Buying a Factory That Already Has Solar: The Due-Diligence Checklist

When you buy a factory with a solar plant, treat the plant as a separate asset with its own paperwork. Confirm that the DISCOM connection and any net-metering arrangement can move to you, that no electricity dues travel with it, that 12 to 24 months of generation data support the seller's claims, and that the roof, warranties and O&M records transfer cleanly.

What exactly are you buying?

Start with ownership, because three structures look identical from the road. The seller may own the plant outright. A developer may own it and sell the factory power under a long-term agreement, with the roof leased to the developer. Or the plant may sit in a group company that is not the company being sold. The right questions differ in each case.

The Haryana Electricity Regulatory Commission's 2021 rooftop regulations let the consumer set up the plant "on their own or through third party", so a third-party plant on a factory roof can be a legitimate arrangement; check your own state's rules. If the plant belongs to someone else, you are buying a counterparty relationship and a roof lease, not a generator. If it belongs to the seller, ask whether it is carried on the balance sheet being sold and whether any bank holds a charge over it. Your lawyer should run a charge search on the seller company; your accountant should decide how the asset is treated for tax, which we do not advise on here.

Will the grid arrangement transfer to you?

The net-metering or open-access arrangement is between the DISCOM and the registered consumer, not between the DISCOM and the building. Haryana's supply code is a useful worked example. A connection can be moved to another person on transfer of ownership or occupancy, on an application in the prescribed form with proof of ownership. The request is not accepted until dues against the connection are settled, the applicant gives an undertaking to pay arrears of the previous owner, including those detected later on audit of accounts, and the change of name is to be effected within two billing cycles after acceptance. A new account number is allotted in a change of this kind.

That last point matters for solar. Whether your net-metering agreement carries over under the new account, or must be signed again, is a state and DISCOM question. We did not find a general rule, so ask the DISCOM in writing before closing, and make a clean transfer a condition of the deal.

Three further rule checks decide whether the plant still works for you after the sale:

• Size against the connection. Haryana caps a rooftop plant at the sanctioned load, or at the contract demand for an HT connection, and allows net metering up to 500 kW or the sanctioned load, whichever is lower. If you plan to cut the contract demand after buying, the plant can end up larger than the cap.
• Size against consumption. Under the same regulations, net-metered generation is capped at 90% of the consumer's electricity consumption over the financial year, and excess above that is not carried to the next year. A buyer whose consumption is lower than the seller's loses credit.
• Open access is different. The Haryana regulations say net metering is not available to a consumer drawing power under open access. Under the central Green Energy Open Access Rules, 2022, a consumer needs a contracted demand or sanctioned load of 100 kW or more, except captive consumers, and applications not decided in 15 days are deemed approved subject to technical requirements. Open-access contracts are consumer-specific, so read them as separate documents. Our note on open-access solar explains the route.

These are Haryana's figures, used because we could read the primary text. Other states differ; check your own commission's regulations.

The document checklist

Walk the roof with an engineer

Paper cannot show corrosion under clamps, shading from a new stack, or loose DC cable runs. On site, check structure and fixings, the condition of purlin clamps and any leaks beneath, cable routing and labelling, earthing continuity, isolators and inverter room condition, and whether modules show hot spots. Thermal imaging finds failing cells and connectors quickly; our note on what drone thermography finds shows the typical faults. For sheet roofs, see PEB roof loads, clamps and leaks. Also look at fire: a solar array over stored goods changes how the fire officer reads the building.

Does the plant perform as claimed?

Ask for inverter-level generation by month. Compare it with what the site should produce. As a planning cross-check only, the solar calculator on this site defaults to 120 kWh per kW per month for North India; real yield depends on site, tilt, shading and season, so a plant far below that needs an explanation, and one far above it needs checking for meter or data errors. Look at the trend, not one month: a slow fall points to soiling, shading or degradation, and a sudden step points to a failed string or inverter. Ask whether the seller's performance figures use a measured irradiance sensor; without one, performance ratio is an estimate. Our guide to performance ratio and how to test it sets out the method.

Pricing the plant

Value the plant on what it will still save you, less running cost, inverter replacement and the roof work it needs, and cross-check against replacement cost. As a reference, the published Secured Engineers range for a new C&I plant is ₹24,000–32,000 per kW excluding GST (see solar EPC). A used plant should price below a new one, because of age, degradation and warranty already consumed, unless the grid approvals it carries cannot be obtained again today.

How Secured Engineers helps

We do not sell audits or sign-off certificates, and a buyer's lawyer and accountant should lead the transaction. What we do is design review and rectification: we can read the plant's single-line diagram and structure against the drawings, quote the fixes for faults your engineer finds, and take over operation and maintenance afterwards. We design in-house, file Fire NOC, CEIG and DISCOM net-metering applications in-house, and deliver MEPF and solar under one contract from our Noida (Delhi NCR) and Ludhiana offices. Our record is 535+ projects across 18+ states, with 89.77% repeat clients.

If you are weighing a factory that already has solar, start with the solar for factories page, then send us the plant's single-line diagram and bills on WhatsApp, call +91 70099 85817, or ask for a free proposal covering rectification or an expansion.