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MNRE Director says solar power will be significantly cheaper might cost Rs. 5 per unit in few years, MNRE Schemes, MNRE Approvals, MNRE Advisory Council, MNRE sets up Q & A with Project Developers

Q & A  session for  Project Developers
  MNRE IS organising  a Q & A with project developers in India to get the answers they seek towards the policies that will be presiding Phase II of the JNNSM,  on  30-31st July in New Delhi.PV Insider has announced that government officials from the MNRE, Gujarat, Rajasthan and Karnataka will gather at the PV Project Development Summit 2012 in New Delhi, to discuss the strategy of the photovoltaic industry for Phase II of the Solar Mission and state policies. The industry is divided on the sustainability of solar projects with such low pricing. With project developers raising concerns over the long- term policy viability for the expansion of the solar power market in India, accurate planning from the government side becomes imperative to eradicate the lack of clarity over the solar policies in the country; now more than ever that the target for Phase II (2013–2017) has recently been revised its to 9,000 MW from its earlier target of 3,000 MW.

MNRE helps maintain 2 energy parks per state. 

State Level Energy Parks (SLEP) upto  two  numbers per State are supported  by the Ministry of New and Renewable Energy (MNRE)  under its Special Area Demonstration Project  Scheme.  The   Parks could be established by the State Nodal Agencies or Departments at an appropriate location  where a  large number of visitors are expected.


            During the last three years and in current year, MNRE has supported SLEPs at Bilaspur in  Chhatisgarh, Hamirpur and Solan in  Himachal Pradesh and Srinagar in  Jammu and Kashmir.

            The Ministry has supported 30 SLEPs in various States and UTs


India must have Global Presence in Renewable Energy Sector  

  Constant research and innovation are required in the field of renewable energy to keep us in the forefront of cutting edge technology.Ministry of new and renewable energy has constituted 'Solar energy industry advisory council' (SEIAC) to advice the ministry on various technology related matters, attract investment across the value chain, suggest steps required to encourage R&D and drive down costs and make the Indian solar industry globally competitive. more 

   Installing Transmission Lines to evacuate renewable power is an uphill task 

Setting up solar plants, windmills, biomass units to generate renewable energy is only half the story; evacuation of power to the remote interiors where no power grids exist is the more challenging part.    Chief Minister Omar Abdullah Monday highlighted the importance of harnessing new and renewable energy potential of the State to accommodate the electricity needs in remote and far-flung areas emphasizing on installation of adequate Transmission System (TS) to extract and distribute power. He said the help extended by the Union Ministry of New and Renewable Energy to the State be taken best advantage of in this regard to benefit the people.

    CM was of the view that the Panchayat Raj Institutions should be involved in the process of launching new and renewable energy projects and creating sense of ownership in them about these projects. They can manage these units, supply energy and obtain revenue, and utilize a portion of it for the development of the area they represent.more
 OFF GRID Lighting for India's Rural Poor
MNRE Secretary is of the opinion that private sector has to take an active part in bringing electric  powerto the poor rural masses. IFC, a member of the World Bank Group, in partnership with the governments of the United States and Italy, is launching a program aimed at providing safe, clean and affordable off-grid lighting to two million people living in rural India over the next three years. more
Biomass Workshop organised by MNRE

The power crisis and global warming is urging heads of conventional energy departments to take serious note of alternate energy.  A one day workshop on 'Bio-Mass Power- Issues and Challenges' was organised by Ministry of New and Renewable Energy, Government of India here today in which the heads of Conventional Energy Department from different parts of the country participated alongwith senior officers of Ministry of New and Renewable Energy.

In a few years, solar power will be significantly cheaper and cost Rs. 5 per unit — a sum that is on a par with the cost of thermal power — anticipates B. Bhargava, Director of Ministry of New and Renewable Energy (MNRE).

Mr. Bhargava was speaking on Monday at the inauguration of the National Training Centre for Solar Technology (South) and the opening ceremony of a five-day training programme on ‘Solar PV grid connected power plants' organised by the Karnataka Power Corporation Ltd. in association with the MNRE.

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  • abhishekifmr
    abhishekifmr -

    if tht happens all state electric boards will file bankruptcy Like

  • aathmika
    aathmika -

    As it is the loss made by the electricity boards this year alone is Rs 70,000 crores.

    Tamilnadu in my opinion is leading the pack with some Rs 7700 crores loss.

    They have an accumulated loss of about Rs 40,000 crores.

