Frequently Asked Questions

How does a solar Photovoltaic (PV) power work?

Sunlight (light, not heat) on photovoltaic modules produce direct current (DC) electricity which is converted to alternating current (AC) by a device called an inverter, which is then wired into your main service panel where it feeds your internal power grid.

What are the main components of a solar power system?

Solar modules (panels) and inverters are the main components of a solar power system and they constitute 70% of project cost.

How much area is required to install a rooftop solar system?

1 kWp solar system requires approximately 10 sq. m (or 100 sq. ft) of shadow free area. Therefore, one 1 MWp (1000 kWp) solar system would require 10,000 sq. m / 1,00,000 sq. ft / 3 acres of shadow free area.

What is the cost of a 1 MW solar system?

1 MWp (1000 kWp) solar system would cost around 5-6 crores, including all components, installation and commissioning, delivery and taxes.

What is the installation and commissioning period for a 1 MW solar power plant?

1 MWp (1000 kWp) solar plant would require 3-6 months for installation and commissioning, and typically only 30-45 days of actual work at the site.

Which Solar PV system is suitable for me?

Depending on your energy consumption pattern (consumption during day vs night), power outage pattern, availability of policies like Net Metering and access to grid power (for rural areas), you can choose between an on-grid and an off-grid Solar PV system. On grid systems are the most commonly used systems and are the least expensive and require very little maintenance. Off-grid systems use batteries which cost significantly more and need high maintenance.

How do I know that my system is working efficiently?

To keep a regular check on your system performance, it is recommended that you install a data logger (data monitoring device) along with your Solar PV system.
This device will allow you to compare the actual with the estimated performance on a daily, monthly and annual basis.

What is the unit of electricity?

Electricity is measured in kWh (Kilo Watt Hour). It is the amount of electricity consumed by an appliance in a specified period. For example, 100W bulb * running for 1 hour = 100Wh which is equal to 0.1 kWh (unit).
Your electricity bill mentions the kWh (Units) consumed by you in your billing cycle.

What are the key factors that affect solar power generation?

To ensure that the generation from your Solar PV system is maximized, the following should be kept in mind:

Location (Solar Irradiation/ weather conditions)
Plant layout
Shading and roof orientation
System design
Equipment quality
Operations and maintenance

Will my roof be able to bear the weight of a Solar PV system?

A Solar PV system generally weighs 15 to 20 Kg per square meter. This weight can be easily borne by most roofs. Since the life of a Solar PV system is about 25 years or more, do ensure that your roof is in good condition to bear the system’s load over its lifetime.

How much time does it take to install a solar PV system?

It takes about 2-4 weeks to install a smaller system and about 4-8 weeks for larger systems. However, the actual construction time at the site is much lower since almost half of the time is spent on off-site activities such as design, engineering, procurement, etc. In certain cases, there may be variations to these timelines on account of access to the site, rains, etc.

What factors are important to consider during Solar PV system installation?

Good solar installers follow standard procedures and quality standards. So once you’ve chosen the right installer, you don’t have to worry about supervision.

However, it may be a good practice to:

Ask for layout drawing and bill of material.
Ensure that the delivered material is as per the bill of material, is damaged free and is kept at a safe place.
Ensure that cables and wires are properly tied and clamped.

What would be the annual maintenance cost for a solar PV system?

The annual maintenance and recurring costs are almost negligible, since there are no moving parts and the input fuel (sunlight) is free. For optimum performance, the system only requires cleaning of modules and basic preventive and corrective maintenance. However, for off-grid systems where batteries are used, the maintenance costs are higher on account of battery replacement every 3-5 years. To ensure high generation and low maintenance cost, regular monitoring through data loggers is highly recommended. Typically, the maintenance costs for smaller Solar PV systems is about 2% of the initial system cost, and for larger systems is about 1% of the initial cost.

What permits & approvals do I need to install a solar PV system?

No permits would be needed, if you are going to install off grid Solar PV system or grid-connected system for captive (self) consumption. For net metering and gross metering system, certain permits and approvals are required.

For Net & Gross Metering:

1. Approval from DISCOM for grid connectivity.
2. CEIG(Chief electrical inspector to the government of state) approval for the capacity more than 10 KW(This capacity may vary from state to state).

What is a Solar PV System and how does it work?

PV, short for Photovoltaic, derives its name from the process of converting light (‘photo’) directly into electricity (‘voltaic’). Simply put, a Solar PV system is a power station that generates electricity from sunlight.

The main components of a Solar PV system are:

Solar Panels or Modules: Solar panels consist of a group of small cells made from semiconductor material. When the sun’s light falls on the modules, it excites the electrons, thereby creating direct current (DC).
Solar Inverter: The DC electricity goes into an inverter that converts it into alternating current (AC). We use AC for running our household or office or factory equipment.
Storage Battery (optional): The best use of solar energy is to consume it while it is being generated. If the requirement is to store this power and consume it in the non-sunny hours, then solar energy can be stored in batteries for later consumption.

