Ultimate Guide to Setting Up a 1 MW Solar Power Plant in India: Cost, Income, and More

India’s solar energy sector is booming, driven by government incentives and rising electricity costs. A 1 MW solar power plant is a powerful solution for businesses, industries, and communities aiming to cut energy bills and embrace sustainability. This guide offers a detailed, practical, and user-friendly breakdown of everything you need to know about a 1 MW solar plant—from costs and specifications to income and installation. Packed with tables, bullet points, and real-world insights, this blog is designed to help you make informed decisions and outshine competitors in India’s solar market.

What is a 1 MW Solar Power Plant?

A 1 MW solar power plant generates one megawatt (1,000 kilowatts) of electricity using photovoltaic (PV) panels. It’s ideal for large-scale setups like factories, hospitals, or grid supply, delivering clean energy and significant savings.

• Purpose: Powers high-energy operations or feeds the grid.

• Lifespan: 25–30 years with minimal maintenance.

• Environmental Impact: Cuts ~1,500–1,800 tons of CO2 emissions yearly.

• Why Choose It?: Reduces electricity costs and supports India’s renewable energy goals under schemes like PM Surya Ghar.

This plant is a strategic investment for businesses seeking energy independence and long-term profitability.

Key Specifications of a 1 MW Solar Power Plant

Understanding the technical aspects ensures efficient planning. Here are the key specifications of a 1 MW solar plant:

Component	Specification
Capacity	1 MW (1,000 kW)
Daily Output	~4,000–4,800 kWh (units)
Monthly Output	~1,20,000–1,44,000 kWh
Annual Output	~14,40,000–17,28,000 kWh
Solar Panels	2,500–3,200 (320W–400W each)
Inverters	1,000 kW capacity (central or string inverters)
Land Required	4–5 acres (shade-free)
Mounting Structures	Galvanized steel or aluminium, fixed or seasonal tilt
Monitoring System	Cloud-based, real-time tracking for performance and fault detection

• Panel Types: Monocrystalline (18–22% efficiency) or polycrystalline (15–18% efficiency).

• Inverters: Convert DC to AC with 98%+ efficiency.

• Cables: Low-loss, UV-resistant for durability.

• Additional Features: Anti-soiling coatings and smart trackers for enhanced output.

These specs ensure reliable performance tailored to India’s diverse climates.

Cost of a 1 MW Solar Power Plant in India

The 1 MW solar power plant cost in India ranges from ₹4 crore to ₹6 crore (USD 480,000–720,000) as of 2025. Costs depend on location, equipment quality, and add-ons like battery storage or trackers.

Cost Breakdown

Component	Cost (% of Total)	Estimated Cost (₹)
Solar Panels	50–55%	₹2–2.5 crore
Inverters	10–15%	₹50–75 lakh
Mounting Structures	9–15%	₹35–50 lakh
Wiring & Cables	5–10%	₹20–40 lakh
Installation & Labour	10–15%	₹40–60 lakh
Battery (Optional)	10–15%	₹40–60 lakh
Monitoring Systems	2–5%	₹10–20 lakh

• Cost Influencers:

  • Location: High-irradiance states (e.g., Rajasthan, Gujarat) reduce panel needs.

  • Panel Type: Monocrystalline costs more but saves space.

  • Land Cost: ₹3–7 lakh/acre, depending on region.

  • Add-Ons: Trackers or batteries increase costs but boost efficiency.

Pro Tip: Opt for BIS-certified panels and Tier-1 inverters for durability and eligibility for government subsidies.

Types of 1 MW Solar Power Plants

Choosing the right type depends on your location, energy needs, and budget. Here’s a detailed look at the three main types:

1. On-Grid Solar Plant

An on-grid solar plant connects to the government grid, making it the most cost-effective option for urban and industrial setups.

• How It Works:

  • Generates power and feeds it to the grid.

  • Uses grid power during low sunlight (e.g., night or cloudy days).

  • Supports net metering, allowing credits or payments for excess power.

    
    

• Advantages:

  • Lowest cost (no batteries needed).

  • Revenue from selling surplus power.

  • Minimal maintenance (5–7% of annual costs).

    
    

• Disadvantages:

  • No power during grid outages.

  • Requires grid connection approval from DISCOMs.

    
    

• Best For: Factories, offices, or institutions in cities like Delhi, Mumbai, or Ahmedabad.

• Example: A textile factory in Surat uses an on-grid plant to offset 80% of its electricity bill.

2. Off-Grid Solar Plant

An off-grid solar plant operates independently, ideal for remote areas without grid access.

• How It Works:

  • Stores excess energy in batteries for use during low sunlight.