    Governments and Electricity boards need not produce electricity. They just need to transmit them.
    They need to create evacuation facilities.

    What is important for the nation is not necessarily to bail out the Electricity Boards. it is important to achieve grid parity. Grid parity as compared the thermal power plants and nuclear plants.

    Then solar will spread fast. Which is the ideal thing to happen.

  • gvrenergy
    gvrenergy -

    Hi Aathmika

    Can I have your email id please. My email id is


  • solar1234
    solar1234 -

    Even with much advances in solar cell efficiency US itself is not expecting such a cheap price for Solar P)V in the near future. Let us be realistic.

    Dr.A.Jagadeesh  Nellore(AP),India
    Wind Energy Expert
    E-mail: Like

  • aathmika
    aathmika -

    I prefer to discuss in the open forum.
    Just create a post and let everyone know what you want. 

    You can keep confidential things like design, product idea to yourself. But you certainly can post other things.

    There are many knowledgeable people here. I was told that there are over 4000 members here. 

    If there are people who are looking for consultancy - what business to get in ? Can i get into solar water heater business ? How to get into Electric vehicle business ? how much is the market for solar refrigerator etc 

    are questions that are answered in the public domain, so that i dont have to answer them again and again. 

    Remember that I am an early stage investor and not a consultant. many people seek my consultancy. 

    By virtue of the fact that I attend a lot of these seminars, I read a lot and also write a lot on solar energy opportunities, I know a lot. But am still not a consultant. 

    For your project, you may want to go to a consultant. 

    Dr.A.Jagadeesh, who is in this thread can counsel not just in Wind, but also in general.

    There used to be one Dr Bharani. There is Shankar. and many more.

    Pl make use of them for early stage counselling.  Plmake your queries public.

  • aathmika
    aathmika -

    To quote the director 

    With improved technology, the cost of setting up a one-MW power plant would come down from Rs. 20 crore to Rs. 10 crore in five years, while the per unit coast would drop from Rs. 20 to Rs. 10 .

    “By 2017, solar power will reach tariff parity with conventional thermal power, at around Rs. 5 per unit,” he said. "  


  • Joydeep
    Joydeep -

    Even if cell/ module prices fall, BoS ie Balance of systems are not falling at the same price.

    And in India, land price can never come down. So, rooftops can have some hope of that kind of a price. 

    AT present the total capital cost is estimated to be in the region of Rs 10 - Rs 11 crores.
    Per MW

    It makes about 1.5 million units. 

    For the sake of easy calculations, let us assume capital cost as Rs 10 crores. Units produced at 1.5 million. Cost per unit assuming no maintenence cost is Rs 6.50  
    Interest on the capital will determine the profitability. 

    If you get interest from a foreign country at 3 %, about Rs 30 lakhs.
    If you sell at Rs 5 per unit,  now, you still make Rs 75 lakhs. That is you have Rs 45 lakhs after
     having paid for your interest.

    The capital cost can come down. It has been coming down and will come down. Will it reach Rs crores per MW ? May be - but one doesnt know when ?  

    Will the efficiency go up ? Surely.

    Lots of work is going on in this area and I wont be surprised if the total production goes up to 
    1.8 million units per MW in a year or two and that will bring down the cost considerably.

    Imagine 1.8 million units per MW, means, 20 % more efficiency. 
    The capital cost at Rs 8 crores per MW means another 20 % saving on costs and interests which is a key cost component in solar power projects. 

    The interest commitment is Rs 80 lakhs including my equity and debt. 
    At a price of Rs 4.50 per unit, I cover all my interests. 

    I dont have money to pay back my debt. No profits. etc., 
    But just imagine an interest rate like what Reliance power got from their First solar deal thru Exim Bank for the solar thin films. 40 % of the project cost got at 3 % interest. It is a killer.

    After all the MNRE director is not wrong. Rs 5 is not far off ! Grid parity is not far off ! Solar is it !!


  • krupali
    krupali -


    Looking at a project from the interest point of view is odd. 
    I do agree that we can assume that there is no other expenses after the project is set up.

    You have not taken into account, REC - Renewable Energy Certs. For the next 5 years it is suppose d to be valued at the rate of Rs 9.40/ unit

    Add to this Rs 3/- per unit - again the lowest price at which it solar power can be sold at to any Utility ie Electricity Boards.

