[updates of 17th October 2015 below]
|One of our PV Solar rooftop projects under commissioning|
[Other interesting article - Solar Project : Execution Stages]
Larger projects such as Solar farms can opt for Preferential Tariff or Feed-in-Tariff which improves revenues through sale of power to DISCOMs. The tariff realization could be as high as INR 7 per kWh.
Alternatively MW-level offsite Solar projects could also be used to power Industrial plants. Direct benefit in terms of saving on grid power is attractive.
For existing businesses investment in PV Solar makes commercial sense due to the 80% accelerated depreciation benefit. The RoE for such projects is very quick as these projects are financed by leading banks.
Additionally 10 year tax holiday on revenue through sale of Solar power is also available. Some States have also relaxed the cross-subsidy and electricity duty on Solar power both for captive projects as well as open access projects.
[Other article you may find interesting - Solar Energy FAQs]
In case of captive consumption, it is important to note that the grid power prices are rising and will continue to rise for a long time to come. As compared to this Solar project has an upfront cost and no running cost. In fact if a 100 kWp project cost is amortized over a period of 10 years simple cost of power generation works out to be INR 5 per kWh. This simply means that in its useful life of 25 years a PV Solar project will payback itself several times as cost of generation is nearly zero after the initial investment is recovered.
For a grid-feed project of multi-MW level Power Purchase Agreement could be signed for 25 years. In fact this is the only business wherein a buyer agreement is available for a very long tenure. The multi-fold appreciation in land value (where the project has been installed) is a definite advantage over and above the usual benefits.
Updates of 17th October 2015
Several States have announced a clear Solar policy with several additional benefits. These include (but not limited to) :
- Discount of 50% or more on wheeling charges for Solar Power.
- 10 year tax holiday on revenue generated from Solar Power.
- 100% exemption on Electricity Duty.
- 50% Exemption on Stamp Duty for procurement of land for Solar Power.
- Lower cost of financing by Govt. bodies with a discount of 2% or more on existing lending rates.
- Declaration of Solar Projects under PSL (Priority Sector Lending) sector meaning easier financing options for projects upto 3 MW for businesses and for projects upto 15 kW for individuals.
- VGF (Viability Gap Funding) is offered by the Government for projects which are driving the prices in Solar further down.
Enerco Energy Solutions LLP has set up several PV Solar projects across India and also worked with leading Cos. on matters of Energy Conservation and Solar Power.
In Solar our present focus is on
- Investing (upto 100%) and setting up Solar Projects for Industrial and Commercial Clients on BOO or BOOT basis.
- Advising Industrial and Commercial Clients on how they could use PV Solar to their benefit.
- Development of multi-MW level Solar Park