Group captive is a way of buying open access solar where you become a part-owner of the plant. Under the Electricity Rules 2005, a group of consumers that owns at least 26% of a plant and uses at least 51% of its output is treated as captive.
Why businesses choose it
Captive and group captive users are exempt from the cross-subsidy surcharge and the additional surcharge under Section 42(2) of the Electricity Act 2003. Those are usually the two largest fees on open access power, so group captive typically lands ₹1.50 to ₹2.00 a unit cheaper than buying the same power through a third-party PPA.
How it is set up
- The developer creates a special purpose company (SPV) that owns the plant.
- You buy at least 26% of the SPV’s equity, often together with other buyers.
- You sign a PPA for your share of the output and must consume at least 51% of the plant’s power across the group.
- The developer runs the plant and keeps the rest of the equity.
Example
Three factories share a 20 MW plant. Together they hold 26% of the SPV and take 100% of its power. Each pays a PPA price, but none pays the ₹0.60 cross-subsidy surcharge or ₹0.40 additional surcharge in Karnataka, saving about ₹1 on every unit.
The trade-off
You have to put in capital for the 26% stake and keep using enough power every year to stay above 51%. If your load drops, you can lose captive status for that year and pay the surcharges after all.
Related: third-party PPA, cross-subsidy surcharge.
Sources
Figures last checked on 26 September 2026.