Question
The world's largest solar farm is Bhadla Solar Park. Based on the link below: https://en.wikipedia.org/wiki/Bhadla_Solar_Park#Commissioning It has cost about $1.4 billion. Its capacity is 2,245
The world's largest solar farm is Bhadla Solar Park. Based on the link below:
https://en.wikipedia.org/wiki/Bhadla_Solar_Park#Commissioning
It has cost about $1.4 billion. Its capacity is 2,245 MW. Assuming 25% use (6 hours a day at capacity) the production per year will be 5 TWhour (Terawatt-hour). The bid was at $0.034 per KWhr.
So the annual revenues obtained by the owners will be 0.034 x 5 x 1,000,000,000 = $170 million a year.
Assume costs of operations and maintenance are 25%. Then profits after costs = $170 x 0.75 = $127.50 million a year.
The rate of return is $0.1275 billion/$1.4 billion = 9.1% a year.
A return of 9.1% may exceed the required rate of return for most firms. The risk of this project should be low as the demand for the product has very little risk.
Also, the total capacity of the US electricity production plants is 4,000 TeraWatt. This implies the amount to be spent on solar farms in the US is about how much? What is the average price per unit of electricity (in KWHr in Maryland)?
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