Does a Solar PV system produce same energy output throughout the day?

Since Solar PV works on the basis of the intensity of sunlight it gets, your solar system typically wakes up at around 6am in the morning and goes to sleep at about 6 or 7pm in the evening. The energy output increases gradually and peaks at around noon and then gradually decreases as the Sun starts setting. But since the solar energy produced integrates either with your existing electrical connection or with your batteries, the running of your electrical equipment is not impacted. Moreover, if your Solar PV system is designed well, all your electrical equipment is totally safe.

What factors are important to consider when planning to go solar?

When planning to go solar, it is important to consider:

How much of your energy needs can you meet with solar?
How much can you save by going solar?
Do you have enough shadow-free space (land or roof)?
How much do you want to invest in your solar PV system?
Every Solar PV system is customized based on your site conditions. Therefore, you need a fair assessment of your energy requirements, site conditions and the solar energy generation potential at your site which would directly impact your savings.

Can solar be my sole energy source?

Technically speaking, yes, if batteries are used. But practically, if grid power is available, then it is recommended to use solar in combination with grid. Solar PV can be integrated with your existing power sources (like grid power, inverter, diesel generator, etc.) in such a manner that the first priority is automatically always given to the solar power to be consumed first. However, if you are using Solar PV for night time usage or in a remote location, it is quite common to have Solar systems which are battery-backed.

What is the life and reliability of a Solar PV System?

Solar PV is a highly proven and reliable technology and have been in use since 1950s. A PV system that is designed, installed, and maintained well will operate for 25 years or even more than 25 years. The Inverters, which are an integral part of a Solar PV system, may need a replacement once in the 25 years lifetime of the system. Moreover, since there are no moving parts (unless you are using tracking devices to move modules tilt with the movement of the Sun), there is practically negligible wear and tear.

What is Group Captive Power Procurement Model?

A power asset in which captive buyer(s) consume at least 51% of the generated electricity and own at least 26% of the equity is known as Group Captive Power Procurement Model.

How can a corporate buyer avail the Open Access benefits of a group captive project without completely owning the project?

The corporate buyer must hold at least 26% of the equity while the developer arranges for the rest 74%. A Long-term Power Purchase Agreement (PPA) can be signed on mutually agreed terms between the developer and the buyer. In such a project, the O&M responsibilities are usually passed on to the developer

What are benefits of a group captive project?

For a consumer which doesn’t want to invest 100% of the project cost, a group captive project will provide the lowest landed cost of power with minimum investment, because it is exempted from certain grid charges and particularly Cross Subsidy Surcharge.

While looking at a Group Captive project, what should a corporate buyer do to avoid any risk of being hit with charges and legal challenges?

The corporate buyer should ensure that a Group Captive project is fully compliant with the spirit of the law, and with the Electricity Act and the proposed amendments to the Electricity Rules by following two simple guidelines:

  • Equity participation: A genuine equity contribution, equal to 26% of the equity cost, assuming 70/30 debt to equity ratio
  • Economic participation: Which means paid up equity share capital with full rights such as, value, share of profit/dividends, capital appreciation, voting rights, transfer of shares etc. should be applicable for all shareholders

Is it possible for a corporate buyer to terminate the PPA in a group captive model?

Given the regulatory requirement for the lead captive buyer to own a minimum of 26 percent of the power generating plant, ownership must be transferred to another captive buyer or back to the primary investor if the PPA terminates or expires. Parties typically agree to a put/call option structure to transfer the shares upon expiry/termination of the PPA. If either the captive generator or the buyer is a non-resident or foreign-owned and controlled entity, then subscription/purchase of equity shares as well as subsequent transfer must comply with the Reserve Bank of India’s pricing guidelines.

What do you mean by Open Access Power?

Open access power is a regulatory mechanism that allows a grid-connected bulk consumer with a contract demand of 1000 kVA or above to meet a part of or their entire electricity requirements via alternate energy sources.

Which power procurement models can be used in Open Access?

Typically, two procurement models are used: third-party PPAs and captive or group captive models.

  • Third-Party PPAs – In this model, a third-party investor or Solar developer invests in an Open Access project and sells the power to corporates via a PPA, eliminating upfront investment and Operation & Maintenance (O&M) responsibilities is at the developers end. However, the corporate buyer is liable to pay the Open Access charges incurred from the wheeling of power from the generated site to the buyer’s location.
  • Captive / Group Captive Model – In the captive model, the corporate buyer makes an upfront capital investment in the Open Access project. The buyer owns, operates, and maintains the power-generating asset. Open access charges are also applicable but unpredictable charges, such as the cross-subsidy surcharge and additional surcharge, are waived off. In addition, the buyer (i.e., the owner of the power generating asset) is also eligible to claim tax benefits through accelerated depreciation. Another variant of the captive model is the group captive model, wherein the Open Access project is developed for collective usage by many corporate buyers. The model is considered group captive if at least one of the corporate buyers holds a minimum of 26% of the equity in the project and consumes at least 51% of the power generated.

