Electricity costs continue to rise for industries across India, and many companies are looking for long-term solutions that bring stable pricing and reliable supply. This is where the Captive Solar Power Plant Gurgaon model has gained popularity. It lets industries produce their own electricity at a cheaper rate and reduce their dependence on grid power.
In this guide, we’ll explore what captive solar systems are, how they work, the costs involved, the benefits, and the steps needed to set one up.
What Is a Captive Solar Power Plant?
A Captive Solar Power Plant is a solar project where power is generated mainly for the company that owns or invests in it. According to the Electricity Act, a project qualifies as captive when:
The consumer owns at least 26 percent equity in the plant
The consumer uses at least 51 percent of the power generated
This model can be used by manufacturing units, large commercial complexes, or organizations with high energy demand.
Industries prefer this approach because it reduces electricity bills and gives more control over long-term costs.
How a Captive Solar Model Works
There are two main ways a captive system supplies power:
On-Site Captive Solar
A solar plant is installed inside the factory premises.
Power is consumed directly and reduces grid dependence during the day.
Off-Site Captive Solar (Open Access Solar)
The solar plant is built on land away from the factory.
The electricity is supplied to the company through the state grid.
Companies choose between the two based on available space, energy consumption, and long-term plans.
Key Requirements for Captive Status
Equity ownership by the consumer
Minimum yearly consumption compliance
Open access approvals for off-site plants
These rules help companies qualify for exemptions on certain grid charges.
Why Businesses Prefer Captive Solar Power Plants
A Captive Solar Power Plant offers several financial and operational benefits, especially for industries with high monthly power consumption.
1. Lower Electricity Tariffs
Industrial power tariffs can be between ₹7 and ₹12 per unit.
Captive solar brings this down to ₹3 to ₹5 per unit.
2. Protection From Rising Tariffs
Grid tariffs increase every year due to fuel prices and distribution losses.
A captive plant locks your energy cost for 20 to 25 years.
Lower DG Fuel Costs
Solar reduces daytime reliance on diesel generators.
This is helpful for areas with unstable grid supply.
4. Long-Term ROI
Most companies recover their investment within 3 to 5 years.
After that, energy generation becomes nearly free.
5. ESG and Sustainability Benefits
Companies meet green energy targets and strengthen their sustainability profile.
Types of Captive Solar Models
Businesses can choose from different structures depending on their budget and power needs.
1. Full Captive Model
The company funds 100 percent of the project
Maximum savings
Ideal for large industries
2. Group Captive Model
Multiple companies come together for one project
Each consumer owns a percentage of equity
Best for medium-sized businesses that want savings without full investment
3. Hybrid Captive Model
Combines solar with wind or battery storage.
Useful for companies that want more stable and round-the-clock power.
Costs of a Captive Solar Power Plant
The cost of a captive project depends on:
Plant size
Land cost
Technology (mono-PERC, TOPCon, HJT)
Transmission distance
State regulations
Captive Solar vs Rooftop Solar vs Open Access Solar
Understanding the differences helps businesses choose the right model.
Rooftop Solar
Installed inside the premises
No transmission charges
Limited by roof area
Open Access Solar
Power is delivered from a remote plant
Suitable for companies with high load
Charges apply but still cheaper than grid power
Captive Solar
Ownership ensures long-term savings
Better tariff control than PPA or rooftop
Works for both on-site and off-site models
Step-by-Step Process to Set Up a Captive Solar Plant
Setting up a Captive Solar Power Plant involves multiple technical and regulatory steps. Here is a simplified path:
Step 1: Load Assessment
Understanding the company’s energy usage.
Identifying solar potential and required capacity.
Step 2: Feasibility Report
A DPR (Detailed Project Report) explains:
Plant size
Expected generation
Savings
Payback period
Step 3: Location Finalization
For off-site projects, selecting land with:
Good solar radiation
Easy grid access
Reasonable cost
Step 4: Equity and Structure Design
Finalizing ownership patterns for captive or group captive models.
Step 5: EPC Partner Selection
Choosing a reliable EPC firm that can:
Handle approvals
Deliver strong engineering
Provide long-term O&M
Step 6: Regulatory Approvals
Includes:
Open access application
Grid synchronization
CEIG approvals
Metering permissions
Step 7: Construction and Commissioning
Takes around 4 to 6 months depending on size.
Step 8: Power Supply Starts
Once synchronized, the plant begins exporting power to your facility through the grid.
Challenges in Captive Solar Projects
Although the model offers high savings, businesses should be aware of certain challenges.
Land Availability
Off-site projects need sufficient land, usually 4–5 acres per MW.
Regulatory Changes
State policies may change.
This is why companies should work with experienced EPC partners.
Initial Investment
CAPEX is needed unless you opt for a group captive model.
Grid Reliability
Some states have stricter grid rules which can delay open access approvals.
Best Industries for Captive Solar Power
Sectors with high monthly power consumption benefit the most.
Manufacturing Units
Textiles, steel, cement, automotive, and chemical plants regularly adopt captive solar.
Data Centers
High energy demand makes long-term tariff control important.
Commercial Complexes
Malls, office parks, and warehouses install captive solar for stable costs.
Food Processing
Cold storage units gain from lower daytime electricity prices.
FAQs About Captive Solar Power Plants
1. How much can a company save with captive solar?
Most industries save 40 to 60 percent on electricity bills.
2. Can small companies choose captive solar?
Yes. The group captive model is designed for them.
3. What is the lifespan of a captive solar plant?
Most plants run efficiently for 25 years or more.
4. Do captive plants need batteries?
Not usually. Batteries are optional and raise the project cost.
5. What are the main approvals required?
Open access, grid synchronization, metering, and CEIG approvals.
6. How many acres are needed for 1 MW?
Around 4 to 5 acres.
7. Can industries use leased land for captive solar?
Yes. Leasing is common for off-site projects.
Conclusion
A Captive Solar Power Plant is one of the smartest long-term energy solutions for industries. It cuts electricity costs, reduces dependency on the grid, and helps businesses meet sustainability commitments. Whether installed on-site or at a remote location, captive solar offers strong financial benefits and predictable tariffs for decades.
