1 MW Solar Power Plant in India in 2025: Cost, Specifications, and Profit Explained

Every single year, the sun drops 7,500 times more energy on Earth than what humanity actually uses. While we complain about hefty electricity bills and cry over climate change, most of that energy goes untapped. That’s where the 1 MW solar power plant steps in. 

A 1 MW solar power plant is huge – it equals 1,000 kW. And installing 1,000 kW is a significant commitment. For perspective, here’s a simple calculation:

• A 1 KW solar system requires 100 square feet of shadow-free area.
• So, a 1 MW solar power plant area requirement will be at least 1,00,000 square feet. 

However, unlike the common belief that a 1 MW solar power plant has to be Ground Mounted, if your rooftop has enough space, it can be easily installed on rooftops. 

If you are thinking of setting up a 1 MW solar power plant and are keen on learning the cost of setting up a 1 MW solar power plant in India, its specifications, and subsidy details, we have all the answers you need! Dive in!

1 MW Solar Power Plant Overview

A 1 MW solar power plant floods entire facilities with electricity – Hospitals. Factories. Warehouses. Educational institutions. You name it, and the 1 MW solar power plant can power it. 

Here’s why a 1 MW solar power plant is so distinctive: 

• Primarily Government-Backed for Large-Scale Use: These are usually installed by the government for commercial-scale consumers. 
• Industrial Installations Can Send Surplus Power to the discom: If installed by an industry, the produced solar power can be sold to the government at rates determined by the Central Electricity Regulatory Commission (CERC). 

How Does a 1 MW Solar Power Plant Work?

A 1 MW solar power plant works the same way as solar systems of any other capacity would:

• The solar modules trap the sunlight: Panels use sunlight to produce an electric charge in the form of DC (direct current) power
• DC to AC Conversion: The DC power is then transferred to the solar inverter, which converts it to AC (alternating current)

1 MW Solar Power Plant Specifications

Here are the key specifications of a 1 MW solar power plant:

*Please note: A 1 KW solar system produces 1,350 to 1,450 units of electricity annually. 

1 MW Solar Power Plant Investment Models

A 1 MW solar power plant for commercial use can be designed and customized according to the requirements. Notably, there are two models. Let us explore them both.

• CAPEX Model 

In the CAPEX model, you must bear all the capital expenditure. You will own this solar plant. Which means you’ll generate your own electricity to fulfill the utility requirements. This model is most suitable when planning to install a solar system with a capacity of 100 kW or less.

• OPEX Model

In the OPEX model, you will only bear operation expenditure. Why? Because you do not own the plant in this model, the vendor does. 

You purchase solar electricity from the vendor. This remains very economical because the prices of solar power are relatively low compared to the prices of electricity from the grid. You can also buy this plant from the vendor later on.

• Leasing Model

This is the most preferred type of financing model. You don’t buy the solar power plant outright. A leasing company buys and owns the plant. You pay a fixed rent monthly or quarterly to use the electricity generated by the plant for a set number of years. At the end, you can usually:

• Buy the plant at fair market value
• Extend the lease at a lower rent
• Return it

1 MW Solar Power Plant Cost and Profit

Multiple factors affect the final estimated 1 MW solar power plant cost in India. Before we take you through the component-wise cost breakdown, let’s help you understand those factors:

• Type of solar panels selected – monocrystalline or Top-con panels 
• Manufacturing technology and efficiency of the solar inverter selected
• Solar panel brand opted
• Type of solar power plant – on-grid, off-grid, or hybrid 

1 MW Solar Power Plant Cost in India: Component Cost Breakdown

The project cost for a 1 MW solar power plant in India isn’t fixed. For clarity, here are the cost details for a 1 MW solar power plant in India:

• Solar panels + solar inverter cost: These components constitute 50-60% of the total project cost.
• Estimated total 1 MW solar power plant cost in India: ~ Rs. 3-4 crore 

*Please note: The above-mentioned project cost for 1 MW solar power plant in India is not fixed. The final cost of setting up a 1 MW solar power plant in India can vary based on many factors, including (but not limited to) the type and efficiency of solar panels and inverter you choose, product variant opted for, mounting structure height, type of solar system, your city, type of after-sales service, savings guarantee, etc. Prices are subject to change.

1 MW Solar Power Plant Subsidy

The most common subsidy scheme that the government provides for installing solar is the PM Surya Ghar Muft Bijli Yojana. However, this scheme is only for homeowners and housing societies. 

For a commercial solar plant of 1 MW capacity, only individual farmers (or groups like FPOs, cooperatives, and panchayats) are eligible for direct financial subsidy (CFA) of the PM KUSUM Yojana under:

• Component B: Standalone solar pumps (off-grid)
• Component C (IPS): Solarization of grid-connected pumps

Companies or industries cannot avail a direct subsidy benefit under PM KUSUM Yojana or PM Surya Ghar Muft Bijli Yojana. However, they can sell the electricity to the government and earn a profit. Wondering how much that profit would be? Let’s take you through the 1 MW solar power plant profit and income details!

