facebook-corpseed
Call us
Let's chat? - We're online

Hi 👋! Please fill out the form to chat with next available agent.

Hello ! Welcome to Corpseed, and thank you for visiting us. How can we help you today?
Tell us more about your requirements

How to Build a Commercial Solar Power Plant in India

How_to_build_a_commercial_solar_power_plant_in_India_corpseed.png

Overview: Commercial Solar Power Plant

Electricity is required for a wide range of home, commercial, and industrial applications. Each of these applications necessitates the use of electric power that is compatible with them. Hydropower, thermal power, and nuclear power are all traditional ways of generating electricity. Because of the renewable nature of the primary source of energy, alternative techniques of generating electricity, such as solar and wind power, are becoming more popular these days. Solar energy is the radiant light and heat from the Sun that is captured by a variety of ever-evolving technologies like solar heating, photovoltaic, solar thermal energy, solar architecture, molten salt power plants, and artificial photosynthesis.

--------------Blog Contact Form-------------

It is a significant renewable energy source, and its technologies are classified as passive or active solar depending on how they gather and distribute solar energy or convert it to solar power. Photovoltaic systems with concentrated solar electricity, and solar water heating is all examples of active solar approaches. Orienting a structure to the Sun, selecting materials with favorable thermal mass or light-dispersing qualities, and designing rooms that naturally circulate air are all examples of passive solar approaches. Solar energy isn't only a business strategy or a way to generate money or life. It is a campaign to encourage India to become the world's leading solar power producer and to provide electricity to Indian cities, villages, and towns using renewable energy. As a result, we conducted detailed market research on the current and potential opportunities in the solar power plant sector in India. Consider the following choices if you want to create a solar power plant or a solar power product company in India. 

Types of Solar Power Plant

These days, everyone is aware of the benefits of adopting solar. Many people are moving to solar energy as their primary source of energy, lured by the importance of the most abundant energy source. However, when choosing a type of solar power plant, caution should always be exercised. Because it is the most important factor in determining whether or not the power plant will be helpful to you.

If you are ready to switch to solar power but are unsure which type is ideal for you, we can give you comprehensive information on all sorts of solar power plants.

Three Types of Solar Power Plant

Solar power plants are generally classified into three categories. On-grid solar power plants are the first, off-grid solar power plants are the second, and hybrid solar power plants are the third.

  • On-Grid Solar System - Saving + Grid Export
  • Off-Grid Solar System - Saving + Backup
  • Hybrid Solar System - On-grid + Off-grid

Difference Between On-grid, Off-grid, and Hybrid Solar Power Plant

Starting with the basics, the main distinction between on-grid, off-grid, and hybrid solar power plants is their utility grid connection. On-grid solar systems work with the utility grid, but off-grid solar systems do not. Furthermore, a hybrid system is partially reliant on it. While each type of solar power system differs in terms of specs and features, all solar power systems operate on the same concept. In addition, each form of the solar power system has its own set of components.

Manufacturing Solar Products

Solar items are in high demand these days, with everyone from businesses to individuals wanting to install them in their workplaces or homes. So, if you want to create a manufacturing company that deals with solar energy, solar items will be the greatest place to start. You must first determine the solar panels, solar panels, solar grids, and solar PV that you will make before you can begin your solar power product manufacturing firm. You can plan to buy the machinery needed to make solar products based on your choice. You may need special work permits and certifications from the state or city's legal authorities to get started with this firm. Ensure that your industrial space and machinery are compliant with the Indian government's safety and manufacturing rules. You'll need a minimum investment of 5, 00,000 INR to get started in the solar tuning industry.

Selling Solar Products

If you have a limited budget, you can build a business around selling solar items as a store or wholesaler in the city. Providing the solar items required to produce solar energy in India would be one of the top business ideas. Solar pumps, solar lights, solar PV, solar thermal systems, solar chargers, solar attic fans, and a variety of other solar products are available for sale in the marketplace. You can either take the dealership and make it available to retail shops or build your own solar products retailer firm, depending on your business budget. To get started in the solar tuning company, you'll need to put down a minimum of 1, 00,000 INR.

Investing in the Solar Projects

To set up a full-fledged solar power plant, a significant amount of investment is required at various stages of the business, from renting or buying property to setting up a factory, purchasing the latest machinery, electrical components of equipment, and maintenance charges, and more. Solar project owners frequently enlist the aid of a group or individual investor in exchange for stock in their venture. Investing in a solar project is one of the most profitable and low-risk investments available, as it offers a high return on investment if done correctly. So, if you have enough savings or money to invest in a business and benefit handsomely, you may choose to consider solar projects as a viable choice. The amount of money needed to start this business will be determined by the financial demands of the solar project owners.

