Introduction

Electricity is one of the largest operating expenses for many commercial and industrial businesses in India. Manufacturing facilities, data centers, warehouses, hospitals, hotels, offices and other large consumers often require substantial electricity throughout the year.

Businesses are also increasingly looking to control energy costs, improve energy security and increase the share of renewable electricity in their energy mix.

This is where Open Access Solar Power in India becomes an important option.

Instead of purchasing all electricity from the local distribution company, eligible consumers can procure renewable electricity from a solar or other renewable energy project through the applicable open-access framework.

The electricity can be generated away from the consumer’s premises and delivered through the electricity network, subject to applicable regulations, charges, approvals and technical conditions.

India’s Green Energy Open Access Rules created a national framework intended to facilitate renewable-energy procurement through green open access.

What Is Open Access Solar Power?

Open access solar power allows an eligible electricity consumer to procure electricity from a renewable-energy generator through the electricity network rather than relying entirely on electricity supplied by its local distribution licensee.

A simplified model is:

For example, a manufacturing company located in one area may procure electricity from a solar project located elsewhere.

The electricity travels through applicable grid infrastructure while the consumer pays relevant generation and network-related charges.

Open access is therefore not simply a method of installing solar panels. It is a renewable-energy procurement mechanism involving:

• Solar generation
• Grid connectivity
• Electricity transmission
• Wheeling
• Metering
• Scheduling and settlement
• Regulatory approvals
• Applicable charges
• Contractual arrangements

What Is Green Energy Open Access?

The Ministry of Power notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 to facilitate renewable-energy procurement.

The framework has subsequently been amended, including changes affecting consumer eligibility.

Businesses evaluating solar open access in India should therefore review both the national framework and applicable state-level implementation.

100 kW Eligibility for Green Energy Open Access

One important development in India’s green open-access framework was the reduction of the relevant eligibility threshold from 1 MW to 100 kW for applicable consumers.

The framework also includes provisions relating to aggregation of qualifying connections located within the same electricity division of a distribution licensee.

Captive consumers are treated separately under the cited framework.

Is Open Access Solar Cheaper Than Grid Electricity?

There is no universal answer.

The economics of open access renewable energy depend on multiple factors.

A state-specific financial model is essential before making a procurement decision.

Benefits of Open Access Solar Power

1. Access to Renewable Electricity

Businesses can procure electricity generated from renewable sources without necessarily installing a large solar system on their own property.

2. Reduced Dependence on Conventional Power

Renewable energy procurement can diversify a company’s electricity supply strategy.

3. Potential Energy Cost Savings

Where project economics are favourable, solar open access can potentially reduce the effective cost of electricity.

4. Larger Renewable Projects

Businesses with limited rooftop space can potentially participate in larger off-site solar projects.

5. Sustainability Goals

Renewable electricity procurement can support corporate environmental and decarbonization objectives, subject to applicable accounting and certification requirements.

6. Scalability

Large businesses can evaluate commercial solar power procurement at a scale beyond their individual rooftop capacity.

Solar Open Access Charges Businesses Should Understand

The headline solar tariff is only one component of the overall electricity cost.

Businesses should assess all applicable solar open access charges, which may include:

• Transmission charges
• Wheeling charges
• Cross-subsidy surcharge
• Additional surcharge
• Banking charges
• Scheduling-related charges
• Deviation-related costs
• Taxes and duties

What Are Solar Wheeling Charges?

Solar wheeling charges are associated with using electricity-network infrastructure to transport electricity from the renewable-energy generating project to the consumer.

The applicable charges depend on the electricity network, state regulations, consumer category and project structure.

What Are Solar Banking Charges?

Solar banking refers to arrangements under which renewable electricity may be accounted for across different time periods where permitted by applicable regulations and contractual arrangements.

Banking provisions can have a significant impact on the economics of an open access solar project.

Businesses should therefore check the latest applicable state regulations before modelling savings.

How to Evaluate an Open Access Solar Project

Technical Due Diligence

• Solar plant capacity
• Technology
• Expected generation
• Plant location
• Grid connectivity
• Transmission path
• Generation forecast
• Plant performance
• Metering arrangements

Financial Due Diligence

• Energy tariff
• Open-access charges
• Wheeling
• Transmission
• Surcharges
• Banking
• Taxes
• Escalation

Developer Due Diligence

• Developer track record
• Financial strength
• Technical capability
• Generation history
• Regulatory compliance

How Businesses Can Start With Solar Open Access

Frequently Asked Questions About Open Access Solar Power in India

1. What is open access solar power in India?

Open access solar power in India allows eligible consumers to procure electricity generated by a solar project through the electricity network instead of relying entirely on their local distribution company.

2. Who can use green energy open access?

The national framework includes a 100 kW eligibility threshold for relevant consumers, while captive consumers are treated separately. State-level implementation and other conditions must be verified.

3. Is open access solar cheaper than grid electricity?

It can be, but there is no universal answer. Businesses need to compare the complete delivered renewable-energy cost with their existing electricity cost.

4. What are solar open access charges?

Depending on the project and state, charges may include transmission, wheeling, cross-subsidy surcharge, additional surcharge, banking, scheduling and taxes.

5. What is solar wheeling?

Solar wheeling refers to the use of electricity-network infrastructure to deliver electricity from a renewable-energy generating project to the consumer.

6. What is solar banking?

Solar banking is a mechanism under which renewable energy may be accounted for across different time periods when permitted by applicable regulations and arrangements.

7. What is the difference between captive solar and third-party open access?

In third-party open access, the consumer purchases renewable electricity from a separate project owner or developer. Captive arrangements involve ownership and consumption requirements under the applicable captive generation framework.

8. Can a business with multiple electricity connections use green open access?

The national framework includes provisions for aggregating qualifying connections in the same electricity division of a distribution licensee. Specific eligibility must be verified for the business location.

9. Does open access solar require a PPA?

A Power Purchase Agreement (PPA) or another contractual procurement arrangement may be used depending on the project structure.

10. Is open access solar suitable for small businesses?

It can be suitable depending on electricity demand, eligibility, state regulations and project economics. A feasibility assessment should be completed before making a long-term commitment.

Conclusion

Open Access Solar Power in India is becoming an increasingly important renewable-energy procurement option for businesses seeking alternatives to conventional grid electricity.

The Green Energy Open Access framework has expanded opportunities for eligible consumers to access renewable electricity, while the applicable threshold and treatment of captive consumers provide different routes for renewable-energy procurement.

However, open access should not be evaluated simply by looking at a solar project’s generation tariff.

A proper business case needs to consider the complete delivered cost of electricity, including applicable transmission, wheeling, banking, cross-subsidy surcharge, additional surcharge, taxes and other regulatory costs.

Businesses should also assess technical feasibility, developer credentials, contract terms, regulatory requirements and long-term electricity consumption patterns.

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