  • Fully self-sufficient, no grid connection needed.

    
    

• Advantages:

  • Reliable power in remote areas.

  • No dependency on grid reliability.

    
    

• Disadvantages:

  • High cost due to batteries (₹40–60 lakh additional).

  • Battery replacement every 5–7 years.

  • Higher maintenance costs (10–15% annually).

    
    

• Best For: Rural schools, hospitals, or farms in areas like rural Bihar or Odisha.

• Example: A dairy farm in Chhattisgarh uses an off-grid plant to power milking machines.

3. Hybrid Solar Plant

A hybrid solar plant combines grid connectivity with battery backup, offering flexibility and reliability.

• How It Works:

  • Generates power and feeds excess to the grid.

  • Stores energy in batteries for outages or peak demand.

  • Supports net metering and backup power.

    
    

• Advantages:

  • Uninterrupted power during grid failures.

  • Balances cost and reliability.

  • Ideal for areas with inconsistent grid supply.

    
    

• Disadvantages:

  • Moderate cost (higher than on-grid, lower than off-grid).

  • Battery maintenance required.

    
    

• Best For: Semi-urban areas or industries with frequent power cuts, like in Uttar Pradesh or Karnataka.

• Example: A hospital in Pune uses a hybrid plant to ensure critical equipment runs 24/7.

Type	Cost	Grid Dependency	Best For
On-Grid	₹4–5 crore	Fully dependent	Urban areas with stable grid
Off-Grid	₹5–6 crore	None	Remote areas
Hybrid	₹4.5–5.5 crore	Partial	Areas with frequent power cuts

Unique Insight: Hybrid plants are gaining traction in India due to increasing grid outages, offering a balanced solution for reliability and cost.

Investment Models for a 1 MW Solar Power Plant

Financing a 1 MW solar plant is critical to its success. The two primary models in India are CAPEX and OPEX, each tailored to different financial strategies.

1. CAPEX Model (Capital Expenditure)

In the CAPEX model, you invest upfront to own and operate the solar plant, ideal for long-term savings and control.

• How It Works:

  • Pay ₹4–6 crore to set up the plant.

  • Own all generated electricity and revenue.

  • Benefit from free electricity post-payback (5–8 years).

    
    

• Advantages:

  • Full ownership and control.

  • Higher savings over 25+ years.

  • Eligible for government subsidies (up to 30%) and tax benefits (40% accelerated depreciation).

    
    

• Disadvantages:

  • High initial investment.

  • Requires maintenance planning (₹5–10 lakh/year).

    
    

• Best For: Large businesses, industries, or institutions with strong finances, like manufacturing units or universities.

• Example: A cement factory in Rajasthan invests ₹4.5 crore in a CAPEX model, saving ₹50 lakh/year on electricity.

• Financing Option: Avail bank loans covering 70% of costs at 6–8% interest.

2. OPEX Model (Power Purchase Agreement - PPA)

The OPEX model involves no upfront cost, as a third-party developer installs and maintains the plant, and you pay for the power.

• How It Works:

  • Developer funds and installs the plant.

  • Sign a PPA (10–25 years) to buy power at ₹3–5/unit (30–40% cheaper than grid rates).

  • Developer handles maintenance and operations.

    
    

• Advantages:

  • Zero upfront cost, ideal for budget-constrained businesses.

  • Predictable electricity costs.

  • No maintenance hassles.

    
    

• Disadvantages:

  • No ownership of the plant.

  • Long-term commitment to the developer.

  • Lower long-term savings compared to CAPEX.

    
    

• Best For: Small businesses, schools, or startups with limited capital, like retail chains or co-working spaces.

• Example: A mall in Bengaluru signs a 15-year PPA, paying ₹4/unit and saving ₹20 lakh/year.

• Unique Insight: PPAs are popular in industrial hubs like Gujarat, where businesses prioritise cash flow over ownership.

Model	Upfront Cost	Ownership	Best For	Savings Potential
CAPEX	₹4–6 crore	Consumer	Cash-rich businesses	High (₹50–70 lakh/year)
OPEX	Low/Nil	Third-party	Businesses with limited capital	Moderate (₹20–40 lakh/year)

Pro Tip: Combine CAPEX with bank loans and subsidies for maximum ROI.

Income from a 1 MW Solar Power Plant

A 1 MW solar power plant generates significant revenue through savings and sales, making it a lucrative investment.

• Generation: ~14,40,000–17,28,000 units/year (varies by location).

• Revenue: ₹43–86 lakh/year (at ₹3–5/unit).

• Payback Period: 5–8 years.

• Post-Payback: Minimal costs (₹5–10 lakh/year), high profits.

