More than at any other time in the history of the human race, the demand for power is at its highest in today’s times. The soaring prices of conventional sources of energy and the environmental concerns have amounted to businesses opting for alternative energy sources. Among green and renewable energy sources, for commercial and industrial organizations in Gujarat, Madhya Pradesh and Rajasthan, going solar is not just a sustainable, but also a profitable choice. The Power is clean, unrestricted and has numerous financial advantages.
According to Mercom speculations, solar installations would have reached approximately 10 GW in 2017 making India one of the most important solar markets in the world, after China and the United States; with large-scale projects under the National Solar Policy (NSM or JNNSM) leading in the states of Tamil Nadu, Gujarat, Telangana and Karnataka.
Still deciding if Solar is for your business or not? Here’s a list of top five benefits to help you make the right choice:
- Reduced Power Costs: Solar Power vs. Grid Electricity
This is a given! Solar power won’t just decrease but almost eliminate your organization’s electricity usage bills. The cost of power per unit is significantly lowered from your current energy costs. Investing in a solar power system is almost like prepaying for your energy consumption at a fraction of the cost. Greater savings is always good for business – big and small.
Attractive and Real Return on Investment
The Government of India has been making efforts on its part to promote sustainable energy production and consumption, and safeguard the future of the earth. The Central Government (MNRE) provides 30% subsidy to Non Profitable Organizations as an incentive to boost solar production. Furthermore, according to the solar policy of each state, Gujarat permits 50% solar installation of contract demand load, Maharashtra allows 100%, Rajasthan allows 80% while Madhya Pradesh has no limits on solar capacity for private projects. Investing in solar power generates both long-term savings and quick payback. You would attain your ROI within 4-6 years of investment. Accelerated Depreciation Benefit
One of the major incentives of solar power is the tax relief due to higher rate of depreciation that businesses can avail under section 32 of Income Tax act. As per the act, the normal depreciation rate for plant and machinery is 15-20%; whereas for solar installations the rate is 40%. This accelerated depreciation accounts for major relief in the upfront cost of solar power plant by 40% in the first year of operation, 40% in the second year and 20% in the third year. Thus, within a period of three years, a business can claim 100% depreciation for a solar project at effective tax rate (as per government) of 33%.
- Fulfilling the Renewable Power Purchase Obligation (RPO) and Becoming Green
On May 13, 2015 the Supreme Court pronounced a landmark judgment on the applicability of RPO regulations stating: “…The object of imposing RE Obligation is protection of environment and preventing pollution by utilising Renewable Energy Sources as much as possible in larger public interest.” As per the amended National Tariff Policy, RPO has been increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022. Additionally, CERC and SERCs have issued various regulations on solar RPOs making it mandatory for the industries using conventional source of energy from open access market.
Your business can become a part of the global initiative to battle against global warming, adhere to your carbon credits and meet your RPO obligation.
- Low Maintenance and Reliable Operation and Power Generation
Any solar power system requires little to zero maintenance post installation. At MI Solar, we go a step beyond by putting our rich experience of 44 years of being one of the oldest EPC players. We use the best-in-class technology and components from Tier 1 Original Equipment Manufacturers; offer a limited product warranty of 10 years and product limited output warranty of 25 years; and guarantee a performance ratio of 75% on our system for 25 years. Thus, once installed, your solar power system with continue to fulfil your energy demands unrestrictedly and cleanly for next 25 years to come.