Assumptions for cost of energy from Rooftop Solar Vs Grid Electricity in Hyderabad

1. Grid electricity cost is Rs 9.38 per unit(including fixed demand charges) and escalates at 3% p.a
2. DG electricity cost is Rs 15 per unit and escalates at 3% p.a and it constitutes 10% of energy mix for next 5 years
3. Interest cost of 12.5% p.a considered on the diminishing invested amount assuming that savings and REC revenues pay for investment
4. O&M cost is about 2% and escalates at 3% p.a and Insurance cost is 0.5% of the plant cost on depreciated cost/ WDV
5. Generation from solar is simulated with PVSyst software using Meteonorm solar radiation datasets for Hyderabad
6. Solar generation degrades by 0.5% per year.
7. Renewable Energy Credits (REC) sales revenue is Rs 3.5 per unit until 2017 and Rs 1.5 per unit thereafter for 3 years
8. Excise / customs duty drawback credit is about 5% of the plant cost
9. As REC credits have been considered, the project is not eligible for 15% subsidy from central government and hence not accounted.