A 2 MW (megawatt) solar plant is the workhorse size of Indian industrial solar in 2026. It is big enough to replace 30-40% of a mid-size factory’s grid draw, small enough to fit on 8-10 acres near the plant, and it sits at the threshold where captive, group captive, and open-access structures all become bankable. In 2026, an all-in 2 MW ground-mount project costs ₹7-₹7.6 crore on a turnkey EPC basis, generates 30-34 lakh units (kWh) a year in good-irradiance states, and clears an Internal Rate of Return (IRR) of 16-22% post-Accelerated Depreciation (AD) for a CAPEX investor with usable tax liability.
This guide is written for three readers: the factory owner weighing a captive 2 MW against a third-party Power Purchase Agreement (PPA), the industrial investor or HNI evaluating 2 MW as a yield asset, and the CFO building the board paper. It covers the full stack, land requirement, EPC cost per MW, total project cost, generation math, revenue routes, financing structure, payback, IRR, and the mistakes that sink Year-2 returns. If 2 MW is bigger than your load, start with our 1 MW solar plant cost and ROI guide and scale the same model down.
Direct answer. A 2 MW solar plant in India in 2026 costs ₹7-₹7.6 crore all-in (₹35-₹38 per Watt), needs 8-10 acres of land, and generates 30-34 lakh kWh a year at 17-19% Capacity Utilisation Factor (CUF). A CAPEX investor claiming Accelerated Depreciation earns 16-22% equity IRR with 3.5-5.5 year payback; without AD, IRR falls to 12-15%. IREDA debt covers 70-75% of cost at 9.5-11% for 10-13 years.
The rest of this guide prices each of those numbers, state by state and structure by structure, so you can test any EPC quote or developer pitch against a defensible benchmark.
Why 2 MW Is the Sweet Spot for Industrial Captive Solar in 2026
Two MW is the smallest capacity at which ground-mount economics fully kick in for a single industrial consumer. Below 1 MW, rooftop or net-metered systems usually win because they avoid land cost and evacuation infrastructure. Above 5 MW, you enter Independent Power Producer (IPP) territory where land aggregation, dedicated substations, and multi-buyer off-take add complexity that a single factory does not need. Between those bounds, 2 MW gives a manufacturing unit a self-contained captive asset that offsets a serious share of its DISCOM bill.
India’s commercial and industrial (C&I) open-access segment has been the fastest-growing slice of new solar capacity, driven by retail industrial tariffs of ₹7-₹12 per kWh against solar landed costs of ₹3.50-₹5.00 per kWh, per Mercom India C&I market reporting through 2025. A factory paying ₹8 per unit to the DISCOM and replacing 30 lakh units a year with captive solar saves ₹2.4 crore gross before charges. That is the pool of value a 2 MW plant unlocks, and why the segment attracts everyone from textile units in Surat to ceramic plants in Morbi.
Three forces shape 2026 economics for this size. Module prices have stabilised near US$0.10-0.12 per Watt at the factory gate after the 2023-24 oversupply correction, per BloombergNEF module index data. Approved List of Models and Manufacturers (ALMM) compliance under the Ministry of New and Renewable Energy (MNRE) keeps domestic module prices 8-12% above imported lines. And debt is accessible: the Indian Renewable Energy Development Agency (IREDA) funds 70-75% of project cost at 9.5-11% for tenures of 10-13 years, which is the cheapest rupee debt available to a non-utility solar investor.