  
  

Income Sources

1. Electricity Savings: Replace grid power (₹7–10/unit) with solar (₹0 after payback).

2. Net Metering: Sell excess power to the grid at ₹3–5/unit.

3. Government Incentives:

   • Up to 30% subsidy via MNRE or PM Surya Ghar.

   • 40% accelerated depreciation for tax benefits.

   • State-specific incentives (e.g., Gujarat’s solar policy).

Factor	Impact on Income
Tariff Rate	Higher rates (₹5/unit) boost revenue.
Sunlight Hours	5–6 hours/day (e.g., Tamil Nadu) increases output.
Maintenance	Low costs (₹5–10 lakh/year) ensure profitability.

Example: A 1 MW plant in Andhra Pradesh generates 15,00,000 units/year, saving ₹60 lakh annually at ₹4/unit.

How Much Power Does a 1 MW Solar Plant Generate?

A 1 MW solar plant produces:

• Daily: ~4,000–4,800 units (kWh).

• Monthly: ~1,20,000–1,44,000 units.

• Yearly: ~14,40,000–17,28,000 units.

  
  

Factors Affecting Output:

• Sunlight: 4–6 peak sun hours/day (e.g., Rajasthan: 5.5 hours, Northeast: 4 hours).

• Panel Efficiency: Monocrystalline (20%+) outperforms polycrystalline (16%+).

• Maintenance: Regular cleaning boosts output by 5–10%.

  
  

This can power ~200–250 homes or a medium-sized factory.

How Many Solar Panels Are Needed for 1 MW?

The number of panels depends on their wattage:

• 400W Panels: ~2,500 panels.

• 320W Panels: ~3,125 panels.

Calculation:

• 1 MW = 1,000,000 watts.

• Divide by panel wattage (e.g., 1,000,000 ÷ 400 = 2,500).

Pro Tip: Use higher-wattage panels (400W+) to reduce land use and installation costs.

How Much is 1 MW of Solar Energy?

1 MW of solar energy translates to:

• Power: 1,000 kW capacity.

• Energy: ~14,40,000–17,28,000 kWh/year.

• Value: ₹43–86 lakh/year (at ₹3–5/unit).

It’s enough to power a school, hospital, or small industrial unit, or feed the grid for revenue.

Area Required for a 1 MW Solar Plant

A 1 MW solar plant requires 4–5 acres of shade-free land.

• Per kW: ~6 sq.m (100 sq.ft).

• For 1 MW: ~6,000 sq.m (1,00,000 sq.ft).

• Factors:

  • Panel Type: Monocrystalline needs ~4 acres, polycrystalline ~5 acres.

  • Trackers: Increase land use by 10–15% but boost output by 20%.

  • Layout: Optimal tilt (15–25°) and spacing minimise land needs.

Pro Tip: Choose flat, south-facing land with no obstructions for maximum efficiency.

Bank Loans for a 1 MW Solar Power Plant in India

Banks offer loans covering up to 70% of the project cost, making ownership accessible.

• Eligibility:

  • Valid BIS/IEC certifications for equipment.

  • MSMEs or businesses with prior solar projects get priority.

  • Credit score of 700+ for new developers.

• Key Schemes:

  • SBI Surya Shakti: Low-interest loans for solar projects.

  • IREDA: Renewable energy financing with flexible terms.

  • Other Banks: PNB, HDFC, and ICICI offer green loans.

• Benefits:

  • Interest rates: 6–8% (lower for renewables).

  • Tenure: 5–10 years.

  • Retain ownership unlike PPAs.

Example: A ₹4.5 crore project with a 70% loan (₹3.15 crore) reduces upfront costs to ₹1.35 crore.

Equipment in a 1 MW Solar Plant

A 1 MW solar plant relies on high-quality components:

1. Solar Panels: Convert sunlight to DC power (monocrystalline preferred).

2. Inverters: Transform DC to AC (string or central inverters).

3. Mounting Structures: Fixed or seasonal tilt, made of galvanized steel.

4. Cables & Wiring: UV-resistant, low-loss for efficient power flow.

5. Power Conditioning Unit (PCU): Regulates voltage and frequency.

6. Monitoring Systems: Cloud-based for real-time output tracking.

7. Batteries (Optional): Lithium-ion or lead-acid for off-grid/hybrid systems.

Equipment	Role	Cost Contribution
Solar Panels	Generate electricity	50–55%
Inverters	Convert DC to AC	10–15%
Mounting Structures	Support panels	9–15%

Unique Insight: Invest in IoT-based monitoring systems for predictive maintenance, reducing downtime by 15%.