Offer Consultation on Solar Energy Usage

The solar consulting industry is in high demand in the marketplace, and there has been a surge in demand for solar power goods recently. As a result, individuals seek the advice of solar consultants to help them choose the finest solar power system for their company and home. Solar power consultancy is the greatest business option for you if you do not want to devote your resources to producing or selling solar power items. You'll need an investment of roughly 1,00,000 INR to 2,00,000 INR to start a solar consultant firm, as well as a technical understanding of solar goods, their applications, and installation criteria.

Tuning Solar Products

If you have a limited budget but want to take advantage of the solar energy company chances, you can fine-tune your solar products firm. Solar panel owners require prompt and expert maintenance, repair, and cleaning services for their solar goods or inverters. As a result, you might start a solar panel maintenance and cleaning company to provide support. You'll need a minimum of 50,000 INR to get started in the solar tuning company.

PPA is Important

A power purchase agreement (PPA), sometimes known as an electricity power agreement, is a contract between two parties: a generator of electricity (the seller) and a buyer of electricity (the buyer) (the buyer). The PPA lays up all of the commercial arrangements for the sale of energy between the two parties, including when the project will start commercial operations when electricity will be delivered, penalties for late delivery, payment terms, and termination. A PPA is a significant instrument of project financing because it is the primary agreement that defines the income and credit quality of a generating project. Today's PPAs come in a variety of shapes and sizes, depending on the demands of the buyer, seller, and finance counterparties. PPAs make dispersed generating assets like photovoltaic, microturbines, reciprocating engines, and fuel cells easier to finance.

A power purchase agreement (PPA) is a legally binding agreement between an electricity generator (provider) and a power purchaser (buyer, usually a utility or a large power buyer/trader). Contractual terms can range from 5 to 20 years, during which time the power purchaser purchases energy from the generator, as well as capacity and/or supplementary services. These types of agreements are critical in the financing of power-generating facilities that are not held by a utility. In most PPAs, the seller is an independent power producer, or "IPP."

Commercial PPAs have evolved as a variant that allows businesses, schools, and governments to purchase electricity directly from the generator rather than from the utility in the case of distributed generation (where the generator is located on a building site and energy is sold to the building occupant). The financing of distributed generating assets such as photovoltaic, microturbines, reciprocating engines, and fuel cells is made easier using this strategy.

Under a PPA, the SELLER is the entity that owns the project. The seller is usually set up as a special purpose entity with the sole goal of facilitating non-recourse project funding.

The BUYER in a PPA is usually a utility that buys electricity to meet the demands of its consumers. The buyer in a commercial PPA form of distributed generation could be the building's occupant—a business, school, or government, for example. Traders of electricity may also enter into a PPA with the Seller.

PPAs are controlled to varying degrees by the Union or State Governments, depending on the type of the PPA and the extent to which energy sales are regulated where the project is located.

PPAs may be appropriate in the following situations:

  • The project's projected revenues are uncertain, so some guarantees about quantities purchased and prices paid are required to make the project viable; 2. the project's projected revenues are uncertain, so some guarantees about quantities purchased and prices paid are required to make the project viable; 3. the project's projected revenues are uncertain, so some guarantees about quantities purchased and prices paid are required to make the
  • It is intended to be protected against the cheaper or subsidized local or international competition (for example, where a neighboring power plant produces cheaper power);
  • The majority of the product will be purchased by one or a few major customers - for example, a government may be purchasing the power generated by a power plant - the government will want to know how much it will be paying for its power and that it will have the first call on that power, and the project company will want revenue certainty;
  • The buyer wants to ensure supply security.
  • With solar power projects in non-profit organizations to minimise solar energy system installation expenses 

The power purchase agreement (PPA) is frequently regarded as the most important document in the development of independent electricity generating assets (power plants). It is critical to get non-recourse project financing since it defines the project's revenue conditions and credit quality.

A PPA can be used by the PPA provider to raise non-recourse financing[6] from a bank or other financing counterparty by precisely describing the output of the generating assets (such as a solar electric system) and the credit of its associated income streams.

On the date it is signed, generally known as the effective date, the PPA is deemed contractually obligatory. The effective date ensures that the purchaser will acquire the electricity generated and that the supplier will not sell its output to anybody other than the purchaser after the project is completed.

Before the seller may sell power to the buyer, the project must be thoroughly inspected and commissioned to guarantee its reliability and compliance with industry standards. The commercial operation date is defined as the date when all testing and commissioning are finished, and it is the date when the seller can begin producing power for sale (i.e. when the project has been substantially completed). The commercial operation date also specifies the duration of the operation, which includes a contractually agreed-upon end date.

