Captive
The consumer owns the plant.
Inside the consuming entity or a company it controls. A captive user pays no cross-subsidy surcharge, and that exemption is most of the economics.
Solar · commercial and industrial
The offtaker is a company. Everything follows from that.
Under PM KUSUM the buyer is a distribution utility at a price the SERC sets. Here the buyer is a company at a price the two of you negotiated, so nothing regulated stands behind the revenue line. The lender stops appraising a plant and starts appraising a counterparty: whether it pays, whether it is still consuming in year twelve, and what the asset is worth if it is not. Two dated rules now sit on top of that, and both price off a commissioning date rather than off the project.
1 Jun 2026
ALMM List-II live: a project commissioned since this date needs List-I modules built with List-II cells, unless its bid closed on or before 31 August 2025
50%
of ISTS charges waived for a project commissioned after 30 June 2026; 25% after 30 June 2027; none after 30 June 2028
MNRE order No. 283/64/2025-GRID SOLAR on ALMM List-II; CRISIL Ratings on the ISTS waiver sunset, July 2025.
The structures actually used
The choice is made on regulatory grounds more often than commercial ones: the same array on the same roof can be a CAPEX sale, an OPEX PPA or a group captive holding.
Group captive
The consumers hold a minority of a developer’s plant.
The consuming companies hold not less than 26% and take not less than 51% of annual generation — both tests read backwards against a year already run.
Open access
A third-party PPA over the licensee’s network.
From 100 kW of contracted demand, aggregable across connections in one distribution division. The consumer is buying the gap between the delivered price and its grid tariff.
Rooftop
CAPEX and OPEX are two different financings.
CAPEX is equipment finance with no PPA. OPEX needs project debt, and its security is the right to keep selling into that roof — the lease and step-in, not the panels.
What a lender underwrites, and what decides viability
- A rating the lender builds itself
- Most C&I offtakers are mid-market manufacturers with none. Three years of statements, the GST returns behind them, bank conduct, and every facility already drawn.
- Consumption, not only payment
- An offtaker that stops consuming is the same loss as one that stops paying, and the more common failure. Load history and shift pattern are read for that reason.
- The termination curve
- What the offtaker pays if it walks, and the date that figure falls below the debt outstanding. That date is the exposure being priced.
- The charges, set state by state
- Cross-subsidy and additional surcharge, transmission and wheeling, and the losses that appear as units that did not arrive. Set by the commission, revisited in tariff orders.
- Banking
- Whether surplus can be banked and drawn later, over what period, at what charge, and whether withdrawal is barred at peak. States diverge most here.
- Two dates the schedule has to clear
- The ISTS waiver steps down after 30 June 2027 and ends after 30 June 2028; ALMM List-II binds anything commissioned since 1 June 2026 that was not bid by 31 August 2025.
- Who lends
- NBFCs and private banks; PSU banks where the offtaker or the sponsor is investment grade. Below a certain ticket a balance-sheet line is cheaper and faster.
What actually kills these deals
None of them are generation risk. Each is a term or a threshold that was correct when the model was built and stopped being correct afterwards.
- A group captive that fails its own arithmetic
- Two quarters below plan at one consumer, and that whole year’s exemption is in question — retrospectively, long after the money was spent.
- A roof the developer does not control for long enough
- A lease shorter than the PPA, or a landlord who is not the consumer. The same defect as a short land lease, and it surfaces just as late.
- A saving that compresses
- A category reclassification or a new subsidised slab narrows the gap the consumer was buying, and a PPA with no floor leaves the developer holding the difference.
- A charge that changes after financial close
- Additional surcharge revised upward, or banking withdrawn — in states where the economics had been signed off on the previous position.
- A commissioning date that crosses a rule
- Slipping past an ISTS step or the ALMM date changes the delivered cost of power under a PPA priced before it slipped.
Questions we answer in the first conversation
We engage from the point the offtaker is identified rather than the point the PPA is signed, because the structure and the state’s charges are far cheaper to change then.
- Which structure does this consumer qualify for, and what does each cost in this state?
- What do this state’s charges and banking terms do to the saving the consumer is buying?
- Which ISTS step and which ALMM position does the commissioning date land on?
- The offtaker has no external rating. What will a lender build one from, and what will it conclude?
- Is project debt the right product at this ticket, or is a balance-sheet line cheaper?