G A
UEST RTICLE
As India’s economy expands and
energy consumption surges, the
country finds itself at a critical cross-
roads how do we ensure long-term
energy security while reducing reli-
ance on fossil fuel imports and main-
taining affordability? The answer
lies not just in centralized solar parks
or national-level reforms, but also in
an often-understated solution: local
captive solar power projects.
As the Director of a solar EPC
company deeply engaged in industri-
al and infrastructure-level solar
installations, I’ve witnessed first-
hand how localized solar generation
can directly strengthen not just
in-
dustries, but our national energy grid
and economy.
What Are Captive Solar Projects?
Under the Electricity Act, 2003, a
captive power project is defined as
one where the consumer holds at
least 26% equity in the plant and
consumes more than 51% of the
electricity generated. These systems
are typically deployed either on-site
or at off-site locations through Open
Access (OA), delivering power
directly to the end-user without
relying on distribution companies
for energy procurement.
This decentralization of power gen-
eration plays a critical role in reduc-
ing transmission losses, optimizing
costs, and relieving pressure on the
national grid especially at a time
when India’s power demand contin-
ues to reach new peaks year after
year.
Why Local Captive Solar Makes
Strategic Sense
1. Reduces Grid Dependency and
Transmission Losses
According to the Ministry of Power,
India’s Aggregate Technical and
Commercial (AT&C) losses stood at
15.41% in FY 2021–22 significantly
higher than the global average.
Captive solar projects reduce this
burden by generating electricity
closer to consumption centers, mini-
mizing long-distance transmission
and inefficiencies.
2. Delivers Predictable and Low-
er-Cost Power
Industrial tariffs across Indian states
range from ₹7 to ₹10 per unit,
ofte subject to annual revisions,
cross-subsidy surcharges, and de-
mand charges. Captive solar power,
on the other hand, typically costs
between ₹3.5 and ₹4.5 per unit,
based on state regulations and
project scale (source: CERC and
MNRE). This cost predictability
enables industries to plan capital and
operational expenses more efficient-
ly.
3. Accelerates India’s Renewable
Energy Goals
India aims to install 500 GW of
non-fossil fuel energy capacity by
2030, with 292 GW projected from
solar energy (MNRE). As of June
2025, India had installed 89 GW of
solar power. Bridging the remaining
gap will require contributions not
India’s Path to Energy Sovereignty: Why
Local Captive Solar Projects Matter
56 | September 2025 | www.industrialoutlook.in