A 5 MW (megawatt) solar plant is where industrial solar stops being a factory accessory and becomes an infrastructure asset. At this size you are building a small power station: 20-25 acres of land, a dedicated 33 kV or 66 kV evacuation line, a DISCOM substation bay, and Chief Electrical Inspector to Government (CEIG) approvals that run on utility timelines. In 2026, a turnkey 5 MW ground-mount project in India costs ₹17-₹19 crore on an Engineering, Procurement, and Construction (EPC) basis, generates 75-85 lakh units (kWh) a year in peninsular India, and clears an Internal Rate of Return (IRR) of 17-23% for a CAPEX investor who claims Accelerated Depreciation (AD).
This guide is written for industrial investors, Independent Power Producer (IPP) developers, and corporate treasury teams evaluating a 5 MW captive, group captive, or open-access project. It prices the full stack: land, EPC cost per MW, generation math, revenue routes, debt structure, payback, and the approvals that decide whether the plant commissions in 9 months or 18. If 5 MW is larger than your load, scale the same model down with our 2 MW solar plant cost and ROI guide or the 1 MW solar plant cost and ROI guide.
Direct answer. A 5 MW solar plant in India in 2026 costs ₹17-₹19 crore turnkey (₹34-₹38 per Watt), needs 20-25 acres of land, and generates 75-85 lakh kWh a year at 17-19% Capacity Utilisation Factor (CUF). A CAPEX investor claiming Accelerated Depreciation earns 17-23% equity IRR with 3.5-5.5 year payback; without AD, IRR falls to 12-16%. IREDA, PFC, and REC debt covers 70-75% of cost at 9.5-11% for 10-13 years.
The rest of this guide tests every one of those numbers against 2026 market benchmarks, state by state and structure by structure, so you can benchmark any developer pitch or EPC quote you receive.
Why 5 MW Is the Entry Point to Utility-Scale Solar in 2026
Five MW is the smallest capacity at which the full utility-scale playbook applies. Below 2 MW, a factory can still treat solar as a behind-the-meter cost-saving device on nearby land. At 5 MW, you cross three thresholds at once: evacuation shifts from a shared 11 kV or 33 kV line to a dedicated feeder with its own substation bay, the project becomes large enough to interest every infrastructure lender in the country, and the buyer base widens from a single factory to multi-consumer group captive pools and third-party open access sale.
The demand side is pulling hard. India’s commercial and industrial (C&I) segment has been the fastest-growing slice of new solar capacity, with retail industrial tariffs of ₹7-₹12 per kWh against solar landed costs of ₹3.00-₹4.50 per kWh, per Mercom India C&I market reporting through 2025. A 5 MW plant producing 80 lakh units a year against a ₹7.50 effective industrial tariff represents a ₹6 crore annual value pool. That is why textile parks in Surat, ceramic units in Morbi, and pharmaceutical plants in Ahmedabad are all looking at this size in 2026.
Three forces shape 2026 economics at this scale. Module prices have stabilised near US$0.10-0.12 per Watt at the factory gate, per BloombergNEF module index data, keeping equipment costs predictable. 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, with the List-II cell mandate for open-access projects deferred to December 2026, a window developers on X are racing to commission inside. And debt markets treat 5 MW as the first “real” project-finance ticket: the Indian Renewable Energy Development Agency (IREDA), Power Finance Corporation (PFC), and REC all compete at this size, which compresses interest spreads in your favour.
5 MW Solar Plant Cost in India 2026: Full CAPEX Breakdown
The all-in 5 MW turnkey quote of ₹17-₹19 crore assumes a Direct Current (DC) capacity of 5.75 MWp, the standard 1.15x DC-over-AC ratio, fixed-tilt mounting, string or central inverters, and a 33 kV evacuation point within 3-5 km. Per-MW EPC cost runs ₹3.4-₹3.8 crore, the cheapest band of any sub-10 MW size because civil works, engineering, and evacuation overheads spread over five times the capacity of a 1 MW project.
