How much can you make from a solar farm?

The cost of establishing a solar park in India includes several key components, such as acquiring land, connecting to the grid, and purchasing equipment. Land acquisition typically costs around Rs. 5 lakhs per acre. To set up a 5 MW solar farm, a minimum of 25 to 30 acres is required and the land cost ranges between Rs. 1.25 crore to Rs. 1.5 crore. This makes up a considerable part of the investment involved.

Other than the land, the connection cost to the power grid is also significant. Bringing in one kilometer of a grid line costs about Rs. 15 lakh, though this would vary depending on the sort of line and distance from the nearest grid point. Based on average figures, the total cost for a 5 MW solar farm will be approx Rs. 63 L. Tax benefits could thus cut down the overall burden of investment. After setting off several deductions in tax to the tune of Rs. 10 L approximately hence the net investment would be approx Rs. 53 L.

In fact, the installation charges seem to be more substantial at the very outset. However, the project offers four annual savings of around Rs. 13 L. As a result, the investment can easily recover the payback period. And beyond that, the benefits towards the environment for carbon emission reduction make solar energy a sustainable source for any business and individual thinking of making an investment into renewable energy.