Steps Required To Set Up A Solar-powered Plant In India?

Steps Required To Set Up A Solar-powered Plant


India is blessed with abundant solar radiation in practically every section of the nation. With the decreasing cost of solar PV panels and advancements in solar design, the cost of generating energy from solar power plants is currently less than that of non-RE resources. According to a recent CERC directive, the average power purchase cost from non-RE sources is Rs 3.60 per unit, which is significantly more than the Rs 2.53 per unit of solar electricity discovered recently through a bidding procedure in the instance of a large utility-sized solar power plant.

Solar power is most suited for day loads, particularly agricultural loads because it is available during the day. DISCOMs provide power to agricultural loads for free or at heavily reduced rates. With an average T&D loss of roughly 30% for a rural feeder, the average cost of electricity purchased by a DISCOM to provide one unit of power to an agriculture user is more than Rs. 6/-per unit.

If solar power is generated locally and fed into the 33/11 kV sub-station, it will not only save DISCOMs money, but it will also improve the power quality at the tail end of the rural feeder, thus improving the performance of electrical equipment and appliances connected to the rural feeders, resulting in increased energy efficiency. Some states have adopted such an initiative and successfully implemented it.

In rural regions, there are around 40.000 33/11 kV sub-stations. Even if only 1 MW of solar power is connected to each of these substations, a capacity of 40 GW solar will be added, saving DISCOMs around 26 BU yearly in T&D losses, which is worth Rs. 9000 crore. There are additional 66/11 kV and 110/11 kV substations that can serve as anchor points for connecting small solar power plants.

A need has been felt to provide facilitative Guidelines for development of Decentralized Solar Power Plants so that the same is implemented by all DISCOMs across the country.

How To Start A Solar Power Plant?

Research & Planning:

How To Start A Solar Power Plant?

The first step in starting any business is to conduct research and develop a business strategy. Many firms fail due to a lack of a suitable business plan or a lack of any phase. When looking for ways to establish a solar power plant business in India, study and preparation may help you avoid these stumbling blocks and guarantee the business runs well. Now, if you're wondering what you should look into, here are some things to think about:

  • Identify the Market
  • Analyze the Location
  • Find out your Niche

Following that comes the planning. Create a business strategy based on your findings. A business strategy should be created after thorough study and consultation.

A business plan must have:

  • Name of the Company
  • Name of the Director
  • Vision and Mission
  • Investment
  • Shareholders
  • Partners (if any)
  • Revenue Model
  • Income Source
  • Expense Estimate
  • SWOT Analysis of the Company

Register Your Business:

Now that you have a solid business strategy in place, it is time to put it into action. As a result, legalize your company by registering it online.

Following your company registration, you must have the following documents:

  • Certificate of Incorporation
  • AoA (Article of Association)
  • MoA (Memorandum of Association)
  • GST Certificate
  • PAN and TAN

Acquire Permissions And License

Customers must obtain approval from DISCOM before installing solar panels. As a result, they must file an application and submit it together with the application costs.

Additionally, ISO certification is recommended to assure the quality of your service.

Open A Bank Account:

After registering your company, create a separate bank account for it. Ensure that all commercial transactions are conducted via it. It will assist you in keeping your books of account. You will also have a clear estimate of profits. As a consequence, you may easily keep your personal and corporate assets separate by opening a second bank account.

Documents for Business Bank Account:

  • Incorporation Certificate
  • MoA and AoA
  • GST Certificate
  • Identity and Address Proof

Hire Your Team:

A team is analogous to the physical components of a company. No business can function without individuals who are disciplined, innovative, and hardworking. As a result, examine the employment positions in your solar power plant company and hire accordingly.

Make certain that the personnel you recruit are talented and experienced in their field. You may look for resumes on several employment boards. Following that, you may create a shortlist and schedule interviews appropriately.

Make An Online Website:

Nowadays, having an internet presence is essential for all businesses. Above all, having an internet presence boosts a company's trustworthiness. It also allows you to target a bigger client base.

You must also have a social presence on platforms such as Facebook, Instagram, and Twitter. It will assist you in enhancing the dependability and credibility of your company.

Sales and Marketing:

It is critical to have an exceptional marketing plan if you want to enhance your company's revenue. As a result, while assembling your team, be sure to include a strong marketer. Following that, you may boost sales by promoting your firm in newspapers, pamphlets, and social media.

Solar Power Plant Setup Cost In India:

The price of land is Rs. 5 lakh per acre (1 MW plant requires a minimum of 5 acres of land).

The projected cost of land is Rs. 5 lakh per acre. A minimum of 5 acres of land is required for a 1 MW plant in this country, which means that a 5 MW solar power plant will cost Rs. 1 crore and 25 lakh.

Grid extension might cost up to Rs. 15 lakh per kilometer, depending on the capacity of the extension lines (range-11kV to 123kV). As a result, we may conclude that the cost of grid extension is proportional to the distance between the location and the nearest substation.

If trackers are utilized in the power plant, the project cost is increased by Rs. 2 crores (Rs. 40 lakh/MW).

Taking all of these considerations into account, it is predicted that the cost of constructing a 1 MW Solar Plant will be Rs. 4 crore, whereas a 5 MW Solar Plant would cost Rs. 20 crore.

Investment For Solar Panel Business In India:

Investment For Solar Panel Business In India

The investment is determined by the size and type of firm. However, a few investments are universal for everybody, such as Rs. 10,000 for business registration, Rs. 20,000 per month for office space, and Rs. 50,000 for general costs.

People are increasingly turning to solar power plants, owing to vast rooftop space and more than 300 sunny days each year. It also suggests that India will see a Solar Revolution within the next five years.

To summarize, India will see a Solar Revolution within the next five years. In fact, it is rated fourth in the market for renewable energy.So, discover how to start a Solar Power Plant Business in India and see your company grow in only a few years.

Profit Margin of Solar Business In India:

In India, the cost of a 5MW plant is expected to be between 34.5 and 35 crore. As a result, Rs. 45,000 to 60,000 may be created with 20k–20.5k units of power each day. As a result, after deducting minor O & M costs, a total of around Rs 1.75 crores may be made after a year.

Due to the national average of four peak sun hours per day, a 5 MW solar plant would generate 6000 MWh per year. As a result, a 5 MW solar plant may generate an annual income of around Rs. 1.5–1.75 crores.

1 GW Solar Power Plant Cost:

The cost of a household solar system is $2.50 per watt ($2 per watt with tax incentives). As a result, a 1 GW commercial solar farm would cost between $2 and $2.5 billion. Now, depending on the location, the farm will produce between 2.5 and 6 MWH per day.

Depending on where you live in the United States, that translates to 900–1400–2100 GWH every year. In the United States, the wholesale price of electricity is around 10 cents per KWH. This indicates that your 1GW solar plant is worth $90, $140, or $210 billion. Thus, in Arizona, it will take 9–11 years to pay off, whereas in New York, it will take 22–28 years.

1 GW Solar Power Plant Cost


Solar energy is becoming increasingly popular across the world. Previously, it was seen as a costly investment. However, the situation has changed, and solar energy is now regarded as a good and realistic source of investment. Counting the benefits, more and more solar power energy plants are being built in India, greatly benefiting people in some way.