| Bucket | Share | Cost for 5 MW (₹) | Notes |
|---|---|---|---|
| Modules (ALMM tier-1) | ~50% | ₹8.5-₹9.5 cr | 580-620 Wp TOPCon or mono PERC |
| Inverters | ~10% | ₹1.7-₹2.0 cr | 3-4 central units or 25-40 string units |
| Balance of System, civil, structure | ~27% | ₹4.6-₹5.1 cr | HT cabling, 2 x 2.5 MVA or 5 MVA transformer, switchgear, mounting, fencing |
| EPC margin + commissioning | ~13% | ₹2.2-₹2.4 cr | Design, PMC, testing, CEIG and connectivity liaison |
| Total | 100% | ₹17.0-₹19.0 cr | ₹34-₹38 per Watt |
Land and grid connection sit outside the EPC quote in most contracts. At ₹5-₹15 lakh per acre for rural industrial-belt land, 20-25 acres adds ₹1-₹3.75 crore depending on district and whether you buy or take a 25-30 year registered lease. Evacuation is the bigger off-quote item: a 3-5 km dedicated 33 kV line with bay extension runs ₹75 lakh-₹1.5 crore, and if the DISCOM substation is already loaded, a transformer augmentation at consumer cost adds another ₹40 lakh-₹1.2 crore. A realistic cheque-written total for a 5 MW plant is therefore ₹18.5-₹22 crore, not the headline EPC number. That gap is where most investor models break.
💡 Fast tip
A clean 5 MW ground-mount EPC quote in 2026 lands at ₹34-₹38/W including transformer and pool substation works. Below ₹30/W, expect sub-spec galvanisation or cable cross-sections. Above ₹42/W, the quote is loading margin or genuine site complexity. Anchor every negotiation on cost per Watt, then audit the evacuation scope separately.
Two specification choices move the CAPEX band materially. Central inverters are cheaper per kW at this size and simpler to maintain with a dedicated O&M team, but string inverters give finer Maximum Power Point Tracking (MPPT) granularity and cheaper replacement; QBits Energy’s guide on solar inverter sizing walks through the DC/AC ratio tradeoffs. Single-axis trackers add ₹25-₹35 lakh per MW while lifting generation 15-18%, which pays back at 5 MW only in high-irradiance states with cheap, flat land. For most captive and IPP buyers in Gujarat, Rajasthan, or Maharashtra, fixed tilt with TOPCon modules remains the value optimum in 2026.
Land, Evacuation, and CEIG Approvals at the 5 MW Scale
A 5 MW ground-mount plant needs 20-25 acres of flat, unshaded, contiguous land, roughly 80,000-1,00,000 square metres, consistent with the 4-5 acres per MW norm in MNRE park-planning guidance. Contiguity matters more at 5 MW than at 2 MW: fragmented parcels multiply internal cabling, security, and O&M cost. Single-axis trackers push the requirement up 10-15% because rows must be spaced wider to avoid self-shading.
Site diligence at this scale is closer to utility practice. Our engineering checklist covers soil bearing capacity for pile foundations across the full plot, flood history, water table for the 20-30 cleaning cycles a year a 5 MW plant needs, road access for 40-foot module trailers, and shadow mapping for transmission lines and tree belts. Heaven Designs’ ground-mount PV design service covers layout, yield simulation, and pile-foundation design if you want an independent engineering audit before committing to an EPC. A failed soil or water test discovered after land purchase remains the single most expensive avoidable error in ground-mount solar.
📘 Regulation note
A 5 MW plant evacuates at 33 kV or 66 kV, which triggers CEIG approval of drawings before commissioning, a dedicated bay at the DISCOM substation, and a connectivity approval that runs 90-150 days in Gujarat and Rajasthan. File the connectivity application the week land documents close. Every month of connectivity delay after mechanical completion costs ₹40-₹50 lakh in lost generation.
The approvals sequence at 5 MW, in the order our project teams run it:
- Land closure and title clearance with 25-30 year tenure security, plus non-agricultural conversion where the state requires it (3-6 months, ₹3-₹8 lakh).
- Connectivity application to the DISCOM or STU with single-line diagram, plot map, and proposed injection voltage; the utility runs a load-flow study and confirms bay availability.
- Bay and line execution, either by the DISCOM on deposit work or by your EPC under DISCOM supervision.