    Total comes to Rs 12.40/ unit
    People are unlikely to bid in the JNNSM Batch II at any price lower than Rs 12.40/

    The problem with REC is that its price of Rs 9.40 is fixed for just 5 years and if it is not for complete term commitment, the banks dont see them as bankable.

     I do agree the crux of this thread is not what will be the price that will be quoted at JNNSM Batch II bidding. 

    Our objective is to find out if it is possible to reach Rs 5/ unit soon.

    Looks like it is possible. 

    If all his assumptions are right. a. No expenses after setting up a plant. b. cash out go is only the interest for the money borrowed. c. capital cost is Rs 10 crores, which has fallen from Rs 15 crores 18 months ago. Hence can come down to Rs 8 crores and Rs 6 crores in the next 12 months. d. If thin films are used and exim bank load at say 3 % for the films got, interest charges comes down even further.

    Looks like it is possible to touch in 3 or 4 years. 2015 !! Rs 5 / 6 per unit possible.

    Just now I read Deepak Gupta saying that he is very happy with the success of JNNSM.
    He is happy with reverse bidding. He seems determined to discover the lowest price. 

    He is proud that India is setting a benchmark for solar energy price !

    So, we are surely heading for grid parity much sooner than what others are expecting. Like

  • gvrenergy
    gvrenergy -

    Hi Experts

    If we want to setup the plant in Andhra Pradesh, can any one share how much it cost and more details? Are there any government subsidiaries.   I have seen in the discussion some say 10 CR  and some say 14 CR, is it including land cost or only plant cost.  Advanced thanks.

    0044 791 952 1632

  • jalaj
    jalaj -

    No way not possible Solar Power @ Rs. 5 /unit with that kind of PLF.
    its just a gimmick of words. Like

  • Nikoli
    Nikoli -

    This is what Abhishek IFMR posted a few months back.

    Since we know the cost of the solar is higher than the current sources like coal, natural gas or hydel power but the question is how much costly is the solar power in India.  As per the report “For Benchmark Capital Cost Norms for Solar PV Power Projects and Solar Thermal Power Projects to be applicable for the year 2011-12” the base rate for the solar PV light is INR 14.41.  It looks costly but this report was made in September 2010. Since than so much changes has happened in the world (supply addition in China, Reduction in FIT in Europe which had reduced demand) that now today’s cost of solar power is reduced by almost 16%. Today a unit of solar power will be INR 12.07. A breakup of the cost is given below for the reference.

    PV Modules8.325.67
    Land Cost  0.150.16
    Civil and General Works0.951.00
    Mounting Structures    1.051.10
    Power Conditioning Unit1.601.68
    Evacuation Cost up to Inter‐connection Point (Cables and Transformers) 0.900.95
    Preliminary and Pre‐Operative Expenses including IDC and contingency   1.441.51
    Total Capital Cost     14.4112.07

    The Sept 2010 cost was based on that time rate of $ 1.75 per 1 W and exchange rate of 46.7 of USD/INR.  The solar module cost has now reduced to $ 1.25 and exchange rate has improved to 45.00. In driving today’s cost I have taken an inflation of 5% for this period. This cost structure was for 1 MW plant and hence we can safely assume that the cost will be atleast 10% less for plants of size greater than 10 MW with the economics of scale. With the given situation in World’s solar module market I wouldn’t be really surprised if the solar module cost gets reduced to $ 1 per W in next 18 months to 24 months. If this price reduction happens than I am sure we will see some real big investments in solar production and one small investment would be mine :-)  

    If this is what has happened in less than a year, the prices can fall even more.
    Already I hear that Suntech is offering at 85 cents per watt. 

    As one can see the biggest fall is in PV modules. 
    Other costs like Land Cost , Civil and General Works, Mounting Structures, Power Conditioning Unit, Evacuation Cost up to Inter‐connection Point (Cables and Transformers)     and Preliminary and Pre‐Operative Expenses including IDC and contingency have all shown signs of going up. 

    Unless the other costs are brought down, the overall costs will not come down.

  • Nikoli
    Nikoli -

    @ Abhishek 

    All state electricity boards are in deep trouble for various reasons.

    and power theft which is accounted as transmission loss.


  • aathmika
    aathmika -

    @ GVR

    " The land requirement for Solar PV based power project depends upon thetechnology employed i.e. Crystalline or Thin film, conversion efficiency and solar radiationincident in respective area.

