88.26 17.40 25 67.24 -67.24 1161 10.00 116.10 48.86 35.00 83.86 15.45 405.62 995.11 311.31 486.50 -2198.54 32842.00 220.00 2864.33 665.79 942.00 1607.79 480.44
  10. 10. 1MW SPV Power Plant : Financial • Initial Investment : 6.950 crore Equity : 2.085 crore Debt : 4.865 crore • Present Value of Investment : 12.56 crore • Present Value of earning (PPA & REC) : 17.36 crore • Present Value of Profit before tax :4.80 crore • Payback period : 6 years • Levelized cost of power : Rs 3.28/unit • After payback period capacity enhancement of another 1 MW in same land can be done with maintenance covered by first project (conservative estimate of earning is made. No incentive by government is considered in investment)

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