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PPA (Power Purchase Agreement)
Revenue earned through sale of electricity to private party or government.
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REC (Renewable Energy Certificate)
These are certificates which a solar power plant developer acquires from the government on generation of solar power from the solar power plant. These certificates are traded on the power exchanges in a price band of Rs.9.30 per unit - Rs.13.40 per unit.
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CER (Certified Emission Rates)
Emission reduction projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tons of CO2, which can be counted towards meeting Kyoto target.
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Escalated Land Value
Huge chunk of Land is acquired for solar generation. The value of land will definitely be escalated after 25 years (minimum period of project life).
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Tax Holiday for 10 Years
No income tax is payable on revenue earned from solar for 10 years.
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80% Accelerated Tax Depreciation
This will help in huge tax benefit on your existing business revenue. You can claim for 80% depreciation in 1st year and 16% in second year and so on for further years.
How investment in solar is a safe bet?
Yearly Returns (your money will not be locked-in as in the case of Land and Fixed Deposit)
Safe returns for 25 years ( your returns are not subject to market risks as in the case of Mutual Funds and Shares)
Minimum 20% safe returns (Unlike shares, mutual funds, it pays off better)
Six months Gestation Period (Unlike other projects, it starts paying quickly)
Asset Generation (A lifetime asset which will grow as you grow)
Solar Investment Models
In large scale solar power plants