Solar energy has become a vital source of sustainability in today’s energy-deficient world. So, read this blog for the understanding of the solar installation and the costs involved in the utility scale solar panels installations.
What Is Utility Scale Solar Installation?
Solar installation on a utility scale solar farm is extensive. The capacity of these large scale solar installations are more than 1 MW. It is a large-scale installation of solar panels. In the case of utility scale solar installations, the power feeds directly on the electric grid.
The electricity is generated on a huge scale, which is then transmitted to the customers. These utility scale solar sites are operated collaboratively by the utility companies and the developers/owners. Utility companies are the power distributors who purchase the power at the wholesale rates.
The solar installation on a utility scale plant may require 6 acres of land per megawatt (MW). The basic mounting cost of the solar panels on utility scale might range between ₹ 25 Lakhs – ₹ 50 Lakhs, excluding the labour, miscellaneous, clearances, and other relevant costs.
These utility scale solar installations are beneficial in energy efficiency. They provide sufficient power to commercial and industrial sectors along with numerous households.
What Aspects Determine The Solar Installation Costs?
There are many factors that determine and influence the total cost of solar installation on a utility scale solar site. By understanding these aspects, one can easily plan the budget and efficiently allocate the finances.Those factors are mentioned below:
Location – The location of the solar panel installation site plays a crucial role in determining the cost. To reduce the operational cost, the transmission lines or mediums should be in the proximity of the grids. Thus, choosing the prime location is vital. It may lead to higher initial cost but further assures major savings on operational expenses.
Availability Of Sunlight – Solar energy solely relies on the natural light from the sun. The generation of electricity is based on what extent of sunlight is absorbed by the panels. Generally, 4-6 hours of proper sun hours is sufficient for power generation. Thus, consider the sun exposure before finalising the site for solar panel installation to avoid inconsistent energy generation and losses.
Estimate The Solar Panels Installation Cost – After analysing and reviewing the needs of the utility scale solar panels installation, it is necessary to estimate the prospective costs. For example, a 10 KW solar panel expense for a residential setting is around ₹ 5.5 Lakhs. Apart from the solar panels, there are many costs, including installation, grid connection, land acquisition, clearances, etc.
Taking a note of all these aspects help in understanding the financial prospects beforehand.
Technology Advancement and Scalability – The extent of advanced technology integrated in the installation influences the overall cost. Selecting the highly efficient solar modules and tracking system can uplift the cost of the installation.
The scale of the solar installation can also increase or decrease the expenses. Large scale installation of solar panels cost more at the starting phase till the installation. Following, it results in maximum power generation and savings with minimal maintenance.
Cost Breakdown In Utility-scale Solar Installations
Below is the per megawatt cost breakdown or utility scale solar panel installation.
Land Acquisition – Land acquisition is the foremost step in the solar installation on a large scale. As mentioned earlier, around 5-6 acres per MW. The land will cost between ₹ 30 Lakhs – ₹ 70 Lakhs. The cost of land differs across cities, owing to their laws and taxes.
Solar Panels – In India, the solar panel is priced around ₹ 2.50 – ₹ 3.50 per watt. The brand and quality of solar panels influence their cost. Considering the efficiency, monocrystalline solar panels are better and more expensive than polycrystalline panels.
So, the cost of the solar panels depends on the brand, budget, and scope of space. Thus, the total cost for solar panels could range between ₹ 1.5 Crores – ₹ 2.5 Crores per megawatt.
Mounting and Labour Cost – Following the land acquisition and solar panels, the next cost to be borne is for the mounting structure and labour. The mounting structure is the backbone of the solar panels that support them.
The mounting depends on the site compatibility and climatic conditions. The mounting structures are designed and placed to withstand the wind. Mounting charges also include the labour costs. The mounting can cost around ₹ 30 Lakhs and the labour cost ranges between ₹ 30 Lakhs – ₹ 60 Lakhs.
Grid Connection and Operations – Integration of grid to the solar module system is vital for power conversion. It also includes several miscellaneous steps. All these costs range between ₹ 25 Lakhs – ₹ 50 Lakhs.
Inverter – The direct current needs to be converted into alternating current for the general use of electricity in households and commercial zones. The inverter plays a major role in this process. It converts direct current (DC) created by the solar modules into alternating current (AC) to meet the grid’s requirements.
The cost for inverters range from ₹ 30 Lakhs to ₹ 70 Lakhs.
Government Approvals – Government clearances and permits are mandatory for the utility scale solar panels installation. These costs are generally minimal. However, it is important to get the required permits with proper payments.
| Factors | Estimated Cost Range |
| Land Acquisition | ₹ 30 Lakhs – ₹ 70 Lakhs |
| Solar Panels | ₹ 1.5 Crores – ₹ 2.5 Crores |
| Mounting And Labour Cost | ₹ 30 Lakhs – ₹ 60 Lakhs |
| Grid Connection and Operation | ₹ 25 Lakhs – ₹ 50 Lakhs |
| Inverter | ₹ 25 Lakhs – ₹ 60 Lakhs |
| Total Costs | ₹ 5 Crores – ₹ 6 Crores |
How Does the Government Incentivise Utility Scale Solar Installation?
The Indian Government is also encouraging and incentivising the generation of renewable solar energy. There are many tax benefits available for the owners/developers of the utility scale solar installations.
The government does not provide any subsidies to the commercial solar panels installation. However, it does promote adoption of solar energy by providing accelerated depreciation of assets to prevent excess tax payments.
Returns On Investment In Utility Scale Solar Installation?
Cost Savings – Large scale solar panels installation saves the cost on monthly electricity bills. The renewable source of energy results in optimised power generation and monetary benefits.
Reduction In Carbon Footprint – Solar panels installation not only generates electricity but also reduces the carbon production. For example, in a 50 MW solar plant in Prayagraj, Uttar Pradesh, there was a huge carbon reduction. With the help of Taypro’s solar panel cleaning robots, higher energy was produced by the panels and around 15013636 Kg of carbon was reduced.
Energy Independent – India is still significantly dependent on fossil fuel imports for energy. Boosting Indian solar energy generation capacity will lead to energy independence and encourage national power security.
FAQS
A utility scale solar site is a large-scale installation of solar panels, which goes beyond the capacity of 1 MW. |
Factors that influence the cost of solar panels installation on a utility scale are:
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The costs involved in utility scale solar panels installation are:
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Solar panels help in creating renewable energy from the sunlight, which is converted into usable electricity. This not only saves money on electricity bills but also reduces carbon footprint. |
The return on investment from the utility scale solar panels installation are:
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