MNRE Issues New Benchmark Costs for Rooftop Solar Projects in FY 2021

Will be applicable for all LoAs to be issued after July 31, 2020

July 22, 2020


The Ministry of New and Renewable Energy (MNRE) has published benchmark costs for grid-connected rooftop solar projects for the financial year (FY) 2020-21.

The benchmark costs will be applicable for all letters of award (LoAs) to be issued or for the vendors to be empaneled after July 31, 2020.

The benchmark costs are inclusive of the total project costs, which include solar modules, inverters, the balance of systems, cost of civil works, installation, commissioning, transportation, and comprehensive maintenance for five years. The benchmark costs do not include net metering costs and battery back-up costs.

Benchmark cost for FY 2019-20 was ₹54 (~$0.79)/W for rooftop solar systems of sizes 1-10 kW. However, now the capacities have been split into 1 kW, 1-2 kW, 2-3 kW, and 3-10 kW.

For systems between 10-100 kW, the benchmark costs have been reduced to ₹38 (~$0.51)/W from the ₹48 (~$0.70)/W in the previous year. The cost for systems of 100-500 kW in size is lower by 20% when compared to the preceding year’s cost of ₹45 (~$0.66)/W.

The benchmark costs for different categories of rooftop solar systems are given below:

Benchmark Costs for Grid Connected Rooftop Solar Power Projects for the Year 2020-21

As per the MNRE’s notification, the rates would vary for states which come under the special category status, such as the north-eastern states, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, and union territories of Andaman & Nicobar Islands, and Lakshadweep.

The order added that the capacity would be calculated based on the inverter capacity or the solar module array capacity, whichever is lower. The Ministry also said that the separate benchmark cost for special category states would be applicable for projects under phase II of the program only.

In August last year, MNRE had issued operational guidelines to implement the second phase of its grid-connected rooftop solar program. Overall, 22 GW of rooftop solar PV projects is to be set up under the second phase of this program.

The Ministry also noted that all the participating distribution companies under phase II of the rooftops solar program would ensure that the rate is discovered through competitive bidding.

In January this year, MNRE issued a clarification for the second phase of its rooftop solar program under which distribution companies will invite expressions of interest for empaneling the agencies to supply, install, and commission rooftop solar systems in residential premises. The Ministry had clarified that all the bidders within the lowest bid price bracket will be empaneled and will provide services to the consumers at the lowest agreed tariff rate.