A PPA's term expires at the end of the agreed-upon commercial operation period. If anomalous events or situations arise that do not satisfy contractual guidelines, a PPA may be terminated. If unusual circumstances emerge, such as natural disasters or uncontrollable events, the seller has the right to limit energy distribution. When the after-tax value of electricity changes, the PPA may allow the buyer to reduce energy usage. When energy is restricted, it is usually due to the fault of one of the parties involved, resulting in compensation to the other party.

In exceptional circumstances, such as natural disasters, this may be waived, and the party responsible for fixing the project is liable for any damages. When liability is not clearly specified in a contract, the parties may agree to discuss force majeure to settle the situation.

The seller is responsible for the maintenance and operation of a generation project. This involves routine inspections and, if necessary, repairs to maintain safe operations. If the vendor fails to meet these conditions, liquidated damages will be levied. The vendor is usually also responsible for installing and maintaining a meter that determines how much output will be sold. In this case, the seller must additionally offer real-time data upon the buyer's request, including atmospheric data relevant to the system deployed.

The PPA will determine where the electricity sale takes place in reference to the buyer and seller's locations. If the electricity is sold on a "busbar" basis, the delivery point is on the high side of the transformer near the project. The buyer is in charge of transmitting the energy from the seller in this form of transaction. Otherwise, the PPA will designate a different delivery place that both parties have agreed to contractually.

The premise for a PPA is agreed upon electricity tariffs. Prices can be set at a fixed rate, increase over time, or be negotiated in any fashion as long as both parties agree. The pricing will be regulated in a regulated environment by the Electricity Regulator. A PPA will frequently state how much energy the provider is expected to produce each year, and any surplus energy supplied will have a negative influence on the buyer's electricity sales rate. This approach is designed to incentivize the seller to accurately estimate the amount of energy that will be produced over a specified time period.

The PPA will also explain how invoices are created and how long it takes for those bills to be responded to. This includes how to deal with late payments and invoices that have become final after periods of inactivity, as well as how to challenge the invoice. In any case, the buyer has the ability to audit the records produced by the provider. When a PPA Provider sends an invoice to the Generator or the other way around, there is a deadline that must be reached, and if that deadline is not met, there are consequences that vary from one PPA Provider to the next.

In most circumstances, the buyer will demand that the seller guarantee that the project will fulfill specified performance standards. Performance guarantees allow buyers to plan ahead of time when building new facilities or trying to satisfy demand schedules, and they also motivate sellers to keep accurate records. In the event that the supplier's output fails to fulfill the buyer's contractual energy demand, the seller is responsible for reimbursing such expenditures. Other contractual guarantees, like availability and power-curve guarantees, may be agreed upon. These two sorts of guarantees are more useful in areas where renewable energy is more volatile.

5 Benefits of Using Commercial Solar Panels

Solar energy is a reliable, continuous, and renewable source of energy. It is also the most environmentally friendly energy source because it produces no pollution and minimizes carbon emissions. The majority of the energy consumption needs of commercial buildings, such as offices and corporate organizations, are met by electricity.

Commercial buildings' electricity usage is substantially higher throughout the day, making commercial solar panel systems an excellent choice. Additionally, for those interested in employing commercial solar panels, there are various state and federal tax rebates and credits available for rooftop solar power installations.

Commercial solar panels can be used for a variety of purposes in commercial buildings, including pre-heating ventilation air, solar cooling, water heating, lighting, and more. Installing a rooftop business solar panel system to generate power for your commercial building is also a terrific way to demonstrate to your investors and customers that you care about the environment and are taking steps to make it a better place to live.

Furthermore, state governments offer a variety of financially beneficial financial incentives that can even lower the cost of solar panel installation. Commercial solar panels can assist a company in moving away from single reliance on grid electricity, lowering electricity costs. We've outlined some of the advantages of switching your commercial facility to solar electricity below.

A Great Return on Investment

Commercial solar panels from a reputable solar firm in India, such as Insolation Energy, lower your running costs considerably, saving you a significant amount on your energy bills. Commercial solar panels can also be used to store electricity in solar batteries. So, even if you're closed for the holidays or weekends, the conserved energy will help you save throughout the week. Your business solar panels will quickly pay for themselves as a result of these features.

Installing a solar power plant in your commercial building also boosts its worth, given that you may not be using it indefinitely. If commercial solar panels are installed on the building, you will be able to sell it for a greater price.

Avoid Power Outages

When your company relies on the utility power system for power, it is completely vulnerable to network outages. As a result, your office premises lose electricity when the power goes off due to a storm, a grid problem, or scheduled maintenance.

Even so, if you have a solar power system with enough solar battery system for power storage, you will not lose electricity during a blackout. As long as the sun is shining and your battery backup is working properly, your commercial solar panels will continue to provide electricity to the electrical framework of your building.

