Captive vs Open Access Solar: Which Route for a 1 MW+ Consumer

"Captive" and "open access" are not rivals. Captive is a status your power plant earns by ownership and consumption; open access is the right to carry power over the grid. For a 1 MW+ consumer the real choice is between an on-site captive plant, an off-site or group captive plant that uses open access, and buying from a third-party plant through open access. Each carries different charges and tests.

The four routes side by side

The legal sources are short. Section 9 of the Electricity Act, 2003 lets a person build a captive generating plant and gives the owner the right to open access to carry power to the destination of use, subject to available transmission. Section 42 of the same Act provides that the cross-subsidy surcharge is not leviable when open access is provided to a person with a captive plant for carrying electricity to the destination of its own use. The Act is available on the Central Electricity Regulatory Commission's website.

What the captive tests actually require

The Ministry of Power states the test plainly: under Rule 3 of the Electricity Rules, 2005, a plant qualifies as captive if its users collectively own at least 26% of it and consume at least 51% of the electricity it generates annually. For a plant owned by an association of persons, each user must consume in proportion to its ownership share, with a permissible variation of 10%. The statement is in the Ministry's reply in Parliament of 20 March 2025.

The consequences are practical. Consumption is tested over the year, so a plant that serves a consumer whose load falls, or whose partners' loads change, can slip below the proportion. Equity brings capital and exposure to the plant's performance. Failing a test can bring the surcharge back. Treat group captive as a structure for a legal adviser to settle, using engineering and load data from the plant side.

What third-party open access offers

Under the Green Energy Open Access Rules, 2022, notified on 6 June 2022, the open-access threshold for green energy fell from 1 MW to 100 kW, approval is to be granted in 15 days or deemed granted, and the charges are transmission, wheeling, cross-subsidy surcharge and standby charges, with a cap on any increase in the surcharge and the removal of additional surcharge, according to the Ministry of Power's release. Your state commission's orders still set the actual charges, banking rules and losses, and they change. We do not quote a landed rate here for that reason.

You pay a tariff to the developer and carry no capital or plant risk, but you sign a long contract with termination and take-or-pay terms. Our open access solar page sets out the charge stack.

Decision rules for a 1 MW+ consumer

1. Fill the roof first. About a lakh square feet of shadow-free roof carries 1 MW. Units generated behind the meter avoid the whole open-access charge stack, so use the roof capacity you have before contracting for more.
2. Check the net-metering cap. The central rules raised the net-metering limit to 500 kW in 2021, and the state sets the detail, so a megawatt on the roof may need a captive or gross-metering arrangement. Ask your DISCOM.
3. Size off-site supply to genuine daytime demand. Whatever the roof cannot serve is the balance for off-site supply. Do not contract for units you cannot consume in the banking window.
4. Decide whether you want equity. Captive and group captive need 26% ownership and an annual consumption test. If your capital and appetite for plant risk are limited, third-party supply avoids both, at the price of the surcharge.
5. Model the charges, not the term sheet. The landed cost is the PPA rate plus wheeling, transmission, surcharge, banking charges and losses. Run it at today's state orders and at higher charges.
6. Read the contract exits. Tenor, escalation, termination and the counterparty's strength matter as much as the tariff.

None of these rules favours one route in general. A consumer with a large roof and steady daytime load often ends up with rooftop captive plus off-site supply for the balance; a consumer with little roof and strong capital may prefer group captive; a consumer who wants no plant risk may prefer third-party supply.

Where the ALMM rules fit

As of October 2026, the Ministry of New and Renewable Energy's O.M. of 4 August 2026 exempts net-metering and open-access renewable projects from ALMM List-II for solar cells if commissioned by 31 December 2026, while List-I for modules still applies. It also states that neither list applies to behind-the-meter plants used solely for captive consumption by a consumer other than a government entity or public sector enterprise. So an on-site captive plant and an off-site one can face different module and cell rules. See the O.M. and our glossary entry on ALMM.

Mistakes buyers make when comparing

Three errors recur. The first is comparing a rooftop cost per unit with an off-site landed rate that leaves out losses and banking charges, which flatters the off-site case. The second is sizing off-site capacity to annual consumption and not to daytime consumption, so units are generated when the plant cannot absorb them. The third is treating group captive as a purchase when it is a shareholding: the partners' behaviour, their loads and their exits become your problem. Ask for the comparison on a delivered cost per unit basis over ten years, with the off-site case stress-tested for higher charges and tighter banking.

How Secured Engineers helps

We build on-site rooftop and ground-mount plants as an EPC contractor, so we compare the on-site case against off-site supply on your bills and recommend whichever the numbers support. Design is in-house, and CEIG and DISCOM net-metering filings are done in-house. MEPF and solar can sit under one contract. We work from offices in Noida (Delhi NCR) and Ludhiana, with 535+ projects across 18+ states and 89.77% repeat clients. Legal structuring of a group captive arrangement stays with your legal and finance advisers.

Send us twelve months of bills and your sanctioned load for a comparison. See our open access solar evaluation, message us on WhatsApp, call +91 70099 85817, or ask for a free proposal.