MNRE Issues Benchmark Costs for Rooftop Solar PV Systems for FY22

The Ministry of New and Renewable Energy (MNRE) has issued a notification with the latest benchmark costs for the installation of new grid-connected rooftop solar PV systems for the present financial year i.e. 2021-22 (FY22).

Benchmark costs for FY22 for general category states/UTs are as follows:

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Benchmark costs for Special Category States/UTs (i.e. North-Eastern States including Sikkim, Himachal Pradesh, Uttarakhand, Jammu and Kashmir, Ladakh, Andaman and Nicobar and Lakshadweep islands):

The ministry has stated that the above benchmark costs include cost of solar PV panels (with domestic cell and modules), inverter (single/3 phase wherever applicable), balance of system e.g. cable, switches/ circuit breaker/ connectors/ junction box, mounting structure, earthing, lightening arrester, and civil works, installation & commissioning, CMC for 5 years, transportation, insurance, applicable taxes, etc. These benchmark costs do not, however, include net metering cost and battery back-up costs.

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The benchmark costs for FY22 will be applicable for all LoAs to be issued/empanelment of vendors to be done by the state implementing agencies, under Ph-II of rooftop solar programme of MNRE, after 10 days from the date of issuance of this
benchmark cost notification, said MNRE.

As per the benchmark costs released for the last financial year, which were issued in July 2020, for projects with a capacity of more than 1 kW and up to 2 kW, the benchmark cost was set at Rs 43/W, or Rs 43,000 per kW. This benchmark cost had been reduced by a staggering Rs11/W as compared to the cost set in the previous fiscal in which such projects attracted a benchmark cost of Rs 54,000 per kW.

Additionally, for FY21, for projects with a capacity above 2 kW and up to 3 kW, the rate for general category states was set at Rs 42/W and for special category states Rs 46/W. And for projects with a capacity above 3 kW and up to 10 kW, the rate was set at Rs 41,000 per kW (General) and Rs 45,000/kW (Special).

Of course, with tenders in each state for empanelment and selection of EPC/Installers, these rates will fall much further finally. In fact, with just a 5 year proviso in capital subsidy rooftop projects for instance, many industry players complain that quality is given the go by, and expecting these plants to last the claimed 25 year life is fanciful thinking.