Captive and Group Captive Solar Projects in India’s Open Access Market

India is on a mission to accelerate clean energy adoption, and solar power stands at the heart of this transformation. Among the many innovative models supporting this journey, captive and group captive solar projects in the open access market have emerged as game changers for industries and large power consumers. These models allow consumers to directly source solar energy at competitive prices, reduce electricity costs, and meet sustainability goals.

In this article, we will explore what captive and group captive solar projects are, how they work in India’s open access framework, their benefits, challenges, and why they are gaining momentum in 2025.

What is a Captive Solar Project?

A captive solar project refers to a solar power plant set up by a consumer (or a group of consumers) primarily for their own use. As per the Electricity Act 2003, a captive project must meet these key conditions:

• The consumer should own at least 26% equity stake in the generating company.

• The consumer must consume at least 51% of the power generated by the project annually.
  

Captive solar power plants are usually set up under the open access mechanism, enabling large power users (with connected load above 1 MW) to purchase power directly from the generator without depending on the local distribution company (DISCOM).

What is a Group Captive Solar Project?

A group captive solar project is similar to captive, but involves multiple consumers. This model is ideal for businesses that:

• Cannot individually set up a captive plant due to financial or technical reasons.

• Want to collaborate with other like-minded consumers to share ownership and consumption.
  

Key features of group captive projects:

• The consumers collectively must own at least 26% equity in the generating company.
  

• They must together consume at least 51% of the power generated.
  

Group captive models promote collaboration between multiple companies to achieve cost savings and sustainability targets.

Open Access Market and Solar: A Powerful Combination

India’s open access market enables eligible consumers to buy power directly from generators through the grid. This bypasses the local DISCOM’s tariff, offering lower energy costs and flexibility in sourcing clean power. When combined with captive and group captive solar power plants, open access provides:

Reduced energy cost

• Predictable tariffs (free from DISCOM rate hikes)
• Ability to meet Renewable Purchase Obligations (RPO)
• Faster decarbonization of operations

As of 2025, open access solar capacity in India is growing rapidly, with states like Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh, Gujarat, and Rajasthan leading the adoption.

Benefits of Captive and Group Captive Solar Projects

1. Cost Savings

Captive and group captive models help businesses save up to 30-40% on their electricity bills compared to conventional power from the grid.

2. Green Energy Adoption

These models allow businesses to meet their internal sustainability and ESG targets by sourcing clean energy.

3. Exemption from Cross-Subsidy Surcharge (CSS)

One of the biggest attractions is that captive consumers are exempted from CSS and additional surcharges, making the landed cost of power much cheaper.

4. Long-Term Price Stability

Unlike grid tariffs that change frequently, captive models offer predictable energy costs over 15-25 years.

5. Customizable Solutions

Businesses can choose capacity, location, and technology that best suits their needs.

Challenges in Captive and Group Captive Solar Projects

While the benefits are strong, there are some challenges to consider:

• Upfront Capital Requirement – Captive models require equity investment from consumers.

• Regulatory Hurdles – Open access regulations vary by state, and approvals can sometimes take longer.

• Transmission and Wheeling Charges – While CSS is waived, other grid-related charges apply.

• Energy Accounting and Settlement – Requires proper coordination with SLDC and DISCOMs.

Why Captive and Group Captive Solar is Booming in 2025?

Several factors are driving growth:

• Rising Power Tariffs – Grid power costs are rising, making captive solar more attractive.

• ESG & Net-Zero Goals – Corporates are under increasing pressure to reduce carbon emissions.

• Government Push – Policies support open access and captive solar with clearer guidelines.

• Technological Advancements – Falling cost of solar modules (including TOPCon and bifacial panels) improve project viability.

Steps to Set Up a Captive or Group Captive Solar Power Plant

Here’s a simple roadmap:

• Assess Power Demand: Identify your annual energy requirement.

• Choose the Model: Captive (if single consumer) or group captive (if collaborating).

• Form Special Purpose Vehicle (SPV): Set up the entity owning the plant.

• Acquire Land and Approvals: Select site and get necessary permits.

• Sign Open Access Agreements: Apply for connectivity and approvals.

• Construction & Commissioning: Build the plant with chosen EPC partner.

• Start Power Supply: Begin consumption and savings!

Leading States for Captive and Group Captive Solar

Captive vs Group Captive: A Quick Comparison

The Future of Captive and Group Captive Solar in India

The next few years promise robust growth for these models. With the government’s focus on achieving 500 GW of non-fossil fuel capacity by 2030, captive and group captive solar will be crucial. Corporates, MSMEs, and even institutional buyers are expected to adopt these models for energy security and green commitments.

Additionally, new policies like the Green Open Access Rules, 2022 further simplify procedures and ensure more transparent and fair charges, making these models even more attractive in 2025.

Conclusion

Captive and group captive solar projects are transforming how India’s industrial and commercial sectors meet their energy needs. By unlocking affordable, reliable, and clean power through open access, these models support both business competitiveness and national climate goals.