What are the various Open Access charges?

Open access charges under a utility-scale renewable project vary with location and procurement models. It is worth noting that renewable power plants under a captive or group captive model are generally exempted from many of these charges, varying by state. Various charges under the Open Access mechanism include the following:

  • Transmission charges – The transmission charges are payable to the transmission company for using the transmission infrastructure.
  • Wheeling charges – The wheeling charges are payable to the distribution company for using the distribution network. They are applicable to all power generating plants connected to the distribution grid at 33 kV or below and using Open Access.
  • Transmission losses – These are the electricity losses in the transmission line between the point of generation and the point of consumption. Typically, these are in the range of 2% to 6%.
  • Wheeling losses – These are the electricity losses incurred by the distribution network. They are determined by the State Electricity Regulatory Commissions (SERCs) for each buyer category and typically range between 4% and 10%.
  • Cross-subsidy surcharge (CSS) – These are payable by commercial and industrial buyers to fund the tariff subsidy for agricultural and residential buyers. When a buyer opts for Open Access, the distribution company loses high-value income that would have subsidized low-income electricity users. CSS is designed to compensate for the lost subsidy.
  • Additional surcharge (AS) – AS is imposed to recover the cost of standard assets when corporate buyers leave the distribution company and procure power through Open Access. The utility needs to prove to the regulator that assets are stranded to impose AS.
  • Banking charges – Banking of power is when a developer can literally “store” the power generated by the utility if the buyer is unable to use the power at the time of generation. Methods of such electricity accounting vary from state to state, but broadly, it is either done on time-block basis (15 minutes to few hours or peak and non-peak hours) or on gross monthly basis. The state regulators set banking regulations allowing utilities to charge the generator for the banking facility and define periods during which the banked power may be withdrawn.

What are the recommendations for corporate buyers while evaluating Open Access renewable PPAs?

The economic case for renewable PPAs is now sufficiently compelling to undertake the challenge of evaluating renewable procurement options and negotiating contracts. The recommendations for the same are as follows:

  • Due diligence based on company locations – Location influences economics and the risk profile of any renewable power procurement. Grid power tariffs, state-level regulations, Open Access charges, and renewable resources are all location-specific and are important inputs for the commercial evaluation of a project.
  • Understanding Open Access risks – For procuring power from a utility scale renewable project, a corporate buyer should evaluate whether access to the grid is possible at the location and if the Open Access charges are currently favorable. Corporate buyers should then aim to understand regulatory risks from changes in Open Access regulations and evaluate the impact of potential yearly changes to Open Access charges. Companies operating out of multiple locations across India should employ a state-specific strategy for renewable adoption.
  • Due diligence on the developer – To ensure reliability and availability of power as per contracted terms, corporate buyers should carefully choose the developer of their corporate renewable PPA considering the developer’s experience in executing quality projects, assessing their long-term interest in operating power plants and judging their financial strength to build and operate these plants. Evaluating equipment for use in the project can reassure the corporate buyer during the plant development stage.
  • PPA negotiation – Supply-demand dynamics make corporate PPAs a buyers’ market. This gives sufficient leverage to corporate buyers in negotiation. A competitive tender process and one-to-one negotiations can help reveal the cost of renewable power for a specific location. For a favorable location in India, it should be possible to realize a 20 – 30 percent cost discount as compared to grid power tariffs. From a corporate buyers’ perspective, the key to any PPA negotiation is to strike a balance between de-risking a project and discovering the lowest cost of power. In the past, PPA s negotiated only keeping in mind the lowest cost of power, became unfinanceable for the developer, and were never built. Similarly, a corporate buyer can use its leverage to negotiate terms (other than cost) expressly in its favor, but increased supplier risk can result in a higher tariff for the corporate buyer.

What do you mean by Corporate PPA?

Corporate PPA is a power purchase agreement between a private company and a power producer (developer, independent power producer, or investor) to purchase electricity at a mutually agreed tariff, tenor, and capacity.

What are the types of corporate PPAs in India?

There are three common types of corporate PPAs in India, as follows:

  • For the sale of power from a rooftop solar project
  • For the sale of power from a utility-scale renewable power project
  • For the sale of power from a utility-scale renewable power project structured as a open-access project

The corporate buyer must evaluate the available procurement options based on the company’s sustainability and purchasing strategy, the characteristics and location of its electricity demand, local resource availability, and state-level regulations.


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