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Solar Power Plant Project – How to Build a Solar Plant in 10 Steps

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Solar Power Plants have mushroomed in different parts of the world as Global Solar Demand has increased by more than 150% in 2010.Solar Power Plants built on the Ground differ from that put on the Roofs of Houses as they require to go through feasibility,environmental assessment,grid connection,siting etc. which is typical for a large industrial project.The time taken to build a solar power plant project is also much more than a rooftop residential solar installation.Solar Farms are being mainly being built in countries which have subsidy program like tax rebates,feed in tariffs etc.However building a solar plant has become quite easy unlike in the past as solar panel,solar inverters and installation expertise is more easily available.The regulations and permits for building a solar plant or a solar farm on the other hand differ from country to country and region to region depending on federal and state laws.For a Large Solar Plant like the Aqua Caliente,there are a number of permitting steps that have to be passed before the plant can be built.For smaller power plants in the 5 MW range the requirements are less.In general the smaller the size of the solar installation,the lower the number of regulations required.Here are the steps required in building a Solar Power Plant

1) Site Identification – Identifying a Suitable Site for Building the Solar Plant.Note the Area should not be heavily forested and have easy access to the Roads and the Power Grid.

2) Preliminary Financial Analysis – Preliminary Financial Feasibility with inputs like the Land Costs,Solar Insolation,Interconnection possibility with the Power Grid Operator

3) Land Leasing or Buying – After Step 2 has passed,then begins the Acquisition of the Land through Lease or Ownership.

4) Basic Engineering Design/Technology Selection – An Engineering Layout is prepared along with the Selection of the Technology and Vendors of Solar Equipment

5)Permitting – Various Permitting Procedures need to be followed in this Step.This is specific to an Area and can be quite cumbersome.For eg. in the USA the permitting involves very heavy costs forming almost 15-20% of the cost of a Solar Project.

6) Power Purchase Agreement – A Power Purchase Agreement (PPA) needs to be signed with the Power Utility who will buy the Electricity

7) Selection of EPC – A System Integrator or a Solar EPC Contractor is selected.In case an EPC Contractor is selected then Solar Panels ,Mounting and Inverters needs to be purchased if the Contract is not a Turnkey One

8) Financing of the Solar Project needs to be done.Note Solar Power Plants require a high initial investment with very low O&M costs.In general 60-80% of the Project is Debt Financed.

9) Testing and Connection to Grid – After the Solar Plants is built,Testing of the Plant has to be done before it is connected to the Power Grid

10) Ongoing O&M – A Solar Plant has a life  of between 25-30 years and requires minimal maintenance and monitoring.Solar Inverters have to be replace after 10-15 years.In case a Solar Module fails,it needs to be replaced as well as it degrades the performance of other Solar Panels.

Note the Above Steps are a basic procedure for a Solar Power Project.It can be further be refined into more steps.


Note building a Solar Power Plant requires Project Management skills typical of an industrial project with some unique characteristics.The above steps are a simlistic procedure of a how to go about building a solar power plant.The process in fact requires more detail and solid execution skills.A Solar Plant can be built in 3 months to 2 years depending on the expertise and the permitting required.Note building a Solar Thermal Plant is much more time consuming typcially taking between 3-5 years.


Abhishek Shah

21 Responses so far | Have Your Say!

  1. Dr Rama Gopal Reddy

    sir i need to know more about solar power plant s establishment and indivizual roof top solar power inverters..thankq for the 10 most important basic steps you have mentioned sir

  2. Lucretia

    Solar panels are also becoming more affordable as they are becoming more efficient.
    Their prices have sky-rocketed, making cheap solar power a
    highly sought-after resource. Inverters typically run about 95%, charge controllers
    at 98%, and batteries at 80%. Caitlan Carroll: Albert
    Ortega stands in front of a class of about 20 men and women. We offer our customers with
    a professional service. No need to looking any further for a top quality Solar Panel Installer,
    has what you need.

  3. Ahmed

    thanks for this study, but what is the cost of creating small solar station for 1 MW ?


    Want to invest in solar plant .we have 20 hectare in that we want to start a solar plant so that kindly i need information in technical and finacialy


    We can give technology, establish Solar power Plants and arrange finance once you have your own land, PPA and your margin money for you and create value for your investments. Plant size should be 10 MW and above.You can contact us on –



  7. Himagiri

    I Want to start a solar power plant., As start up how can equipment can be purchased and how much cost it required…?? plz give me details on my mail id (

  8. bharat jain

    Hello sir, thanks for the valuable information. It would really be a great help if you could support us in starting up a power plant. It would be really nice of you, if you could provide us some more information with regards to the power plant. It would really be kind of you if you can provide us the details to contact you. Waiting for your reply sir, hope you do the needful

  9. prahallad

    how much cost for 1 MW solar plant ? what are the permissions required to set up and how easy it is ?

  10. drona

    how much cost for 1 MW solar plant ? what are the permissions required to set up and how easy it is ?

  11. B.S.Arun Kumar

    Mr Prahalad and Mr Drona . You both seems to have the same question.. My answer is as follows
    1) 1 MW would cost any where between 6-7 crores . Land cost extra.
    2) No projects are without any hurdles. One good thing is that your power generated is sold to the distribution company ( Discom). Being a Govt company you are assured of your returns depending upon the health of the Discom.There are lot many things to be done for getting approvals . The PPA is your ultimate document which ensures your ROI provided you generate as per agreement.

  12. Rajalingam

    thanks for this study, but what is the cost of creating small solar station for 1 MW ?

  13. Vinod Pandey

    I have my own land and I want to start a solar power plant of 1 MW. How much cost it required?

  14. Ajay Sukhramani

    Thnx For Total 10 Step for startup .
    But you didn’t indicate the project cast for creating A company excluding Land .
    Machinery cast, tools cast, installation charge , transportation & vehicle,, civil work , building cast,minimum how much land require ,how much k.v. electric city transformer require ,water supply, Man power etc.
    Ajay Sukhramani +91.9425330555

  15. laduram

    Dear Sir

    we have a land 10650 acres unique plot divided by two parts by national highway 15b near sathur road and nelmani road need buyers who can install solar power plant

  16. vishal

    Sir,thanks for Your information sir i am seeing to invest by 500kw watts plz send me cost details to mail id sir

  17. surendra

    i want start a 5MW solar power plant give the the requirements and how to contact the govt.

  18. srinibash parida

    sir i thanq fr above 10 points and i want to open a solar power plant so for that what should be my 1st step…

  19. Varun

    It’s good information to understand the solar business.
    Thanks for sharing !!