2 MW Solar Plant Cost in India 2026: Full CAPEX Breakdown
The all-in 2 MW turnkey quote of ₹7-₹7.6 crore breaks into four cost buckets. The numbers assume a Direct Current (DC) capacity of 2.3 MWp (megawatt-peak), the standard 1.15x DC-over-AC ratio that maximises inverter loading, fixed-tilt mounting, and a 33 kV evacuation line within 3 km of a substation. Per-MW cost runs ₹3.5-₹3.8 crore, slightly below the ₹3.5-₹4 crore per-MW band for a 1 MW project because civil, evacuation, and EPC overheads spread over twice the capacity.
| Bucket | Share | Cost for 2 MW (₹) | Notes |
|---|---|---|---|
| Modules (ALMM tier-1) | ~50% | ₹3.5-₹3.8 cr | 540-620 Wp mono PERC or TOPCon |
| Inverters (string or central) | ~11% | ₹75 lakh-₹95 lakh | 2 central units or 10-16 string units |
| Balance of System, civil, structure | ~26% | ₹1.8-₹2.0 cr | Cabling, transformer, switchgear, mounting, fencing |
| EPC margin + commissioning | ~13% | ₹90 lakh-₹1.0 cr | Design, project management, testing, CEIG liaison |
| Total | 100% | ₹7.0-₹7.6 cr | ₹35-₹38 per Watt |
Land cost sits outside the EPC quote in most contracts. At ₹5-₹15 lakh per acre for rural industrial-belt land, 8-10 acres adds ₹40 lakh-₹1.5 crore depending on district. Grid connection is the other off-quote item: a 3 km, 33 kV dedicated line with bay extension runs ₹30-₹50 lakh. A realistic “cheque-written” total for a 2 MW captive plant is therefore ₹7.5-₹9 crore, not the headline EPC number. Keep that distinction in your board paper.
💡 Fast tip
A clean 2 MW ground-mount quote in 2026 lands at ₹36-₹38/W including transformer and evacuation-adjacent works. Below ₹32/W, expect sub-spec structures or cable cross-sections. Above ₹42/W, the quote is loading margin or unusual site cost. Anchor every negotiation on cost per Watt, not the lump sum.
Two specification choices move the CAPEX band materially. Central inverters are cheaper per kW, but string inverters give better partial-shading performance and cheaper replacement; QBits Energy’s guide on solar inverter sizing walks through how to size the split against your DC/AC ratio. And single-axis trackers add ₹30-₹40 lakh per MW while lifting generation 15-18%, which pays back only in high-irradiance states with cheap land. For most captive buyers in Gujarat or Maharashtra, fixed tilt with TOPCon modules is the value optimum in 2026.
Land, Site, and Grid Connection Requirements for a 2 MW Plant
A 2 MW ground-mount solar plant needs 8-10 acres of relatively flat, unshaded land, roughly 32,000-40,000 square metres. The spread depends on module efficiency, tilt angle, and inter-row spacing. TOPCon 620 Wp modules on fixed tilt pack into 8 acres; older mono PERC modules need closer to 10. Single-axis trackers push the requirement up 10-15% because rows must be spaced wider to avoid self-shading. Budget land at 4-5 acres per MW as the national thumb rule, consistent with MNRE park-planning norms.
Site quality matters as much as acreage. The checklist our engineering team runs before quoting a 2 MW ground-mount covers soil bearing capacity for pile foundations, flood history, water table for cleaning supply, road access for 40-foot module trailers, and shadow mapping for transmission lines and tree belts. Heaven Designs’ ground-mount PV design service covers the layout and yield-simulation layer of this diligence if you want an independent design audit before committing to an EPC. A failed soil or water test discovered after land purchase is the single most expensive avoidable error in ground-mount solar.
📘 Regulation note
A 2 MW plant evacuates at 33 kV in most states, which means Chief Electrical Inspector to Government (CEIG) approval of drawings, a dedicated bay at the DISCOM substation, and a connectivity approval that runs 60-120 days in Gujarat and Rajasthan. Start the connectivity application the week land documents close, not after EPC signing.
Distance to the substation is the hidden land criterion. Every extra kilometre of 33 kV line costs ₹10-₹15 lakh in 2026 and adds line losses that erode 1-2% of generation. Practitioners on X repeatedly flag “cheap land 15 km from the substation” as a false economy: the evacuation line and losses can cost more than the land saved. Screen candidate plots for a 33/66 kV substation within 5 km, and confirm spare bay capacity with the DISCOM in writing before you pay a token advance.
