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Introduction: Why Businesses Are Rethinking How They Buy Electricity
For most Indian businesses, electricity has always been treated as a fixed, unavoidable cost — something you pay every month without question.
But today, rising tariffs, cross-subsidy charges, and unpredictable grid pricing are forcing business owners, CFOs, and plant heads to ask a critical question:
Is there a smarter way to buy power?
The answer for thousands of companies across India is yes — through the Group Captive Solar Model.
This model allows businesses to switch to solar power with zero upfront investment, no operational burden, and guaranteed long-term savings.
In this blog, we explain:
- What the Group Captive Solar Model is
- How it works step by step
- Why it is legally compliant and financially attractive
- Who should adopt it
- How it delivers immediate and long-term savings
What Is the Group Captive Solar Model?
The Group Captive Solar Model is a renewable energy framework under Indian electricity regulations that allows multiple consumers to collectively own and consume power from a solar plant.
Instead of installing panels on your own rooftop or land, you:
- Become a shareholder in a large off-site solar power plant
- Consume electricity generated from that plant
- Pay a lower, fixed cost per unit compared to grid power
This model is governed by Electricity Rules, 2005, and is fully legal and widely adopted across India.
Why the Group Captive Model Exists
India’s power sector was designed to:
- Encourage renewable energy adoption
- Reduce dependence on coal
- Lower costs for industrial consumers
The Group Captive framework was introduced to allow businesses — especially those without land or rooftop space — to access large-scale, low-cost solar power.
It bridges the gap between:
- Expensive grid electricity
- Capital-intensive captive power plants
How the Group Captive Solar Model Works (Step by Step)
Step 1: Solar Power Plant Development
A large solar power plant is developed by a solar developer on suitable land with grid connectivity.
Step 2: Business Becomes a Shareholder
Your company invests in a minimum 26% equity stake (directly or through a structured vehicle) in the solar project.
This is what legally qualifies the plant as “captive.”
Step 3: Power Is Generated & Supplied
Electricity generated at the solar plant is transmitted to your facility through the state grid under open access regulations.
Step 4: You Pay Only for Power Consumed
You pay a pre-agreed, lower tariff for the electricity you consume — typically much lower than grid rates.
Step 5: Long-Term Savings Begin
Savings start from the first billing cycle and continue for 15–25 years, depending on the agreement.
Why “Zero Investment” Is Still Accurate
A common question is:
“If I need to own 26%, isn’t that an investment?”
In practice, most Group Captive projects are structured so that:
- The developer arranges financing
- The customer’s equity is nominal or adjusted
- There is no heavy capital outflow like a full captive plant
Compared to installing a private solar plant (which can cost crores), Group Captive involves:
- Minimal capital exposure
- No construction risk
- No maintenance responsibility
This is why it is widely referred to as a zero or near-zero investment model.
Cost Comparison: Group Captive Solar vs Grid Power
| Parameter | Grid Electricity | Group Captive Solar |
|---|---|---|
| Cost per unit | ₹7 – ₹10 | ₹4 – ₹5 |
| Tariff volatility | High | Low & predictable |
| Fuel dependency | Coal-based | Zero fuel |
| Long-term visibility | Poor | Excellent |
| Maintenance burden | NA | None on consumer |
The savings typically range between 25% and 40%, depending on state charges and consumption profile.
Who Should Use the Group Captive Solar Model?
This model is ideal for businesses that:
- Consume large volumes of electricity
- Operate during daytime hours
- Want savings without capital investment
- Have multiple facilities or locations
- Are under ESG or export compliance pressure
Common Industries Benefiting
- Manufacturing & engineering
- Textiles & garments
- Food processing
- Chemicals & pharmaceuticals
- Automotive & components
- Data centers & warehouses
Financial Benefits Beyond Lower Tariffs
1. Immediate Cost Reduction
Savings begin from the first month of supply, improving cash flow instantly.
2. Improved Profit Margins
A 30% reduction in electricity costs can improve net margins by 3–6% without operational changes.
3. Long-Term Price Protection
Tariffs are fixed or escalated minimally, protecting businesses from future price shocks.
ESG, Sustainability & Compliance Advantages
Lower Carbon Footprint
Group Captive Solar significantly reduces Scope 2 emissions, helping companies meet sustainability targets.
Global Buyer Preference
International clients increasingly prefer suppliers using renewable energy.
ESG Reporting Support
Solar power strengthens:
- ESG disclosures
- Sustainability reports
- Corporate responsibility positioning
For export-oriented businesses, this is becoming a competitive requirement, not just a nice-to-have.
Risks & How They Are Mitigated
Regulatory Risk
Group Captive projects are governed by established electricity rules. Long-term PPAs reduce uncertainty.
Generation Risk
Plants are designed with conservative generation estimates, and grid backup ensures continuity.
Operational Risk
Operations and maintenance are handled entirely by the developer.
Common Myths About Group Captive Solar (Debunked)
“It’s too complex.”
Developers like Panchami Global handle compliance, approvals, and operations.
“What if regulations change?”
Captive rules have remained stable for years, and PPAs protect consumer interests.
“What if solar generation drops?”
Grid power acts as backup. There is no operational downtime.
Why the Group Captive Model Is Growing Rapidly in India
- Solar tariffs are at historic lows
- Businesses want asset-light cost savings
- ESG pressure is increasing
- Power reliability is becoming critical
As electricity prices continue to rise, Group Captive Solar is emerging as the smartest way to buy power.
How Panchami Global Delivers Group Captive Solar Solutions
Panchami Global provides complete Group Captive solar solutions including:
- Consumption analysis & feasibility study
- Regulatory & compliance handling
- Project structuring & onboarding
- Long-term power supply management
Our focus is simple:
Deliver guaranteed savings with zero operational hassle.
Final Call to Action
Electricity costs will keep increasing.
Your business doesn’t have to pay more forever.
Want to know if Group Captive Solar is right for your business?
Get a customised savings assessment with Panchami Global today.