- CEIG drawing approval and pre-commissioning inspection of the transformer, switchgear, earthing, and protection relays. Heaven Designs’ CEIG electrical drawings service handles the drawing and liaison layer for projects that lack an in-house electrical team.
- Open-access or captive registration with the State Load Despatch Centre, followed by meter installation and trial run.
Distance to the substation is still the hidden land criterion. Every extra kilometre of 33 kV line costs ₹10-₹15 lakh and adds 1-2% line losses. Practitioners on X repeatedly flag “cheap land 15 km from the substation” as a false economy at exactly this scale. Screen candidate plots for a 33/66/132 kV substation within 5 km and get spare bay capacity confirmed by the DISCOM in writing before you pay a token advance.
Generation and CUF: How Much Power Does a 5 MW Plant Produce?
A 5 MW solar plant generates 75-85 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. At 18% CUF the math is: 5 MW x 8,760 hours x 0.18 = 78.8 lakh kWh. Site irradiance decides this number more than any equipment choice.
| Region | Typical CUF | 5 MW annual generation | Notes |
|---|---|---|---|
| Rajasthan (Jaisalmer, Bikaner) | 20-21% | 88-92 lakh kWh | Best in India; dust derating 5-7% |
| Gujarat (Kutch, Banaskantha, Surendranagar) | 19-20% | 83-88 lakh kWh | Excellent; cyclone wind loading required |
| Andhra Pradesh, Telangana, Karnataka | 18-19% | 79-83 lakh kWh | Solid; medium humidity |
| Tamil Nadu, Maharashtra, MP | 17-18% | 75-79 lakh kWh | India average band |
| West Bengal, Odisha, Bihar | 15-16% | 66-70 lakh kWh | Monsoon overcast 90+ days |
| Kerala, North-East states | 14-15% | 61-66 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, group captive, and IPP 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 at 5 MW. Soiling takes 3-7% in dry western belts without disciplined cleaning; a 5 MW plant needs 20-30 cleaning cycles a year and a dedicated water source. Inverter and grid downtime takes 1-2%. Module degradation compounds at 0.45-0.55% a year, so Year-10 generation runs 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 lenders will accept, and hold the EPC to a performance guarantee against that P90. At 5 MW, a single percentage point of CUF is worth roughly ₹6-₹7 lakh of annual revenue, so this is not academic.
Revenue Routes: IPP Sale, Captive, Open Access, and Group Captive
At 5 MW you have four realistic revenue routes, and effective realisation varies almost 2x across them after charges. The route decision belongs in the board paper alongside CAPEX, not after it.
| Sales route | Effective tariff (₹/kWh) | Charges and risk | Best for |
|---|---|---|---|
| Captive (single consumer) | Retail offset ₹7-₹10 | None beyond O&M; load must absorb generation | Large factory or plant cluster |
| Group captive (≥26% buyer equity) | ₹4.00-₹4.50 effective | Exempt from cross-subsidy surcharge; transmission + wheeling apply | 2-5 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 |
| Utility or corporate PPA (IPP sale) | ₹3.00-₹3.50 (utility), ₹4.50-₹5.00 (corporate) | Off-taker credit and lock-in risk | Investor/developer with land |
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 each year, is exempt from cross-subsidy surcharge (CSS) and additional surcharge under the Electricity Rules. In states where CSS plus additional surcharge together exceed ₹1 per unit, that exemption is worth ₹0.75-₹1.50 per kWh, which is why group captive dominates new 5 MW structures. Gujarat’s banking charge of around ₹1.50 per unit, flagged repeatedly in practitioner discussions on X, further tilts the math toward daytime self-consumption over banking. 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. A 5 MW plant fully absorbed by one industrial load at ₹7-₹9 effective offset is the highest-value route and the one lenders underwrite fastest. Group captive is the right structure when 2-5 consumers pool demand or when the anchor factory lacks land. Pure IPP sale to a utility at ₹3.00-₹3.50 only pencils out on very cheap land with long-tenure PPA in hand; it is a yield trade, not a savings play. Never sign a route before modelling your state’s current surcharge order.
One myth worth correcting from the X research: developer decks quoting 60-90% IRR on 5 MW captive solar are showing thin-equity group captive arithmetic, 26% equity, maximum debt, and a permanent CSS exemption assumed, not the IRR on ₹19 crore of owned CAPEX. The honest full-ownership number is 17-23% equity IRR with AD. A 2-year payback claim on a 5 MW plant is a red flag, not a pitch strength.
