India’s green energy open access sector has witnessed steady growth over the past few years, with an increasing number of commercial and industrial (C&I) consumers switching to clean energy. The open access model is a compelling choice for these consumers seeking to meet their clean energy mandates and lower their power bills.

India’s solar capacity additions under open access have also experienced an uptick.

The country added 6.9 GW of solar open access capacity in 2024, a 77% year-over-year (YoY) increase from 3.9 GW, according to Mercom India Q4 & Annual 2024 India Solar Open Access Market Report. Installations under the open access model comprised 31.3% of the large-scale solar capacity additions in 2024, and 76.5% of these installations were standalone solar.

Gautam Mohanka, Chief Executive Officer of Gautam Solar, said, “The Indian solar open access market is seeing enormous growth with increasing installations every quarter. The growth can be attributed to the series of falling system costs, together with supportive policies and potential energy savings.”

Key Offtakers Under Solar Open Access

Industries with high emissions and significant power consumption are increasingly turning to clean energy.

“Industries such as iron and steel, cement, petrochemicals, chemicals, and metals are driving demand for open access solar to optimize costs and meet sustainability goals, primarily through group captive and open access models,” said Manish Kumar, Chief Marketing Officer, Jakson Distributed Energy.

In 2024, the steel industry was the leading offtaker of open access with a share of 33.2%, followed by data centers (13.6%), cement (12.4%), mining (11.9%), and the chemical industry (10%). Other industries, including fast-moving consumer goods (FMCG), automobile, and dairy, constituted 19% of the total offtakers, according to Mercom India Research.

The IT and data center industry is also emerging as a key adopter, leveraging solar-plus-storage for reliable and clean energy and to achieve net-zero targets.

According to Kumar, the textile sector benefits from 20% to 30% savings on electricity costs.

Mohanka explained that this shift to clean energy is driven by domestic requirements and international policy initiatives, such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which mandates environmental sustainability practices.

“As a result, Indian exporters have to conform to these regulations by giving detailed accounting of their carbon footprint,” he said.

Kuldeep Jain, Founder and Managing Director of CleanMax, pointed out that data centers, in particular, are rapidly adopting clean energy in their operations. “Several reports forecast a considerable rise in the data center electricity consumption by 2030, driven by advancements in AI and other cutting-edge technologies.”

In an exclusive interview with Mercom India, Manoj Kumar Singh, Director General of the Digital Infrastructure Providers Association, noted that solar energy was the preferred renewable energy source for the telecom industry. The telecom sector alone is set to install about 1,250 MW of solar capacity, considering that 70% of electricity consumption from various distribution licensees is to be substituted with solar group captive projects.

State-wise, Maharashtra, Rajasthan, Karnataka, Gujarat, and Uttar Pradesh led solar open access installations in 2024, contributing 72% of the total. Among the leading states, Maharashtra saw an 86% increase, Rajasthan a 291% growth, and Karnataka a 6% rise from the previous year.

“Solar adoption rates vary significantly across Indian states due to differences in policies, costs, and industrial activity. Karnataka, Maharashtra, and Tamil Nadu are favorable states, driven by progressive regulations, lower cross-subsidy surcharges, and high industrial activity,” said Mohanka.

Issues hampering further growth

While India’s solar installations under open access have increased substantially, developers highlighted a few issues faced by offtakers.

Mohanka highlighted the initial high investment costs of acquiring solar panels, inverters, and other necessary facilities, which many businesses view as a significant financial barrier.

“Many industries, especially small and medium enterprises (SMEs), struggle with initial investment, while delays in approvals from distribution companies (DISCOMs) further slow down project implementation,” said Kumar.

Developers also highlighted the need for a reliable energy storage system with solar power under open access.

“It is also necessary to have a good storage system because, in solar energy generation, the input can hardly be sustained all through due to intermittency. There is also the issue of land space, which proves difficult for many businesses that do not have large facilities. Long-term reliability of the system requires maintenance and skills,” said Mohanka.

However, recent policy changes and incentives have significantly influenced businesses’ decisions to adopt solar open access.

“Key reforms like the waiver of transmission charges for solar open access projects and the Green Energy Open Access Rules, 2022, have streamlined approval processes and reduced costs, making solar more attractive. State-level incentives, such as reduced cross-subsidy surcharges in states like Rajasthan and Maharashtra, have further encouraged businesses to transition to solar,” said Kumar. The impact of these favorable policies is evident in the sector’s rapid growth.

Developers also highlighted that the lack of synchronization between state and central policies and regulations increased project execution timelines. They stated that different interpretations of green energy open access rules related to maximum energy banking percentages and cycles, as well as scheduling for energy accounting, are creating uncertainties.

While captive models remain dominant, group captive adoption is on the rise, offering a cost-effective and scalable solution for industries transitioning to solar. Developers highlighted that most C&I customers opt for the group captive model to procure solar energy.

“This is due to the cost advantages involved, enabling the consumer to save 30% to 50% in energy costs when going for green energy. Group captive open access power procurement has been the most attractive option for large power consumers willing to deploy renewable energy in their operations and save costs,” emphasized Mohanka.

This model is particularly attractive for SMEs and energy-intensive industries like iron & steel, cement, and petrochemicals seeking long-term savings without heavy upfront investments, said Kumar.

India’s rapid growth in solar open access, marked by a 77% increase in 2024, underscores its substantial potential to help achieve the nation’s target of 500 GW of non-fossil fuel capacity by 2030. However, enhanced policy support is crucial to fully realize the advantages of open access. Simplified DISCOM approvals, increased incentives, and improved storage are necessary to address existing challenges.