Mahindra EPC intends to set up 200 MW of solar power plants in Tamil Nadu, across two locations — near Madurai and Tiruchi. At a cost of Rs 7 crore a MW, the project would call for an investment of Rs 1,400 crore. When completed, a group company of Mahindra & Mahindra will own a third of the 200-MW capacity, while the rest would be sold to those who wish to own solar assets.
Disclosing this at a press conference here on Thursday , Basant Jain, CEO of Mahindra EPC Services Pvt Ltd, said that the company would need to buy 600 acres at each location.
Mahindra EPC is active in the Tamil Nadu solar market and has secured many construction jobs, mainly from the developers who have won rights to sell solar power to the State electricity generation and distribution utility Tangedco at tariffs determined through a recent bidding process. The names of these customers have not been disclosed, but it is learnt that the jeweller GRT is one of them. GRT intends to put up a 15 MW solar project, for starters. Its target is 100 MW.
Commissioned
Indeed, today’s press conference was to announce the formal commissioning of 3.2 MW of solar plants that will be owned by two auto component companies — M M Forgings and Super Auto Forge. These two companies are among the seven that plan a total capacity of 50 MW — again Mahindra’s customers. The solar plants would generate 1.6 million units per MW per year — a level that has become the norm in the industry today.
Factoring in ‘accelerated depreciation’, a tax sop that allows companies to write-off 80 per cent of the cost of the solar plant as depreciation, the cost of solar power would come to “under Rs 5”. These companies find putting up solar projects worthwhile because they expect the cost of conventional power to go up. Solar power costs, however, will remain fixed for the 20-25-year life of the plants.