Solar for a Leased Factory: Who Owns the Plant, Who Signs With the DISCOM, What Goes in the Lease

On a leased factory the DISCOM deals only with its consumer, so the plant belongs on the connection of whoever holds the account and has legal possession of the roof. That is usually the tenant, with the landlord's written consent. Fix who owns the plant, how long the lease runs against payback, and what happens at exit, in writing, before design starts.

Who holds the DISCOM connection decides who can claim the credits

A net-metered plant is tied to one consumer connection. The generation offsets that consumer's imports, and the surplus is credited to that account. If the connection is in the tenant's name, the tenant is the consumer and applies. If the connection is in the landlord's name and the tenant pays through a sub-meter, the landlord is the consumer, and the tenant benefits only through the landlord's own arrangement.

The regulations we read say the same about the roof. Maharashtra's 2019 regulation requires the eligible consumer to own or be in legal possession of the premises, including the rooftop, and to consume the electricity there. Gujarat's 2016 net-metering regulation says the consumer shall own a plant set up on its own premises or premises in its legal possession, and asks for documents of legal possession or a co-owner's no-objection. A lease with no clause on roof rights is the usual gap.

Which ownership structures can work?

• Tenant owns the plant. The tenant pays, claims the saving and carries the exit risk. It suits a long lease or a tenant that can move the plant. Our capex versus opex calculator compares it with the alternatives.
• Landlord owns the plant. The landlord is the DISCOM consumer or arranges a separate connection. The tenant's saving flows through a rent or power-charge arrangement. It suits a landlord with several tenants, and it needs a clear metering and billing mechanism.
• Third party owns the plant. Punjab's regulation allows systems that are self-owned or third-party-owned and defines a service company that owns a renewable system and provides renewable energy to the consumer. Maharashtra's allows a system owned or operated by the consumer, by the licensee or by a third party leasing it to the consumer. Madhya Pradesh provides for a system leased by a service company, and says third-party sale of power is not allowed under net metering other than between a parent consumer and its participating connections. So the contract wording matters: a lease of a system is not the same thing as a per-unit sale of power.

Whichever you choose, ask the DISCOM, in writing, which structure it accepts for your category in your state, because the regulations differ and are amended.

Does the lease run long enough?

Payback is capital cost divided by the yearly saving, and the saving arrives over years. Our published C&I band is ₹24,000–32,000 per kW excluding GST, and the solar payback calculator turns your bill into a payback figure. Then lay the number against the lease.

• Remaining lease shorter than payback: do not buy the plant outright unless the lease is extended in writing, or the landlord agrees a buy-back. A third-party-owned structure is the other route.
• Remaining lease about equal to payback: any benefit is marginal and renewal risk decides it. Get the renewal option first.
• Remaining lease comfortably longer than payback: ownership is workable, provided the roof will last. Check the sheeting life and strength with the roof load calculator and a structural survey.

What should go into the lease?

Treat the lease amendment as part of the project, not as an afterthought. Your lawyer should draft it; the table lists the clauses to ask for and what each prevents.

What if several tenants share a roof?

A multi-tenant factory complex with one large roof and several connections is the case where one tenant's connection cannot use all the output. Some state regulations provide for group or virtual net metering, where one plant's output is adjusted across more than one connection of the same consumer or a set of consumers. Madhya Pradesh's 2024 regulation, for example, defines both and allows them below 100 kW capacity within the same licensee's area, with wheeling charges and losses applying on the participating connections. Check whether your state has an equivalent before you plan shared generation, and take care that a landlord reselling power to tenants does not breach the rules on third-party sale.

What happens at exit?

Decide it at the start. If the tenant removes the plant, the lease must give time for the work, require the roof to be made good, and say who pays for the DISCOM's meter and disconnection. If the landlord buys it, set the valuation formula now, for example depreciated cost, rather than a figure to be agreed later. Also settle what happens to the connection, because the consumer name on the account determines who can export, and a change of name or load takes time at the DISCOM.

How Secured Engineers helps

We design solar in-house and file the DISCOM net-metering application, and where required the CEIG file, in-house, so the paperwork is built around the connection holder's name from the first drawing. 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. We are not lawyers, so the lease wording stays with yours; we supply the technical schedule and the roof and load facts the clauses depend on.

If you tell us who holds the connection, how much of the lease remains and what the roof is made of, we will say which structure fits and how much plant the connection allows. See our solar for factories page and the solar calculator, message us on WhatsApp, call +91 70099 85817, or ask for a free proposal.