Choosing between Single Captive, Group Captive, and Third-Party PPA determines your capital requirement, legal ownership, and tariff savings under MERC open access rules. All three routes allow large power consumers to buy electricity from off-site solar farms delivered through the state transmission grid. However, your equity stake fundamentally dictates whether you are legally exempt from Cross-Subsidy Surcharges (CSS) and Additional Surcharges (AS).
Dedicated generator equity with maximum regulatory exemptions.
A single consumer holds minimum 26% equity in the generating company and consumes at least 51% of annual generated electricity. Captive status grants full statutory exemption from Cross-Subsidy Surcharge (CSS) and Additional Surcharge (AS) under Section 9 of the Electricity Act 2003.
Large corporate power consumers and continuous process plants with sanctioned demand of 3 MW or higher able to deploy direct capital.
Own minimum 26% voting equity stake in generating company
Consume minimum 51% of annual plant generation
100% statutory exemption from Cross-Subsidy Surcharge
Selecting the optimal Open Access model requires balancing upfront capital allocation against multi-year operational savings and regulatory compliance obligations.
Cross-Subsidy Surcharge Arbitrage
Captive and Group Captive frameworks legally eliminate the Cross-Subsidy Surcharge (CSS), reducing landed electricity cost by ₹1.50 to ₹2.50 per unit.
Capital Exposure vs. OPEX
Single captive demands dedicated equity investment; group captive fractionalizes the equity requirement; third-party PPA involves zero capital outlay.
Annual 51% Consumption Rule
Captive status requires annual verification that consumers used 51%+ of power in proportion to equity. Chirayu Power provides end-to-end compliance tracking.
| Feature | Single Captive | Group Captive | Third-Party PPA |
|---|---|---|---|
| Equity Share Required | Min 26% (by 1 entity) | Min 26% (shared across group) | 0% equity required |
| Consumption Obligation | Min 51% of annual generation | Min 51% proportional to share | As per PPA terms |
| Cross-Subsidy Surcharge (CSS) | 100% Exempt | 100% Exempt | Fully Applicable |
| Additional Surcharge (AS) | Exempt under prevailing norms | Exempt under prevailing norms | Applicable per DISCOM rules |
| Setup Complexity | Moderate (equity & PPA audit) | High (SPV structuring & SHA) | Lowest (standard bilateral PPA) |
| Best For | Large corporate with cash | Mid-to-large industrial clusters | Zero-capex risk-averse buyers |