Enhance the Property Value of Your Business

In the event that you ever decide to sell your industry, factory, or private property, a commercial solar panel system can raise the value of your property and help you sell it faster. It's because energy efficiency is profitable. When solar panels are installed on a commercial building, the solar power system meets the organization's energy needs. As a result, your building's electricity expenditures are lower than comparable structures that do not have commercial solar panels on the roof. As a result, when you own the firm, you will earn from the solar panels, and when you sell them, you will recoup your solar panel installation costs.

Safeguard against Unexpected Energy Bill Rises

It's unlikely that your commercial solar panels will offer all of the energy that your company requires. As a result, you'll have to rely on your electric company to some level. Even yet, the electric provider only supplies a part of the energy you consume. This lessens the impact of a large increase in your energy bill. As a result, your monthly energy bills will be consistent, making it easier to manage your business's finances.

Get Low Maintenance, Reliable Energy

Solar panels for business use are low-maintenance and dependable. Commercial solar panels have an average life expectancy of 20 to 25 years, depending on the quality. The solar power plant will start delivering power as soon as it is connected, and you won't have to do much maintenance. The only recommended maintenance is to clean the solar cells with a water pipe to remove debris and dirt.    

Why You Should Invest in Commercial Solar Projects

  • Rising energy demand in the country is fueled by economic expansion, rising wealth, increasing urbanization, and rising per capita energy use.
  • In 2010, the National Solar Mission was launched. The mission's goal is to position India as a global leader in solar energy. By 2022, the National Solar Mission's goal of 100 GW of grid-connected solar power has been increased from 20 GW.
  • India has a wind potential of more than 300 GW (at hub heights of 100 meters), a solar potential of 750 GW (if 3% wasteland is made available), a small hydro potential of 20 GW, and a bio-energy potential of 25 GW.
  • India's government has set a goal of adding 175 GW of renewable energy by 2022, including 100 GW from solar, 60 GW from wind, 10 GW from biomass, and 5 GW from small hydropower, in accordance with the Paris Climate Accord. This will open up a plethora of investment options throughout the value chain. 4 By 2030, this has been increased to 450 GW.
  • Sing a plug-and-play paradigm, solar power tariffs were cut by more than 75%.
  • Until November 2021, a total of 150 GW of renewable energy capacity (including large hydro) has been installed in the country. Projects with a total capacity of 63.64 GW are in various phases of execution, while projects with a total capacity of 32.06 GW are in various stages of bidding.
  • The Ministry of Natural Resources and Environment (MNRE) grants Concessional Custom Duty Certificates (CCDCs) for the establishment of compressed biogas generating projects using renewable urban and industrial waste.
  • A 28 percent decrease in emissions over 2005 levels, compared to India's 35 percent reduction target by 2030.
  • India will produce more than three times the present amount of nuclear power by 2031, rising to 22,480 MW from 6780 MW now, as new nuclear power facilities are planned.
  • The Pakal Dul Hydroelectric Project will play a vital role in achieving the 450 GW renewable energy target by 2030. In the region, an investment of INR 8212 crores is being made, which will generate direct and indirect employment possibilities as well as contribute to the overall development of the local population.
  • The UT of Ladakh will give 20,000 acres of land at Pang immediately for the establishment of a Renewable Energy Park, while the availability of another 20,000 acres of land at Pang would be investigated for the establishment of 10 GW Solar Park in Ladakh.
  • Under existing PPAs, revised guidelines from the Ministry of Power and New & Renewable Energy will allow for the replacement of fossil fuel-based energy with renewable energy. Because renewable energy is less expensive than thermal energy, the benefits of bundling renewable and thermal energy will be split 50:50 between the generator and distribution companies/other procurers.
  • Coal and lignite businesses have planned to develop an additional 5560 MW of renewable capacity with an investment of about INR 15000 crores to expand non-fossil energy capacity to 500GW by 2030. This will bring the total capacity built to 7 GW. To meet its net-zero goal, Coal India alone plans to install 3 GW of solar power over the next five years.
  • The Ministry of Power and New and Renewable Energy has announced revised guidelines that allow thermal power companies to build renewable energy generation capacity on their own or through open bids from developers, and then sell it to consumers under existing PPAs.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.

BOOK A FREE CONSULTATION

Get help from an experienced legal adviser. Schedule your consultation at a time that works for you and it's absolutely FREE.

Author
Surbhit Sharma
I have worked for many internet blog pages and news portals. currently, I am working as a content writer for Corpseed Pvt. Ltd. I like to write blogs and articles in the field of different services.

Give us your feedback

What do you think about this article?