Benchmark Capital Cost Norms for solar pv and solar thermal power projects. (2013-14)

Capital cost norms have been a crucial factor for the manufactures, global trend for solar pv and solar thermal has been changing, be it related to the module prices going down or the land cost. To push the solar industry, certain regulation has to be upgraded from time to time.

To provide a wider scope, CERC decided to annually review the benchmark capital cost norms for solar pv and solar thermal power projects, stipulated under the regulations are the Regulation 57 (1) for Solar PV power Project and under Regulation 61 (1) for Solar thermal power project are applicable for solar power Projects for the year FY2012‐13. Exercising the power of tariff regulations, CERC invited suggestions and recommendations from the top players namely First solar, Moser Baer, Nano pv solar and others.

Based on the suggestions given by various stakeholders, it was observed that the module price has been in a slump. Most of the big players were selling their first tier crystalline modules in India at a price as low as $ 0.60/Wp. Since the trend showed a decline ,the commission decided the module cost of 0.60 US$/Wp for determination of benchmark capital cost of Solar PV for FY 2013‐14.Exchange rate is another important rate to be considered,the commission considers the past six month rate to come to an inference that the exchange rate to be 54.32/US$.Talk about modules,there is a cost involved known as module degradation, resulting from the continuous wear and tear in the use of modules. An additional 0.5 %of the modules cost every year after 4th year had been allowed on a notional basis. On similar lines, for the year 2013‐14 also, an additional module cost per year has been considered towards addition of 5 kW of the module  per MW considering 0.5% degradation per year from the 4th year to 25th year of operation. There has no change being made to Land cost,as it is retained at the price of 16.80 Lakh/MW. The commission didn’t not auxiliary cost to be a part of the norm.,as they concluded photovoltaic power plant consumes minimal energy for auxiliary purposes. Auxiliary power may be required for air‐conditioning in inverter and control rooms, cleaning water softening and pumping system Inverter cost proposed in the draft Order at 60 Lakhs/MW has been found reasonable by the commission.Below is the table showing the break capital cost of solar pv projects:

  Particulars Capital cost norm (In Lakh/MW)
1 PV Modules 325.92
2 Additional module cost as against


3 Land Cost 016.80
4 Civil and General Works 094.50
5 Mounting Structures 105.00
6 Power Conditioning Unit 060.00
7 Evacuation Cost up to Inter‐connection

Point (Cables and Transformers)

8 Preliminary and Pre‐Operative Expenses

Including IDC and contingency

  Total Capital Cost 797.01

Capital Cost of Solar Thermal projects:

There were suggestions from various holders,but there was no basis to justify.hence the study  report of Council on Energy, Environment and Water and Natural Resources Defense Council was considered .They reported that the cost of a parabolic trough CSP plant in India ranges from `10. 5 crore to `13 crore per MW (approximately $1.9 million to $2.3 million per MW) in capital cost, according to Indian developers consulted. It is also mentioned that storage increases the capital cost further but also increases electricity generation. Considering the same,the commission retained the project cost as proposed in the draft Order at `12.0 crore / MW.

For detailed information read here: CERC Regulation


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