    The Commission, while determining the benchmark capital costfor Solar PV projects for the year 2010‐11, had considered land requirement of 5 Acre/MWand its cost was considered as Rs. 3 Lakh/Acre or 0.15 crore / MW.

    The Commissionproposes to consider the same land cost for the determination of benchmark capital cost of  Solar PV projects for FY2011‐12.  "
    Because only non arid lands can be used, it doesnt cost much. But in future, meaning after a few years of hectic activity in solar, it can become expensive.

    In gujarat it is already an issue. The land !!
    Gujarat and business opportunity there is here   Like

  • Rahul
    Rahul -

    In june 2011 itself the capital cost has come down to Rs 12 crores.

    From then on only the module prices would have fallen. And that cant bring down the project cost to Rs 10 crores.

    In fact only the module prices have fallen.

    Now, there is excess capacity in cell and module making and the prices will fall even further.
    While it is not good news for the cell and module makers, it is good news for the power producers.

    This fall is not going to be accompanied by any big increase in module efficiency. Higher efficiency modules will make a difference to the bottom line. It will take a year or two to get them. 
    3D cells and organic cells are still in the lab stage.

    Forget JNNSM Batch II. it is only for 350 MW. 
    The rest of the market is huge. That is generation for the utilities, captive power, Diesel to renewables, distributed power generation, hybrid power solutions  etc are big games and need power urgently. As per KPMG it is 68 GW by 2022 and 75 Gw by 2022 as per EAI.

    That is a big market and it is  not important to consider REC and APCC. 

    If you can keep the total project cost to less than Rs 10 crores. Get international  bank funding 
    at 2 % or 3 % for the PV modules and if you can locate your plant in a high irradiation area of about 6 plus like guj/raj, nothing like it.

    Combine REC + APCC and get Rs 12 + for 5 years. At 1.5 million units, you make Rs 1.8 crores - gross revenue.

    After paying interest of about 60 lakhs you will have a net balance of Rs 1 crore and if you use that to pay back the loan, in 5 years you will have a debt of just Rs 2 crores. ( rs 3 crores is equity)

    From 6th year, if you continue to sell at Rs 12, you continue to make huge profits. Even if you were compelled to sell at say Rs 7 or Rs 8 per unit, you are still a profit making proposition. Like

  • sriparn
    sriparn -

    Hi Folks,

      The current price for installation of SPV power plant comes to 15-17crores, However the power plant being installed at this rate does not look like it will withstand to diliver power for expected timeline. The poorer installation in order to meet MNRE tarrif rate is a biggest concern on the relibality of Renewable energy in INDIA.

     MNRE as a implementer need to visit intalled power plants across Gujrat, rajasthan & other part of country to know the realistic values. Compromising with the tarrif rate will have direct effect on installation & BOS selection of Power plant.

     Until and unless the implemnter didnt come out of economics & get into the technicalitites i am worried the day is not far when the users will loose faith on Renewable energy.


  • abhishekifmr
    abhishekifmr -

    @ All
    finally I am seeing a discussion on the blog :-)
    further to add to my calculations I found that Surana is ready to provide module @ 55 per watt (even for a 200 W panel). Now think if we can have these modules on rooftops across villages coupling with the existing infrastructure for evacuation we can have n number of localised grids which could atleast give 4-5 hrs of electricity to 75000 non electrified villages.


  • Joydeep
    Joydeep -

    @ Sriparn and other consultants in solar energy

    The components that Abhishek has given is what the solar mission has given.

    The rates given by Abhishek is in keeping with the guidelines given by them around sep 2010.

    I fully agree with Abhishek that the prices have fallen since for modules. As per Abhisheks figures - which in my opinion are right, the prices of modules alone hv fallen. All other components have gone up.

    When the above rates were released around sep 2010, no one really objected. ie no one objected to Rs 14.5 crores as the capital cost last year sep. 

    The objection, the hue and cry and the loud opposition came when the reverse bidding to discover the lowest price came about. Rs 12.10 the average price bid in Batch II was objected to.

    As they were not bankable.
    As itis possible to sell at that price by cutting corners in BoS and all such matters. 

    For a Rs 15 cr plant a buying price of Rs 15 will be fine.

    I request Sriparn to comment on Abhisheks pricing. Sep 10 pricing is more or less the same as what the solar mission has recommended. So Sriparns comments on Jun 11 pricing.

    Between Jun and now, the prices of modules have fallen further in the international market. But I am not sure of the Indian market, which alone matters for the JNNSM Batch II bids. Like

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