The 5 MW Six-Gate Bankability Model
Every 5 MW decision at our commercial desk passes through The 5 MW Six-Gate Bankability 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 gate gets restructured or dropped.
- Offtake gate. You have a signed or signable consumption commitment for at least 51% of generation for 10+ years: your own load, group captive partners, or a corporate Power Purchase Agreement (PPA). Without it, 5 MW is speculation.
- Land gate. You control 20-25 contiguous acres within 10 km of a 33/66 kV substation with written spare-bay confirmation, on tenure a lender will fund against.
- Evacuation gate. The DISCOM load-flow study confirms injection capacity, and the evacuation budget, including any substation augmentation, is inside your CAPEX model, not a surprise.
- Charges gate. Your state’s open-access surcharges (CSS + additional surcharge + wheeling + banking) are under ₹1.50 per unit, or you structure as group captive to claim the exemption. Check the current SERC order, not last year’s deck.
- Capital gate. You have ₹4.5-₹6.5 crore of equity plus debt service coverage above 1.3x, and enough taxable profit to absorb the Year-1 AD shield of ₹6.3-₹7.6 crore. Without the tax appetite, sell the AD benefit by structuring differently or expect 3-4 points less IRR.
- Tenure gate. The anchor load is stable for 10+ years. Captive status under Rule 3 of the Electricity Rules requires 51% self-consumption every year; a plant closure converts cheap captive power into surcharge-liable power retroactively.
Apply the gates in order. Offtake decides whether 5 MW is viable at all; land and evacuation decide the physical project; charges decide the legal structure; capital decides who owns the asset; tenure decides whether you sign. Most failed 5 MW projects we have audited failed gate 3 or gate 6, and both were knowable on day one.
Run your numbers before you commit. Our engineers model all six gates for your load profile, land parcel, and state surcharge order, and return a custom 5 MW proposal in 48 hours, no cost, no obligation. Get your free 5 MW assessment →
Financing, Debt Structure, and Payback Math
An ₹18 crore 5 MW project is typically financed 70:30 or 75:25 debt to equity: ₹12.6-₹13.5 crore of debt and ₹4.5-₹6.5 crore of equity. Five MW is the smallest size at which consortium lending and structured mezzanine appear, which gives you pricing tension between lenders.
| Lender | Loan-to-cost | Interest rate (2026) | Tenure | Notes |
|---|---|---|---|---|
| IREDA | 70-75% | 9.50-11.00% | 10-13 yrs | Specialist; fastest for clean captive and IPP projects |
| PFC | 70% | 9.75-11.25% | 10-13 yrs | Comfortable at 5 MW+; strong on group captive SPVs |
| 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, with sanction in 60-90 days realistic when land documents, connectivity approval, and audited financials showing debt service coverage above 1.3x are in hand. 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. For Gujarat-specific working-capital and term-loan structures around this debt, see our C&I solar financing guide for Gujarat.
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 an ₹18 crore asset, a company in the 30%+ tax bracket books a Year-1 tax shield of roughly ₹6.3-₹7.6 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, 83 lakh kWh/yr, ₹8/kWh offset, 2% tariff escalation) | Debt:Equity | AD claimed | Equity IRR | Payback |
|---|---|---|---|---|
| Captive self-fund, full AD | 0:100 | Yes | 18.5% | 4.0 yrs |
| Captive with IREDA debt, full AD | 70:30 | Yes | 22.5% | 3.5 yrs |
| Captive self-fund, no AD | 0:100 | No | 14.0% | 6.3 yrs |
| Group captive SPV (26% equity) | 74:26 | In SPV | 20-26% on thin equity | 4-5 yrs |
| IPP utility PPA at ₹3.25/kWh | 75:25 | Yes | 11-14% | 8-10 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 5 MW Investor Mistakes
Across the 5 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
Underwriting evacuation as an afterthought. The DISCOM load-flow study can mandate a substation augmentation of ₹40 lakh-₹1.2 crore at consumer cost. Investors who discover this after land purchase have already lost their contingency. Commission the study before financial close, not after.