Land tenure for a 25-year captive asset is usually outright purchase or a registered 25-30 year lease with escalation caps. Avoid short leases and revenue-sharing verbal arrangements; lenders at IREDA and PFC will not fund against them. If the land is agricultural, budget 3-6 months and ₹2-₹5 lakh for non-agricultural conversion in states that require it.
Generation and CUF: How Much Power Does a 2 MW Plant Produce?
A 2 MW solar plant generates 30-34 lakh kWh per year at the 17-19% Capacity Utilisation Factor (CUF) typical of peninsular India. CUF is the ratio of actual annual generation to the theoretical maximum if the plant ran at nameplate every hour of the year. At 18% CUF the math is: 2 MW x 8,760 hours x 0.18 = 31.5 lakh kWh. Site irradiance decides this number more than any equipment choice.
| Region | Typical CUF | 2 MW annual generation | Notes |
|---|---|---|---|
| Rajasthan (Jaisalmer, Bikaner) | 20-21% | 35-37 lakh kWh | Best in India; dust derating 5-7% |
| Gujarat (Kutch, Banaskantha, Surendranagar) | 19-20% | 33-35 lakh kWh | Excellent; cyclone wind loading required |
| Andhra Pradesh, Telangana, Karnataka | 18-19% | 32-33 lakh kWh | Solid; medium humidity |
| Tamil Nadu, Maharashtra, MP | 17-18% | 30-32 lakh kWh | India average band |
| West Bengal, Odisha, Bihar | 15-16% | 26-28 lakh kWh | Monsoon overcast 90+ days |
| Kerala, North-East states | 14-15% | 25-26 lakh kWh | Highest cloud cover; weak for captive |
The same kit generates 30-40% more in Rajasthan than in West Bengal, which is why captive and open-access capital clusters in the western belt. The Central Electricity Regulatory Commission (CERC) uses 19-21% CUF benchmarks for renewable tariff determination in high-irradiance states, and 17% as the national norm. Treat any EPC generation promise above 21% CUF for a fixed-tilt Indian site with suspicion.
Three operational derates separate brochure generation from metered generation. Soiling takes 3-7% in dry western belts without a disciplined cleaning cycle; a 2 MW plant needs 8-12 cleaning cycles a year. Inverter and grid downtime takes 1-2%. Module degradation compounds at 0.45-0.55% a year, so Year-10 generation is about 5% below Year-1. When you underwrite the project, discount the EPC’s P50 (median) yield estimate by 8-10% to get a P90 figure that lenders will accept, and hold the EPC to a performance guarantee against that P90.
Revenue Routes: Captive, Open Access, PPA, and Group Captive
Once site and kit are fixed, revenue is decided by the sales or savings route you sign. For a 2 MW asset there are four realistic routes, and the effective realisation varies almost 2x across them after charges.
| Sales route | Effective tariff (₹/kWh) | Charges and risk | Best for |
|---|---|---|---|
| Behind-the-meter captive | Retail offset ₹7-₹10 | None beyond O&M; load must absorb generation | Factory with adjacent land |
| Group captive (≥26% buyer equity) | ₹4.00-₹4.50 effective | Exempt from cross-subsidy surcharge; transmission + wheeling apply | Multiple industrial consumers pooling |
| Third-party open access | ₹5.00-₹6.00 gross | CSS + additional surcharge + wheeling + banking erode 15-30% | Industrial buyer, low-charge state |
| Corporate PPA (developer-owned) | ₹4.50-₹5.00 | Developer credit and lock-in risk | Zero-CAPEX buyer |
Open access is the mechanism that lets your 2 MW plant sell power across the DISCOM network to your own factory or a third party, but it layers in cross-subsidy surcharge (CSS), additional surcharge, wheeling, and banking charges set by each State Electricity Regulatory Commission. In states where CSS plus additional surcharge together exceed ₹1 per unit, the gross tariff advantage can evaporate. The group captive route, where consumers hold at least 26% equity in the project Special Purpose Vehicle (SPV) and consume at least 51% of generation, is exempt from CSS and additional surcharge under the Electricity Rules, which is why it dominates new 2 MW structures. The structuring detail is in our group captive solar guide, and the buyer-side comparison of developer models is in how solar PPAs and RESCOs work in India.
