What are the opportunities for investors to develop a 1 MW Solar PV Project in the state of Madhya Pradesh?

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1 MW Solar project at Madhya Pradesh

  • The Madhya Pradesh Urja Vikas Nigam (MPUVN) Limited the nodal agency for implementation of the Madhya Pradesh Solar Power Policy – 2010.

State Policy

  • Minimum capacity of a grid connected Solar Power Generator (SPG) should be 1 MW each.
  • This project will come under the state policy of Small Solar Power Plants of capacity up to 2MW connected to distribution network (below 33 kV)

REC scheme

  • REC Scheme is applicable as per Policy of CERC Orders. One REC will be available for 1 MWh sale of electricity to the grid. The sale of the power to the State will be at APPC.
  • Subject to the terms and conditions contained in MPERC Regulations, the Commission recognizes the Certificates issued under the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issue of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010


  • The purchase rate of electricity generated by solar power generators will be at the tariff declared by the Madhya Pradesh Electricity Regulatory Commission (MPERC).
  • The energy from all the Renewable Sources of Energy will be procured centrally by the M.P. Power Trading Co. Ltd. on behalf of the Distribution Licensees, at the tariff determined by the Commission
  • The Power Purchase Agreement (PPA) will be signed between the Developer and the M.P. Power Trading Co. Ltd. who in turn will have back to back Power Supply Agreement with the Distribution Licensees.
  • The Power Purchase Agreement period will be of minimum 20 years from the date of commissioning of plant. However, the agreement may be for a shorter period in case the Developer opts to supply to the Distribution Licensees after consuming the electricity for self-use / third party sale for lesser period.


  • For Solar PV sources, connectivity may be allowed at Low Voltage or 11/33 kV as considered technically suitable by the Distribution Licensee.


  • Costing of the Project will be applicable as per the latest CERC Tariff Regulations. CERC tariff regulation declares the cost of SPV Project as Rs 10 Cr per MW. Cost is the factor of market dynamics and it has reduced in last three year from Rs 20 Cr to Rs 10 Cr per MW. Even in near future it is expected to go down as low as 7 Cr MW.


  • Generation of the State depends upon the Irradiance at the specific site selected for project in MP it varies from 5 – 6 kWh / m2 / day. Even if the most conservative approach is chosen 1.5 MUs of Electricity can be generated by a 1 MW Power Project

Land type

  • The solar power project may be set up at sites identified by Madhya Pradesh Urja Vikas Nigam (MPUVN) and/ or any other sites identified as potential site, within the State of Madhya Pradesh by the project developer.
  • The Land should be plane without undulations. Even if there are some hilly regions or slope then south facing slope and hills are suitable considering the location of MP on earth.
  • There should be NO air polluting industry in the nearby area and other source of shading or dust.

Water Requirement

  • As such for a Solar PV Power Project there is no requirement of water for operations. It is required only for cleaning of panels and as potable water. For this purpose there is no requirement of water linkages or large capacity water reservoirs.

Auxiliary Power

  • Auxiliary Power required for a SPV Power Project is only 0.25 to 3 % of the total power generation cost and it is for pumping the water, computer operations and lighting including other basic amenities.

Life of Project

  • It may be mentioned that useful plant life of a solar power project is considered as 25 years.


  • The MPERC determines the levelised tariff of Rs. 15.49 per unit for 25 years for sale of electricity from Rooftop PV and other small Solar Power Projects with capacity limited to 2 MW

Accelerated Depreciation

  • The MPERC gave orders for projects availing benefits of accelerated depreciation of the above tariff as determined, will be reduced by Rs. 1.41 per unit for Solar PV

CDM Benefits

  • There is sharing of Clean Development Mechanism benefits and this will be as per the provisions in CERC (Tariff for Renewable Energy Sources) Regulations, 2009 which is mentioned as follows
  • “The CDM benefits should be shared on a gross basis, starting from 100% to developers in the first year after commissioning and thereafter reducing by 10% every year till the sharing becomes equal (50:50) between the developers and the consumers, in the sixth year. Thereafter, the sharing of CDM benefits should remain equal till the time that benefit accrues.”

Sale to third party / Captive use
Open Access for Renewable Sources of Energy

  • Renewable Sources of Energy will have Open Access, subject to availability of adequate transmission capacity in Transmission Licensee’s system within the State as per Open Access Regulations
  • The project developer is required to obtain Short / Long Term Open Access permission in case of captive use / third party sale.
  • The open access charges, as applicable and will be levied. In case of sale of power to the Distribution Licensee, such permission is not applicable and is not required to be obtained.
  • In case the point of injection and drawl fall within the jurisdiction of any of the Distribution Licensees involving the transmission network, permission for bulk power transmission is required to be obtained from M.P. Power Transmission Co. by the developer before executing the agreement with M.P. Power Trading Co. and the developer will not be required to execute a separate agreement with M.P. Power Transmission Company Limited.
  • The Distribution Company in whose area the energy is consumed (irrespective of the point of injection) will deduct 2% of the energy injected towards wheeling charges in terms of units.
  • The M.P. Power Trading Company Limited will also claim subsidy from the State Government towards wheeling charges @ 4% of the energy injected at the rate of prevailing energy charges for encouraging generation of power in M.P. through Non-conventional Energy Sources
  • Wheeling charges are not applicable where generation and consumption of energy are at the same premises without involving the licensees system network.

Reactive Power Charges

  • The MPERC orders for the charges for KVARh consumption from the grid as 27 paise/unit

If you any further information feel free to contact us



One Response to "What are the opportunities for investors to develop a 1 MW Solar PV Project in the state of Madhya Pradesh?"
  1. Harsh Kanani says:

    Can you please send me the link of this regulation: hkanani0809@gmail.com

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