This document outlines the tax benefits and incentives for investors in Lobel Solar Power's 1 megawatt solar power plant project. It notes that section 32 of the IT act allows 80% accelerated depreciation in the first year and 20% in the second year. Section 80-IA allows a 100% tax waiver on income for 10 years within the first 15 years of operation. The government also provides generation-based incentives through renewable energy certificates worth approximately Rs. 3.5 per unit generated. Third party power purchase agreements would allow electricity to be sold at Rs. 6 per unit, resulting in total revenue of around Rs. 9.5 per unit when including certificates. The power plant would generate around Rs. 150 lakhs

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LOBEL SOLAR POWER SYSTEM
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Tax & Other Benefits for the Investors in Solar Power Plant
 Section 32 of IT act provides Accelerated Depreciation of 80 % of the invested capital to
professionals companies with tax liability
Lobel Investors can set off their tax liability on the taxable income to the tune of 80% in the 1st year, and
subsequently 20% in the 2nd year
 Section 80-IA (sub section 4) of income tax Act, 1961 allows 100% tax waiver on the income
generated for any single 10 year period during first 15 years of operational life of a power
generation project.
This is valid for projects commissioned till 31st March 2014
 Generation based incentives given by the government - Renewable Energy Certificates (REC)
allows investors to gain a yield in the form of incentive currently being traded at average price of
Rs 3.5 per unit of electricity generated by the solar power plant
 Third Party PPAs with reputed business houses and large industrial groups (which will be
organized by Sai Saburi) allows per unit electricity to be sold at approximately Rs 6/KwH
 REC + PPAs results in per unit electricity selling rate of approximately Rs 9.5 per unit
 Lobel solar power plant (1MW) generation of 16,00,000 units in 1 year, revenue generation in 1
year will be around Rs 150 Lacs
 So, Break Even Point (BEP) of Lobel Investor is around 4 years, after which a long & stable
income stream is established as solar power plants are deemed FIT & operational for a period of
25 years Solar plants can be commissioned by us in our
 Solar Park within a time frame of 3-6 months
 Registration with the Ministry of Environment & Forests allows participation in “Certified Emission
Reduction” (CER) Credits in the international market