Verdict. For a single factory with 8-10 acres within 10 km of the plant, behind-the-meter or wheeling captive at ₹7-₹9 effective offset is the highest-value route and the one lenders underwrite fastest. Group captive is the right structure when 2-4 industrial consumers pool demand or when the factory lacks land. Third-party open access only beats group captive in states with CSS waivers for renewables. Never sign a route before modelling your state’s current surcharge order.
One myth worth correcting from the X research: developer decks quoting 70-90% IRR on captive solar are almost always showing thin-equity group captive arithmetic, 26% equity, heavy debt, and full CSS exemption assumed forever, not the IRR on ₹7.5 crore of owned CAPEX. The honest full-ownership number is 16-22% equity IRR with AD. A 2-year payback claim on a 2 MW plant is a red flag, not a pitch strength.
The 2 MW Captive Five-Filter Model
Every bankable 2 MW decision at our commercial desk passes through The 2 MW Captive Five-Filter Model, the framework we apply before we quote, and the one you can apply to any proposal in front of you. A project that fails even one filter gets restructured or dropped.
- Load filter. Your factory’s annual consumption must be at least 2.5x the plant’s expected generation, so 75 lakh kWh or more for a 2 MW plant. Below that ratio, banking losses and seasonal surplus erode the saving.
- Land filter. You control 8-10 acres within 10 km of both the factory and a 33/66 kV substation with confirmed spare bay capacity. Fail this and you are in group captive or open-access territory instead.
- Charges filter. Your state’s open-access surcharges (CSS + additional surcharge + wheeling + banking) must be under ₹1.50 per unit, or you must structure as group captive to claim the exemption. Check the current SERC order, not last year’s deck.
- Tax filter. You have sufficient taxable profit to absorb the Year-1 Accelerated Depreciation shield of ₹2.6-₹3.0 crore. Without it, the same project returns 3-4 percentage points less IRR.
- Tenure filter. Your load is stable for 10+ years. Captive status under Rule 3 of the Electricity Rules requires 51% self-consumption every year; a plant closure or major load shift converts cheap captive power into surcharge-liable power retroactively.
Apply the filters in order. Load decides whether 2 MW is the right size at all; land decides the physical structure; charges decide the legal structure; tax decides who should own the asset; tenure decides whether you sign at all. Most failed 2 MW projects we have audited failed filter 3 or filter 5, and both were knowable on day one.
Run your numbers before you commit. Our engineers model all five filters for your load profile, land parcel, and state surcharge order, and return a custom 2 MW proposal in 48 hours, no cost, no obligation. Get your free 2 MW assessment →
Financing, Accelerated Depreciation, and Payback Math
A ₹7.4 crore 2 MW project is typically financed 70:30 or 75:25 debt to equity: ₹5.2-₹5.6 crore of debt and ₹1.8-₹2.2 crore of equity. Four lender categories quote on this size, and 2 MW is large enough to interest all of them, unlike sub-1 MW deals.
| Lender | Loan-to-cost | Interest rate (2026) | Tenure | Notes |
|---|---|---|---|---|
| IREDA | 70-75% | 9.50-11.00% | 10-13 yrs | Specialist; fastest for clean captive projects |
| PFC | 70% | 9.75-11.25% | 10-13 yrs | Prefers 5+ MW; takes strong 2 MW credits |
| REC Limited | 70% | 9.75-11.25% | 10-13 yrs | Similar profile to PFC |
| Commercial banks (SBI, BoB, Axis) | 65-70% | 10.25-11.50% | 8-10 yrs | Faster for promoter-backed industrial borrowers |
IREDA remains the first port of call. Sanction in 60-90 days is realistic with executed land documents, a connectivity approval, and audited financials showing debt service coverage above 1.3x. Every 50 basis point cut in debt cost lifts equity IRR by roughly 0.6-0.8 percentage points, so treat lender terms as an IRR input, not an afterthought.
