The cost of solar panels has fallen drastically. Installing a solar power system at your premises to reduce your energy costs is now easier than ever.

Add the favourable policy environment created by the Indian government to the mix, and you get a good idea of why countless businesses have been switching to solar in the past few years.

Installing a 1 MW capacity plant is a popular choice for small to medium sized businesses, as it is powerful enough to provide the necessary energy for their needs.

But before we get into the specifics of a 1 MW system, let’s understand why businesses across India are increasingly switching to solar energy.

Benefits of Solar Energy for Businesses

1. Cost Saving
Solar energy systems are one-time investments that can help businesses save big on their monthly electricity expenses. Moreover, this independent energy generation will act as a buffer against future tariff hikes.

2. Low Maintenance
Solar plants hardly require any maintenance apart from regular cleaning sessions. Most plants are equipped with remote monitoring systems that provide complete system reports and manual troubleshooting capabilities.

3. Improved Brand Image
The average consumer is environmentally conscious in his/her decision-making. Various stakeholders are also gravitating towards brands with a good sustainability portfolio. Thus, switching to clean energy generation will go a long way in helping businesses establish a greener reputation in the market.

4. Durability
A solar power plant is a fixed-cost asset with an average lifespan between 25-30 years. Through this resource, a business gets free clean energy generation for a long time.

5. Lower Carbon Footprint
Thermal-based energy is not only expensive but also incredibly harmful to the environment. Solar is a locally available, clean energy resource that will allow a business to reduce its power-based carbon emissions.

Cost of 1 MW Solar Plant

The cost of a solar energy system depends on multiple factors like the type of panel used, the brand of solar equipment, the location, the type of installation, roof orientation, etc.

The cost will also vary between the type of system one installs. For example, an off-grid system that is independent of the utility grid requires a battery backup system which increases the overall cost.

However, if we consider an average range then it would fall between ₹38-₹42/Wp. So, the 1 MW system would have an approximate cost of ₹3.8-4.2 crores.

Energy Generation

In ideal conditions, a 1kW plant generates 4 units in a day. Thus, a 1000kW or 1 MW plant would generate:
4 x 1000 = 4,000 units in a day
4x 1000 x 30= 1,20,000 units in a month

However, it is crucial to note that solar generation can be affected by elements like weather, the orientation of panels, the quality of equipment, location, maintenance, etc.

A solar power plant might generate up to 6 units in a day in sunny weather and as less as 1 unit on rainy days. Thus, it is difficult to approximate the exact generation of a solar power plant.

Incentives Associated with 1 MW Plant

There is no government subsidy for 1 MW capacity. But, the Indian government does provide other benefits such as accelerated depreciation to commercial and industrial consumers. This allows individuals to depreciate their solar power plant at a higher rate and claim tax benefits.

Along with the tax benefit, owners of a 1 MW solar plant can also avail net metering facilities in many Indian states. Consumers can export the excess energy back to the grid and get compensated for it.