Income From 1 MW Solar Power Plant 

If someone is investing ~ Rs. 3-4 crore in installing a 1 MW solar power plant, it’s only natural they’ll worry about whether or not the income from 1 MW solar power plant will break even the investment cost soon. 

To help ease your mind, we have an estimate of the 1 MW solar power plant profit you can expect. 

These are certain factors we considered while making the calculation tabulated below:

• The yearly power generation from 1 KW solar is 1,350-1,450 units
• The CERC-approved rates in Maharashtra are Rs. 2.82 per unit

*Please note: The income and profit from a 1 MW solar power plant varies based on the CERC-approved charges in your city/state, types of solar panels you’ve installed and their efficiency, intensity of sunlight your plant receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the panels, impact of dirt/dust, and how well you maintain your panels after installation. 

Types of a 1 MW Solar Power Plant

There are 3 major types of 1 MW solar power plants you can choose from. 

#1. Off-Grid Solar Power Plant

An off-grid solar power plant is a battery-based solar power generation setup. The various components of this type of solar system are: 

• Solar panels (modules)
• Mounting structures
• Batteries
• Solar charge controller
• Solar inverter
• Solar accessories

It’s an independent energy generation unit, as it’s not connected to the grid.  

#2. On-Grid Solar Power Plant

An on-grid solar power plant is also called a grid-connected or grid-tied system. The electricity produced by the panels in an on-grid setup is converted into AC power that is used to run appliances. 

• Whenever there are extra units generated (more than what can be consumed), a bidirectional meter transfers those units to the grid. 
• During the night, units are imported from the grid to keep the load running. This unit exchange is recorded by the bidirectional meter, which is later used to generate the solar bill. 

On-grid solar power plants are ideal for residential installations as well as commercial and industrial sectors.

#3. Hybrid Solar Power Plant

A hybrid solar power plant has the features of both on-grid and off-grid systems: it’s connected to the grid as well as to the batteries.

• Whenever there’s a grid failure, the hybrid system uses the power from the batteries to keep the load running. That’s one advantage over the on-grid system.
• The cost of batteries makes hybrid solar plants expensive. 

Conclusion

A 1 MW solar power plant that requires approximately 1,00,000 square feet (2.3 acres) area for installation and an investment of  ~ Rs. 3-4 crore crore is a worthy investment because:

• The cost breaks even in 1.5 to 2 years in Maharashtra at an XIRR (extended internal return rate) of 64%. The plant’s life is 25 years.
• The income from 1 MW solar power plant in the 1st year itself can touch almost ~ Rs. 40,89,000* in Maharashtra. 
• Offsets 1,176,000 kgs of carbon in one year, safeguarding the environment.

*Please note: The income from a 1 MW solar power plant varies based on the CERC-approved charges in your city/state, types of solar panels you’ve installed and their efficiency, intensity of sunlight your plant receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the panels, impact of dirt/dust, and how well you maintain your panels after installation.

If you’re looking to install industrial solar panels, submit a free solar project enquiry with SolarSquare today.

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FAQs

Q1. How much electricity does a 1 MW solar plant produce?

Ans. A 1 kW solar power plant produces 1,350 to 1,450 units of electricity annually. Therefore, a 1 MW solar power plant (1,000 kW) will produce 13,50,000 to 14,50,000 units of electricity annually.

Q2. What is the cost of building a MW solar power plant?

Ans. The project cost for 1 MW solar power plant in India ~ Rs. 3-4 crore, with solar panels and solar inverter, together, being the most expensive components. *Please note: The above-mentioned project cost for 1 MW solar power plant in India is not fixed. The final cost of setting up a 1 MW solar power plant in India can vary based on many factors, including (but not limited to) the type and efficiency of solar panels and inverter you choose, product variant opted for, mounting structure height, type of solar system, your city, type of after-sales service, savings guarantee, etc. Prices are subject to change.

Q3. How many solar panels are in 1 MW?

Ans. Here’s the simple formula you can use to calculate the number of solar panels needed: Power plant capacity in watts divided by module capacity in watts Now suppose, you use 580-watt Topcon solar panels to build your 1 MW power plant (10,00,000 watts); then, you’ll need the following number of panels: 10,00,000 / 580 = 1,724.137 = 1,725 solar panels

Q4. How much subsidy is given on 1 MW solar power plant?

Ans. Only individual farmers (or groups like FPOs, cooperatives, panchayats) are eligible for direct financial subsidy (CFA) of the PM KUSUM Yojana under: Component B: Standalone solar pumps (off-grid) Component C (IPS): Solarization of grid-connected pumps If you are a company or an industry, you cannot avail a direct subsidy benefit under PM KUSUM Yojana or PM Surya Ghar Muft Bijli Yojana.