The tax lever is Accelerated Depreciation. The Income Tax Act allows 40% depreciation in Year 1 on the Written Down Value basis, plus 20% additional depreciation under Section 32(1)(iia) for plant commissioned in the first half of the financial year. Against a ₹7.4 crore asset, a company in the 30%+ tax bracket books a Year-1 tax shield of roughly ₹2.6-₹3.0 crore. That single line moves payback from 6-8 years to 3.5-5.5 years. The mechanics and timing rules, including why a March-to-April commissioning slip costs a full year of shield, are in our accelerated depreciation solar tax guide.
| Scenario (Gujarat, 33 lakh kWh/yr, ₹8/kWh offset, 2% tariff escalation) | Debt:Equity | AD claimed | Equity IRR | Payback |
|---|---|---|---|---|
| Captive self-fund, full AD | 0:100 | Yes | 17.5% | 4.2 yrs |
| Captive with IREDA debt, full AD | 70:30 | Yes | 21.5% | 3.6 yrs |
| Captive self-fund, no AD | 0:100 | No | 13.5% | 6.5 yrs |
| Group captive SPV (26% equity) | 74:26 | In SPV | 19-24% on thin equity | 4-5 yrs |
For the underlying return maths, including how to build the discounted cashflow yourself, see how to calculate solar ROI. The structural choice between owning the asset and buying the power is covered in OPEX vs CAPEX solar in 2026.
Common 2 MW Investor Mistakes
Across the 2 MW projects we have built, financed, or audited, losses cluster in six repeat patterns. None is a technology failure; all are underwriting errors that surface in Year 2 or 3.
-
1
Modelling generation at brochure CUF. Quotes that promise 36 lakh units for a site that will meter 31-32 lakh after soiling, downtime, and degradation inflate Year-1 savings by ₹30-₹40 lakh. Underwrite on P90, hold the EPC to a performance guarantee.
-
2
Ignoring captive Rule 3 compliance. If self-consumption drops below 51% of generation in any year, the plant loses captive status and cross-subsidy surcharge lands retroactively. Investors on X report multi-crore hits from exactly this. Model a stress case where your load falls 20%.
-
3
Treating banking and scheduling as free. Banked units lapse on 15-minute settlement blocks, and some state frameworks forfeit unutilised banked energy at year-end. A factory that cannot absorb daytime generation in real time can lose a double-digit share of output before CSS even enters the math.
-
4
Assuming free evacuation forever. Gujarat industrial consumers have reported DISCOM backdown instructions during low-demand periods. A 15-20% curtailment haircut in the base case is honest underwriting for open-access sites in saturated grids.
-
5
Buying the cheapest EPC quote. A ₹32/W quote that sub-specs galvanisation, cable cross-section, or transformer rating shows up as 3-5% generation loss over 25 years, worth far more than the ₹80 lakh saved on day one.
-
6
Skipping O&M as a line item. A ₹1.2-₹1.4 lakh per month O&M contract escalating at 5% is roughly ₹6.5 crore of nominal 25-year cost. Tight AMCs with cleaning cycles, inverter spares, and uptime guarantees are non-negotiable.
⚠️ Watch out
Open-access charges are revised by state regulators every 1-2 years. Model CSS, additional surcharge, wheeling, and banking on a ratchet basis with 4-6% annual escalation, never as flat assumptions from the year you sign.
