Solar Power Project Cost Profile

While developing a Solar Power Project (SPP) , it is imperative to understand the various costs involved in project. This will help us analyse the various aspects we need to work on for project and also where some investment could be trimmed, what will be the future feasibility of the planned project.

The following classification will highlight the cost incurred during development, installation and operation phase of the project:

Design and Engineering:

  • Site feasibility
  • Concept design
  • Interconnection management
  • Wetlands description/sketch 
  • Permits
  • Building design
  • High voltage design
  • Estimation of system cost
  • Estimate system performance
  • System optimization
  • Tool selection

Permits for SPP :

The permits for SPP vary from place to place and depends on the local regulations and nodal agencies.These costs are incurred on time and materials basis which depends on the permits required, size of the project and the bureaucratic work involved in getting the permits.

  • Land Conversion
  • Bore Well
  • Pollution/ waste disposal
  • Immediacy to adequate transmission and distribution is a very key factor in SPP.
  • Connectivity to the grid substation

For more details on permits, please go through this article on our blog (


Interconnection expenditure is met at three stages in the project development:

  • Application Submission: Processing fee and application charges
  • System Impact Study (SIS): This allows the developers to study the feasibility of SPP on the distribution network. This cost depends on the size of the project. We get a fair idea about the project cost after SIS.
  • System Installation: This depends on the equipment’s needed for inter-connection. The cost of line upgrades,reclosers and other hardware needed to ensure safety.

Construction and Equipment:

Construction costs are pivotal the asses the financial viability of SPP.

Some major factors which influence the construction cost:

  • Modules
  • Inverters
  • Mounting cost
  • Labor cost
  • Site work
  • Road construction
  • Low voltage equipment
  • High voltage equipment
  • Conduit and conductors
  • Storage/ rentals of equipments
  • Fencing for security purpose
  • Hardware for monitoring purpose

Cost for construction and equipment vary from place to place,  according the location of SPP it should be analysed.

Operation and Maintenance (O&M):

To ensure smooth operation and high performance of Solar plant we need to assess the O&M requirements for projects. O&M cost may see inflation in later years of the plant.

  • Monitor the system performance through data acquisition to ensure working  of solar plant as per design specifications.
  • Check for faulty parts.
  • Conduct Audits to analyse the changes needed in spare parts, if any.
  • Solar plants bear lower O&M cost as compared to fossil fuel based plants.


Taxation, like permits depends on the local regulation and authorities. Although plethora of tax rebates can be expected since Solar Power project development is being encouraged to promote clean generation of energy.


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