-
2
Modelling generation at brochure CUF. Quotes that promise 90 lakh units for a site that will meter 78-80 lakh after soiling, downtime, and degradation inflate Year-1 savings by ₹80 lakh-₹1 crore. Underwrite on P90 and hold the EPC to a performance guarantee.
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3
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. Model a stress case where your anchor load falls 20% before you commit equity.
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4
Assuming free evacuation forever. Gujarat and Rajasthan industrial consumers report DISCOM backdown instructions during low-demand periods, the loudest practitioner complaint on X in 2026. A 10-15% curtailment haircut in the base case is honest underwriting for open-access sites in saturated grids.
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5
Buying the cheapest EPC quote. A ₹30/W quote that sub-specs galvanisation, cable cross-section, or transformer rating shows up as 3-5% generation loss over 25 years, worth several crore more than the ₹2 crore saved on day one.
-
6
Skipping O&M as a line item. A ₹4-₹5 lakh per month O&M contract escalating at 5% is roughly ₹25 crore of nominal 25-year cost. Tight AMCs with cleaning cycles, inverter spares, security, and uptime guarantees are non-negotiable at this scale.
⚠️ Watch out
Open-access charges and banking rules 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. The ALMM List-II cell mandate window closing in December 2026 can also move module pricing for projects commissioning in 2027.
5 MW vs 2 MW vs 10 MW: Which Scale Fits Your Plan?
Capacity choice should follow the offtake gate, not the available land or the developer’s preferred package size. Here is how the three utility-adjacent sizes compare on 2026 numbers.
| Parameter | 2 MW | 5 MW | 10 MW |
|---|---|---|---|
| All-in EPC cost | ₹7.0-₹7.6 cr | ₹17-₹19 cr | ₹33-₹37 cr |
| Cost per Watt | ₹35-₹38 | ₹34-₹38 | ₹33-₹37 |
| Land (ground-mount) | 8-10 acres | 20-25 acres | 40-50 acres |
| Annual generation (avg India) | 30-34 lakh kWh | 75-85 lakh kWh | 1.5-1.7 cr kWh |
| Cheque-written total (land + evacuation) | ₹7.5-₹9 cr | ₹18.5-₹22 cr | ₹36-₹42 cr |
| Typical equity (70% debt) | ₹1.8-₹2.2 cr | ₹4.5-₹6.5 cr | ₹9-₹12 cr |
| Equity IRR with AD | 16-22% | 17-23% | 17-24% |
| Evacuation | 33 kV shared/dedicated | 33/66 kV dedicated + bay | 66/132 kV, pooling station |
The per-Watt cost curve flattens between 5 MW and 10 MW, which means 5 MW captures nearly all the scale economy available before you enter full IPP territory with pooling substations and multi-buyer offtake. For most industrial investors, 5 MW is the ceiling of manageable complexity; for most single factories, the load decides a smaller size. For a live industrial-cluster example at the smaller band, see how we approached solar for the Morbi ceramic cluster.
- ✓ Full AD shield of ₹6.3-₹7.6 cr in Year 1
- ✓ 17-23% equity IRR, 3.5-5.5 yr payback
- ✓ ₹6+ cr annual value pool at ₹8/kWh offset
- ✓ Lowest ₹/W of any captive scale; consortium debt available
- ✗ ₹4.5-₹6.5 cr equity locked in
- ✗ Rule 3 compliance risk if anchor load drops
- ✗ 20-25 contiguous acres plus substation proximity required
- ✗ CEIG, connectivity, and curtailment exposure on wheeling routes
The exception worth admitting: if your anchor load is seasonal or your facility may relocate within a decade, the long lock-in of an owned 5 MW asset works against you, and a third-party PPA or a smaller captive 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 5 MW captive, group captive, and IPP projects across Gujarat, Rajasthan, Maharashtra, and Karnataka: Six-Gate feasibility modelling, ALMM-listed tier-1 supply, IREDA and PFC debt syndication support, connectivity and CEIG liaison, and 25-year O&M with performance guarantees. Every 5 MW proposal we issue carries a P90 yield commitment, not a brochure CUF.
- Site and substation screening with soil, shadow, load-flow, and evacuation-cost diligence before you buy land.
