Overview
What is Group Captive?
Group Captive is a framework under the Electricity Act 2003 that allows multiple consumers to jointly own a generating plant and share captive benefits. Designed for consumers who want captive advantages but don't have scale or capital for their own plant.
Equity Requirement
≥26% per consumer
Or aggregate 26% by all consumers
Consumption Requirement
≥51% of share
Proportionate to equity
When criteria are met, each consumer is classified as captive consumer and exempted from CSS and AS — making group captive significantly more economical than third-party while requiring fraction of capital for full captive.
The Model
How Group Captive Works
Consumer Identification
Identify compatible consumers with similar load profiles and commitment.
SPV Formation
Incorporate company with structured shareholding for captive compliance.
Equity Contribution
Consumers contribute 26%+ equity, investors provide remaining capital.
Project Development
Developer designs, constructs, and commissions the solar plant.
Open Access Approval
Apply with SLDC, register as captive, obtain scheduling approvals.
Power Wheeling
Power wheeled to consumers, each draws proportionate share.
Structure
Consumer + Investor Model
Consumer
Electricity Consumer (Captive User)
Requirements
- Minimum 26% equity in SPV
- Consume 51%+ of proportionate share
- Connected load in same state
- HT consumer with OA eligibility
What You Get
- Discounted solar power (30-50% savings)
- CSS/AS exemption
- Depreciation on equity
- I-RECs for sustainability
Investor
Co-Investor / Developer
Requirements
- Maximum 74% equity
- No obligation to consume
- Provide capital + expertise
- Patient capital (20-25 yr horizon)
What You Get
- Returns on investment (12-18% IRR)
- Share of power sale revenue
- Asset ownership
- Depreciation on equity
Value Proposition
Why Choose Group Captive?
Lower Equity Requirement
Only 26% equity from each consumer vs 100% for full captive. Remaining from investors.
26%
CSS/AS Exemption
Fully exempt from CSS and AS — the biggest OA charges that apply to third-party.
Exempt
Shared Ownership
Partner with businesses to co-own larger, more efficient plant. Economies of scale.
JV Model
High Cost Savings
30-50% savings vs grid. Slightly lower than full captive but much better than third-party.
30-50%
Depreciation Benefits
Claim 40% depreciation in Year 1 on your equity share under Income Tax Act.
40%
Green Credentials
Receive I-RECs proportionate to share for RE100, CDP, SBTi reporting.
100%
Comparison
Group Captive vs Other Models
| Feature | Group Captive | Full Captive | Third-Party |
|---|---|---|---|
| Investment | 26% equity | 100% equity | Zero |
| CSS/AS | Exempt | Exempt | Applicable |
| Savings | 30-50% | 40-60% | 15-30% |
| Depreciation | Yes (26%+) | Yes (100%) | No |
| Control | Partial | Full | None |
| Risk | Medium | Higher | Lower |
| Exit Flexibility | Moderate | Low | High |
Implementation
Project Development Process
End-to-end timeline: 6-12 months
Aggregation
4-6 weeks
Identify consumers, structure shareholding
SPV Formation
2-4 weeks
Company incorporation, agreements
Site & Permits
4-8 weeks
Land, connectivity, approvals
Financial Close
4-6 weeks
Equity, debt disbursement
EPC Execution
4-8 months
Construction, commissioning
OA & COD
2-4 weeks
Open access, commercial operation
Questions
Frequently Asked Questions
How many consumers can participate?
No upper limit, but typically 2-4 consumers. More consumers mean smaller allocations per participant to meet 26% + 51% criteria.
Can a consumer hold more than 26%?
Yes, 26% is minimum. Holding more equity increases consumption obligation proportionately.
What if consumption falls below 51%?
Consumer may lose captive status for that year and become liable for CSS/AS. Annual true-up based on actuals.
Can investor also consume power?
Yes, if investor has consumption in same state and meets 26%+51% criteria, they can be consumer-investor.
Can I exit a group captive?
Yes, through share transfer to eligible consumer/investor. Exit terms defined in shareholder agreement.
What is typical tenure?
PPA and agreements are 20-25 years, matching plant life. Early exit provisions usually included.