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5 MW Solar Power Energy Plant in India: Profit, Cost & Land Requirement

3rd July 2021  

The popularity of solar energy is growing around the world. Earlier it was observed as an expensive investment, but today the scenario is different as solar energy is now seen as a good and viable source of investment. Counting its benefits, more and more Solar Power Energy Plants in India are being constructed, significantly profiting people in one way or another.

How does a solar power plant work?

The energy production of the Solar Power Plant comes from photovoltaic panels. Here, Solar panels produce electrical energy in direct current. Therefore, a solar inverter device is needed to convert such energy into an alternating current, which fits domestic or industrial consumption.

Area needed for the construction of a 5 MW solar energy power plant in India

Before setting up a Solar Plant, it is necessary to investigate the size of land required for its construction.

  • Solar Plants require considerable space because large arrays of photovoltaic panels need to be exposed to sunlight.
  • Solar Power Plants occupy at least 5 acres of land per 1 MW output, which means for generating 5 MW energy, an area of 25 acres is required.

But choosing the location is not enough. Legal authorization is also required to develop the project. Moreover, your project must be approved by environmental, safety, health, etc., bodies.

Read further: How Much Solar Panel Installation Cost In India

Cost of land for construction of 5 MW solar plant

  • The cost of land comes to Rs.5 Lakhs per acre (1MW plant requires a minimum of 5 acres of land).
  • The estimated land cost is Rs.5 lakhs per acre. Here, a minimum of 5 acres of land is required for a 1 MW plant, which means a 5 MW Solar Power Plant will be Rs. 1 crore 25 lakh.
  • The cost of Grid extension can be up to Rs. 15 lakh/km, which depends on the capacity of extension lines (range- 11kV to 123kV). Therefore we can confer that the cost of grid extension is dependent on the distance of the site from the nearest substation.
  • An extra amount of Rs. 2 crores (Rs. 40 lakh/ MW) is added to the project cost if trackers are used in the power plant.

Therefore, considering all the factors, approximately Rs. 4 crores is required for setting up a 1 MW Solar Plant, which means the estimated cost of 5 MW Solar Plant construction will be Rs. 20 crore.

Profit earned by a 5 MW solar plant in India?

The estimated cost for a 5MW plant would be near about 34.5 to 35 crores in India. Hence, with 20k - 20.5k units of electricity daily, Rs.45,000 to 60,000 can be generated. Accordingly, after excluding the minor O&M expenses, a total of Rs 1.75 crores approx. can be made after a year.

A 5 MW Solar Plant would make 6000 MWh per year due to the national average of four peak sun hours per day. So it can be said that a 5 MW Solar Plant can lead to annual revenue of about Rs. 1.5 - 1.75 crores per year.

You can also read: How Much Electricity does a 1mw Solar Power Plant Generate in a Month?

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