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Return on Investment in Solar Power

  June 03, 2020      Benefits Of Solar Technology Installation

Return on Investment in Solar Power

Team / Solar Blog, Geo power India

 If you make an investment like going to solar, you'll ask yourself: what Would My ROI Solar Panels Be?

A solar power system generates a strong return on investment (ROI) and is more appealing than investing the capital in bank deposits or related investments.

Factors that decide the ROI include:

  • The size of the installed system.

  • How much power is used when solar energy is generated (self-consumption of solar energy)

  • The rate of buy-back received for excess solar power.

  • The amount you're charged for electricity from the grid.

To get an ROI calculation for solar power on your premises along with a quote for your system you may contact GeoPower India Pvt Ltd, or visit their website by clicking here

They 're going to be able to work out the size of the solar power plant that would earn you the highest ROI.

Example of ROI in Solar Power

 

Particular

Amount in RS.

Cost

              300,000 

Investment

              300,000 

Plant Size (KW)

                          6 

Price per Watt

                        50 

Current Tariff

                    7.50 

PPA Duration (Years)

                        25 

Yearly Tariff Increment

                     0.50%

MAT Tax

                     20.00%

Tax Rate

                   34.50%

Loan %

                      0.00%

Loan Amount

                        -   

ENTER Loan Term

                          7 

Number of EMI - Months

                        84 

Equity %

                   100.00%

Equity Amount

                  300,000 

Interest Rate on Loan

                   11.00%

Monthly Interest

                    0.92%

Degradation

                     0.80%

Misc. Inflation

                     0.00%

O&M Inflation

                     0.00%

O&M Cost Mn per KW

                       0.50 

Total O&M Cost

                      3,000 

Insurance Premium

                     0.00%

How Solar gives better returns than FD? 

The Average Units Produced is assumed at 1400 units per year per 1 KW of installed solar capacity although this may go as high a 1700 or may go lower to 1400 due to varying weather conditions.

Per Unit Rate is 7.50

Years

5 Year

10 Years

15 Years

20 Years

25 Years

Saving

74,027

330,655

582,953

830,986

1,074,819

 

What you invest: - Rs. 3,00,000

What you have saved at the end of 25 Years: - 

Rs. 3,00,000 PLUS Rs. 10,74,819 after recovering your initial investment.

In addition to this, you can claim 40% Tax depreciation which means your asset fully depreciates within few years. The life of the Solar plant is 25 Years so you enjoy Free electricity for life once the initial cost gets recovered in 3 years or so.  

There are also State specific schemes of the Govt like Mukhyamantri Generation Based Incentive which further reduces your cost recovery time and makes it very short. 

The return on Solar is upwards of 18%  and only gets better with time as Electricity becomes expensive whereas the Interest earned in FD is far less and invariable with an increase or decrease in Interest rates. 

How Risky Is Your Investment In Solar?

You can get insurance for your Solar plant so it’s virtually risk-free. Electricity cost keeps increasing every year and will be several time the current unit rate so since you get unit to unit adjustment with Net Metering so the amount that you save with Solar keeps increasing every year even if you take into the account the Less then 1% annual generation degradation that happens over 25 years. You also get virtually a Maintenance-free product. It’s everything great about Solar.  Time to get your asap before GOVT changes the rules and makes it less attractive like removing subsidy!!

And at the end of the article, I would like to mention that the solar plant is an Investment where you get high returns. It is a Far Better investment than keeping money in the bank.

Get Connected To GeoPower India Pvt Ltd-Rooftop Solar for best offers on solar:

https://www.geosolar.in/

https://www.facebook.com/Geosolar.in

Tags : Return on Investment in Solar Power, Benefits Of Solar Technology Installation, Solar Technology, Solar Power, ROI Solar Panels

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