2 MW vs 1 MW vs 5 MW: Which Scale Fits Your Load?
Capacity choice should follow the load filter, not the available land or the EPC’s preferred package size. Here is how the three standard industrial sizes compare on 2026 numbers.
| Parameter | 1 MW | 2 MW | 5 MW |
|---|---|---|---|
| All-in EPC cost | ₹3.5-₹4.0 cr | ₹7.0-₹7.6 cr | ₹17-₹19 cr |
| Cost per Watt | ₹35-₹40 | ₹35-₹38 | ₹34-₹38 |
| Land (ground-mount) | 4-5 acres | 8-10 acres | 20-25 acres |
| Annual generation (avg India) | 15-17 lakh kWh | 30-34 lakh kWh | 75-85 lakh kWh |
| Minimum factory load (2.5x rule) | ~38 lakh kWh/yr | ~75 lakh kWh/yr | ~1.9 cr kWh/yr |
| Typical equity (70% debt) | ₹1.0-₹1.2 cr | ₹1.8-₹2.2 cr | ₹4.3-₹5.7 cr |
| Equity IRR with AD | 15-22% | 16-22% | 17-23% |
| Lender interest | IREDA, banks | IREDA, PFC, REC, banks | All + consortium options |
The per-Watt cost curve flattens quickly above 2 MW, which means scale beyond your load buys almost nothing on CAPEX while adding land aggregation, substation, and off-take complexity. The right size is the largest capacity your own consumption can absorb at 2.5x coverage. For a live industrial-cluster example at the 1-2 MW band, see how we approached solar for the Morbi ceramic cluster.
- ✓ Full AD shield of ₹2.6-₹3.0 cr in Year 1
- ✓ 16-22% equity IRR, 3.5-5.5 yr payback
- ✓ ₹2.4+ cr annual bill offset at ₹8/kWh retail
- ✓ Tradeable, refinanceable asset by Year 5
- ✗ ₹1.8-₹2.2 cr equity locked in
- ✗ Rule 3 compliance risk if load drops
- ✗ 8-10 acres plus substation proximity required
- ✗ State surcharge and curtailment risk on wheeling routes
The exception worth admitting: if your load is seasonal or your facility may relocate within a decade, the long lock-in of an owned 2 MW asset works against you, and a shorter third-party PPA or rooftop-plus-open-access blend fits better. Solar is a 25-year decision dressed as a finance decision; match the asset to the business plan, not the other way round.
How Heaven Green Energy Helps
Heaven Green Energy delivers turnkey 2 MW captive and open-access projects across Gujarat, Rajasthan, Maharashtra, and Karnataka: Five-Filter feasibility modelling, ALMM-listed tier-1 supply, IREDA and PFC debt syndication support, CEIG and connectivity liaison, and 25-year O&M with performance guarantees. Every 2 MW proposal we issue carries a P90 yield commitment, not a brochure CUF.
- Site and substation screening with soil, shadow, and evacuation-cost diligence before you buy land.
- EPC delivery at ₹36-₹38/W with full transformer, switchgear, and 33 kV scope.
- Group captive SPV structuring with co-investor matching and Rule 3 compliance tracking.
- Lender introductions across IREDA, PFC, REC, and commercial banks.
- AD tax structuring coordinated with your CA and tax adviser.
- 25-year AMC with module cleaning cycles, inverter spares, and uptime guarantees.
Explore the services that match your 2 MW plan:
- Industrial Solar: captive, open access, and group captive EPC for 1 MW+ industrial loads.
- Commercial Solar: 100 kW to 5 MW rooftop and behind-the-meter projects.
- Ground-Mount Solar Park: 1-50 MW IPP-grade ground-mount EPC and operations.
- Solar EPC Services: turnkey engineering, procurement, and construction for any 2 MW configuration.
If you are earlier in the decision and want a quick savings estimate for your load, try our solar calculator, then come back with the numbers.
Frequently Asked Questions
What is the total cost of a 2 MW solar plant in India in 2026?
