A short note on the proposed solar power plant of 10MWp in West

Bengal Purulia area by Himadri Banerji, MD EcoUrja. This is for

reference only and for helping the investors to arrive at a decision.

If any investor is planning to set up a grid connected solar power plant? Then
there are some questions which any investor would ask. Below is a list with
answers.

1. What is the approximate cost of a solar power plant?

A solar photovoltaic power plant consisting of solar panels, inverters and
all the required equipment including land etc will cost approximately Rs 7-
8 Cr/MW. This means that a 10 MW solar project which can be built on a 50
Acre plot of land will have a budgeted cost of Rs 80 Cr.

The breakup for total budgeted cost for a 10MW plant is as follows
1. Land and Land Development : Rs 3.0 Cr Assumed
2. Engineering, Procurement and Construction : Rs 70.0 Cr
3. Project Consultancy : Rs 2.4 Cr
4. Contingency @5% : Rs 4.0 Cr
Total Project Cost : Rs 79.4 Cr
Debt: 55.58 Cr and Equity: 23.82Cr

2. What would be the Land Requirement of solar Power from this plant?
This plant will be operating only during the period when sunlight is
available and the average output in the state of West Bengal will be
approximately 100W/M2 so for a 100m2 area the plant will have a capacity
of 10KW. For 10MW we will need 100,000m2 or 10 Hectares of waste arid
land.

3. What will be the output from this plant

The plant simulation carried out using advanced modeling software comes
to about 17.9 Million Units/year. But considering losses we should budget
at 16.8 Million Units/Year

4. What will be the average return on equity:

Normally allowable by regulators is 12-14% Post Tax for Power Projects.

5. What then will be Tariff of the Electricity Produced from the plant?

Considering a Debt equity Ratio of 30:70 and Cost of Debt @ 10% per
annum, the financial models are predicting a tariff of Rs 8.5 per unit with a
ROE of 12% Post Tax. As per the draft .JNNSM guidelines, O&M cost of Rs
9.52 Lakhs per MW per annum is considered. a total escalation rate of
5.72% per year for the normative O&M expenses has been allowed for the
useful life of 25 years the project. These calculations are indicative only
and will be confirmed after detailed study of the site conditions and
generally done in a feasibility analysis. EcoUrja team has conducted
several such analyses for our prestigious clients.

As of now the tariff has yet not been announced as per the West Bengal
Solar Policy, though the same is expected anytime and the tariff expected
is Rs 10 per unit and will thus provide a higher return than above. Hence
we suggest that we carry out the feasibility analysis and keep the project
ready to take off as soon the policy is announced.