An SME can own a solar power plant. Not host one, not buy discounted power from one: own it, the way you own your factory. This guide covers the decision end to end: what ownership is worth, what it costs, the three legal routes to it, and the eight steps from your electricity bill to a running plant.
Why own instead of taking the discount
The default offer to an SME is a PPA: a developer builds and owns the plant, you commit to buy its power for 15 to 25 years, and your tariff drops by a rupee or two per unit. Ownership is the other path, and its benefits are concrete:
- You keep the whole spread. Karnataka industrial consumers typically pay in the region of ₹7 to ₹9 per unit once all charges land. A well-sited plant you own generates at a cost well below half of that over its life. Under a PPA the developer keeps most of that gap; under ownership it is yours.
- Depreciation against your business income. Solar assets qualify for accelerated depreciation under the Income Tax Act, which pulls tax benefits into the early years for a profitable business. A PPA gives you none of this.
- A hedge against 25 years of tariff increases. Grid tariffs in Karnataka have risen steadily and will continue to. Owned generation locks your marginal cost of power for the plant’s life; a discount off a rising tariff still rises.
- An asset, not a contract. At the end of a PPA you have receipts. At the end of ownership you have a plant on land you own, both with residual value.
The trade is capital and responsibility: you fund the plant (mostly with debt), and construction and operations are your problems to delegate. For businesses with unstable load or short horizons, the discount is the right answer. For a stable manufacturer planning a decade ahead, the arithmetic usually favours owning.
What it costs, in round numbers
For a ground-mount captive plant in Karnataka, three cost blocks matter. Figures below are indicative ranges to size the decision, not a quote:
- The plant. EPC cost for utility-style ground mount currently runs in the region of ₹3.5 to ₹4.5 crore per MW, moving with module prices.
- The land. 4 to 5 acres per MW, priced by district and by how close a live substation is. In Karnataka the developer also bears evacuation infrastructure costs, so distance to the substation is a direct cost line.
- The recurring stack.O&M (a small percentage of capex annually) plus open access charges if the plant is remote from your factory.
Output side: 1 MW in Karnataka’s solar belt generates roughly 16 to 18 lakh units a year. Value each unit at your real blended tariff net of the charges that apply to your structure, and you have the honest skeleton of the payback calculation. We publish no payback number because it turns entirely on four inputs only you have: your tariff, your load shape, your financing cost and your structure. Run it with those, not with a brochure figure.
The three routes to ownership
- Behind the meter. The plant sits at your factory and feeds your load directly. Simplest legally, no open access charges, but limited by the land and roof you have. Most SMEs run out of space long before they run out of load.
- Remote captive via open access. The plant sits on cheap, sunny land upstate; the grid wheels the power to your factory. Eligibility starts at just 100 kW under the Green Energy Open Access Rules, 2022. You pay wheeling, transmission and banking charges, but genuine captive status exempts you from the two biggest surcharges.
- Group captive. Several consumers share one plant: together they hold at least 26% of its equity and consume at least 51% of its power, which preserves the captive exemptions. The right route when your load alone does not justify a full plant; we covered the structure in detail here.
The process, in eight steps
- Establish your baseline (week 1). Twelve months of electricity bills. Extract the real blended tariff, demand charges, time-of-day pattern and annual units. Every later decision keys off this.
- Size the plant (weeks 1 to 2). Match capacity to the consumption you can reliably absorb; captive economics reward plants your load can actually use.
- Choose the route (weeks 2 to 4). Behind the meter if you have the space; remote captive if you have the load; group captive if you have neither alone.
- Secure the land (the critical path). For remote captive at ~5 MW: 20 to 25 contiguous acres, clean title, conversion position settled, and an operational substation with evacuation headroom. From scratch this takes 12 to 18 months; on a pre-diligenced parcel it takes weeks. Nothing else on this list is as slow or as irreversible.
- Apply for connectivity and open access.Grid connection and evacuation approval with KPTCL/ESCOM, open access permission under the state’s green energy process, metering and banking arrangements.
- Contract the EPC. Fixed-price EPC with performance guarantees. A competitive market; get three bids against one specification.
- Close the financing. Term debt against the business or the SPV, sized so the equity cheque is comfortable. Banks know this asset class now; the dossier on your land will be the slowest document they wait for.
- Build, commission, operate. Construction on ready land runs a few months for SME-scale plants. After commissioning, the discipline is monthly: generation monitoring and reconciliation of injected against consumed units.
The risks, briefly and honestly
- Open access charges are revised by regulators; model conservatively.
- Curtailment risk is bought with the land: a congested substation cannot be fixed later.
- Execution risk concentrates in the land records, not the equipment.
- Ownership suits confident decade-plus load; if your facility may move, prefer group captive.
Where to start
Steps 1 to 3 cost you a spreadsheet and a fortnight. Step 4 is where projects stall, and it is the step Ekrej exists to remove: parcels already acquired, diligenced, conversion-cleared and evacuation-approved, with the full dossier open for your review. Land you can put a captive plant on within days of closing, not months of curing records.
Costs, tariffs and charges are indicative as of July 2026 and vary by case; regulations change. This article is general information, not financial, tax or legal advice. Evaluate your specific case with your advisors.