A 2 MW ground-mount solar plant in India in 2026 costs ₹7-₹7.6 crore on a turnkey EPC basis, equivalent to ₹35-₹38 per Watt. Modules account for about 50% (₹3.5-₹3.8 crore), inverters 11%, balance of system and civil works 26%, and EPC margin 13%. Land (₹40 lakh-₹1.5 crore for 8-10 acres) and grid evacuation (₹30-₹50 lakh for a 3 km, 33 kV line) usually sit outside the EPC quote, so the realistic cheque-written total is ₹7.5-₹9 crore.
How much land is required for a 2 MW solar power plant?
A 2 MW ground-mount solar plant needs 8-10 acres, roughly 32,000-40,000 square metres, of flat, unshaded land. The thumb rule is 4-5 acres per MW. TOPCon modules on fixed tilt pack into about 8 acres; single-axis trackers push the requirement up 10-15%. Beyond acreage, the site needs a 33/66 kV substation within about 5 km, confirmed spare bay capacity, road access for module trailers, and a water source for cleaning cycles.
How much electricity does a 2 MW solar plant generate per year?
A 2 MW solar plant generates 30-34 lakh kWh per year at the 17-19% Capacity Utilisation Factor typical across peninsular India. Rajasthan and Gujarat sites reach 33-37 lakh kWh at 19-21% CUF. Eastern and north-eastern states fall to 25-28 lakh kWh. Daily generation averages 8,000-9,500 units. Always underwrite on a P90 estimate, which discounts the EPC’s median yield forecast by 8-10% for soiling, downtime, and degradation.
What is the payback period and IRR of a 2 MW solar plant?
Payback runs 3.5-5.5 years with Accelerated Depreciation claimed in Year 1, and 6-8 years without it. Equity IRR sits at 16-22% for a captive CAPEX investor with 70% IREDA debt and full AD, versus 12-15% without AD. The Year-1 AD shield alone is worth ₹2.6-₹3.0 crore against a ₹7.4 crore asset for a company in the 30%+ tax bracket. Claims of 2-year payback or 70-90% IRR reflect thin-equity group captive arithmetic, not full ownership.
Is a captive 2 MW solar plant eligible for any government subsidy?
No direct capital subsidy applies to a 2 MW industrial plant; PM Suryaghar is capped at residential and small common-area systems. The incentives for this scale are Accelerated Depreciation (40% Year 1 plus 20% additional under Section 32), concessional IREDA debt at 9.5-11%, and state-level open-access concessions such as cross-subsidy surcharge waivers for captive and group captive renewable projects under the Electricity Rules. Several states also offer banking and wheeling concessions under their solar policies.
What is the difference between captive and group captive for a 2 MW plant?
In a captive structure, one consumer owns the plant and self-consumes the output. In group captive, multiple consumers together hold at least 26% equity in the project SPV and collectively consume at least 51% of generation each year. Both structures are exempt from cross-subsidy surcharge and additional surcharge under the Electricity Rules, which is worth ₹0.75-₹1.50 per kWh in most industrial states. Group captive suits factories without land or with loads too small to absorb 2 MW alone.
What are open-access charges on a 2 MW solar plant and who pays them?
Open-access charges are the grid-usage fees levied when solar power travels over the DISCOM network to your factory. They include cross-subsidy surcharge, additional surcharge, wheeling or transmission charges, and banking charges, set by each State Electricity Regulatory Commission and revised every 1-2 years. Together they erode 15-30% of the gross tariff on third-party open access. Captive and group captive structures are exempt from cross-subsidy and additional surcharge, which is the main reason they dominate new 2 MW projects.
How is a 2 MW solar plant financed in India?
The standard structure is 70:30 or 75:25 debt to equity. IREDA funds 70-75% of project cost at 9.5-11% for 10-13 years with a principal moratorium; PFC and REC quote similar terms for strong credits; commercial banks come in at 65-70% loan-to-cost and 50-100 basis points higher. On a ₹7.4 crore project, that means ₹5.2-₹5.6 crore of debt and ₹1.8-₹2.2 crore of equity. Lenders require executed land documents, connectivity approval, and debt service coverage above 1.3x.