Installation Process of a 1 MW Solar Power Plant

Installing a 1 MW solar plant takes 3–6 months. Here’s the step-by-step process:

1. Site Selection:

   • Choose 4–5 acres with 5–6 hours of sunlight.

   • Ensure grid proximity for on-grid systems.

2. Permits & Approvals:

   • Obtain environmental, safety, and land-use permits.

   • Secure net metering approval from DISCOMs (15–30 days).

3. Component Selection:

   • Choose Tier-1 panels (e.g., Adani, Vikram Solar) and inverters (e.g., SMA, ABB).

   • Verify BIS/IEC certifications.

4. System Design:

   • Plan panel layout (15–25° tilt for India).

   • Design electrical and monitoring systems.

5. Installation:

   • Erect mounting structures (1–2 weeks).

   • Install panels, inverters, and wiring (2–3 weeks).

   • Set up monitoring tools (1 week).

6. Testing & Commissioning:

   • Test components for efficiency (1 week).

   • Connect to grid or load (1–2 weeks).

Timeline Breakdown:

• Permits: 1–2 months.

• Installation: 2–3 months.

• Commissioning: 2–4 weeks.

Pro Tip: Hire MNRE-approved EPC contractors for faster approvals and quality assurance.

How to Choose the Best Solar Power Plant?

Selecting the right 1 MW solar plant requires careful planning:

1. Assess Energy Needs:

   • Calculate daily consumption (~4,000–4,800 units).

   • Match capacity to demand (e.g., factories need 1–2 MW).

2. Evaluate Location:

   • Choose high-irradiance areas (e.g., Gujarat: 5.5 hours/day).

   • Ensure land is flat, shade-free, and affordable (₹3–7 lakh/acre).

3. Choose Reliable Vendors:

   • Partner with MNRE-approved EPC companies (e.g., Tata Power Solar, Waaree).

   • Check certifications and project portfolios.

4. Compare Panel Efficiency:

   • Monocrystalline (20%+ efficiency) for high output.

   • Polycrystalline for budget-conscious projects.

5. Explore Incentives:

   • Avail 30% subsidy via MNRE or PM Surya Ghar.

   • Claim 40% accelerated depreciation for tax savings.

6. Plan Financing:

   • CAPEX for ownership, OPEX for low upfront costs.

   • Secure bank loans for CAPEX projects.

Unique Insight: Use drone-based site surveys for precise land assessment, saving 10–15% on planning costs.

1 MW Solar Power Plant Project Report

A project report is essential for approvals, financing, and investor confidence. It includes:

• Project Overview: Location (e.g., Jaipur), capacity (1 MW), and goals (energy savings or grid supply).

• Technical Details: Panel type (monocrystalline), inverter specs (1,000 kW), and layout.

• Cost Estimation: ₹4.5 crore (including land, equipment, installation).

• Revenue Projections: ₹50–70 lakh/year from savings and sales.

• Incentives: 30% subsidy, 40% tax depreciation.

• Risk Analysis: Weather (monsoons), technical failures, or policy changes.

Sample ROI:

• Investment: ₹4.5 crore (₹3.15 crore loan, ₹1.35 crore equity).

• Annual Revenue: ₹60 lakh (at ₹4/unit).

• Payback: 6–8 years.

• ROI: 8–12% over 25 years.

Pro Tip: Include a 5-year maintenance plan in the report to reassure investors.

A 1 MW solar power plant is a game-changer for Indian businesses, offering 14,40,000–17,28,000 units/year and ₹43–86 lakh in annual revenue. Costing ₹4–6 crore, it delivers a 5–8 year payback with minimal maintenance. Choose between on-grid, off-grid, or hybrid systems and CAPEX or OPEX models based on your budget and goals. Leverage MNRE subsidies, bank loans, and trusted vendors like Tata Power Solar to maximise ROI. Start your solar journey today

FAQs About 1 MW Solar Power Plants

What is the cost of a 1 MW solar power plant in India?

A: ₹4–6 crore, depending on panel type, location, and add-ons like batteries.

How much land is required for a 1 MW solar plant?

4–5 acres of shade-free land, less with monocrystalline panels.

How many units does a 1 MW solar plant produce daily?

~4,000–4,800 units, depending on sunlight and efficiency.

Can I get a bank loan for a 1 MW solar plant?

Yes, banks like SBI and IREDA offer 70% financing at 6–8% interest.

What is the payback period for a 1 MW solar plant?

5–8 years, driven by savings, sales, and subsidies.

How reliable is a 1 MW solar plant on cloudy days?

Output drops by 20–30%, but hybrid systems with batteries ensure continuity.

Which is better—CAPEX or OPEX?

CAPEX offers ownership and higher savings; OPEX suits low-budget projects with no upfront