- EPC delivery at ₹34-₹38/W with full transformer, switchgear, pool substation, and 33/66 kV scope.
- Group captive SPV structuring with co-investor matching and Rule 3 compliance tracking.
- Lender introductions across IREDA, PFC, REC, and commercial banks, with consortium structuring where it lowers your rate.
- AD tax structuring coordinated with your CA and tax adviser.
- 25-year AMC with module cleaning cycles, inverter spares, security, and uptime guarantees.
Explore the services that match your 5 MW plan:
- Industrial Solar: captive, open access, and group captive EPC for 1 MW+ industrial loads.
- Ground-Mount Solar Park: 1-50 MW IPP-grade ground-mount EPC and operations.
- Solar EPC Services: turnkey engineering, procurement, and construction for any 5 MW configuration.
- Commercial Solar: 100 kW to 5 MW rooftop and behind-the-meter projects.
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 5 MW solar plant in India in 2026?
A 5 MW ground-mount solar plant in India in 2026 costs ₹17-₹19 crore on a turnkey EPC basis, equivalent to ₹34-₹38 per Watt. Modules account for about 50% (₹8.5-₹9.5 crore), inverters 10%, balance of system and civil works 27%, and EPC margin 13%. Land (₹1-₹3.75 crore for 20-25 acres) and grid evacuation (₹75 lakh-₹1.5 crore, plus any substation augmentation) usually sit outside the EPC quote, so the realistic cheque-written total is ₹18.5-₹22 crore.
How much land is required for a 5 MW solar power plant?
A 5 MW ground-mount solar plant needs 20-25 acres, roughly 80,000-1,00,000 square metres, of flat, unshaded, contiguous land. The thumb rule is 4-5 acres per MW. Single-axis trackers push the requirement up 10-15%. Beyond acreage, the site needs a 33/66 kV substation within about 5 km with written spare-bay confirmation, road access for module trailers, and a water source for 20-30 cleaning cycles a year.
How much electricity does a 5 MW solar plant generate per year?
A 5 MW solar plant generates 75-85 lakh kWh per year at the 17-19% Capacity Utilisation Factor typical across peninsular India. Rajasthan and Gujarat sites reach 83-92 lakh kWh at 19-21% CUF. Eastern and north-eastern states fall to 61-70 lakh kWh. Daily generation averages 20,000-24,000 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 5 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 17-23% for a captive CAPEX investor with 70% IREDA debt and full AD, versus 12-16% without AD. The Year-1 AD shield alone is worth ₹6.3-₹7.6 crore against an ₹18 crore asset for a company in the 30%+ tax bracket. Claims of 2-year payback or 60-90% IRR reflect thin-equity group captive arithmetic, not full ownership.
Is a 5 MW solar plant eligible for any government subsidy?
No direct capital subsidy applies to a 5 MW industrial or IPP plant; PM Suryaghar is capped at residential and small common-area systems. The incentives at this scale are Accelerated Depreciation (40% Year 1 plus 20% additional under Section 32), concessional IREDA, PFC, or REC 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 approvals does a 5 MW solar plant need in India?
A 5 MW plant needs land title and non-agricultural conversion where applicable, DISCOM or STU connectivity approval with a load-flow study, a dedicated substation bay and 33/66 kV line, CEIG approval of electrical drawings and a pre-commissioning inspection, and open-access or captive registration with the State Load Despatch Centre. The connectivity and CEIG chain runs 90-150 days in Gujarat and Rajasthan, so file the connectivity application the week land documents close.
What is the difference between captive, group captive, and IPP for a 5 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 are exempt from cross-subsidy and additional surcharge. In a pure IPP structure, a developer owns the plant and sells power to a utility or corporate under a PPA at ₹3.00-₹5.00 per kWh, with no surcharge exemption but also no self-consumption rule.
How is a 5 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; PFC and REC quote similar terms and are comfortable at 5 MW and above; commercial banks come in at 65-70% loan-to-cost and 50-100 basis points higher. On an ₹18 crore project, that means ₹12.6-₹13.5 crore of debt and ₹4.5-₹6.5 crore of equity. Lenders require executed land documents, connectivity approval, and debt service coverage above 1.3x.
