Industrial units that invested in open access captive solar power plants to cut electricity costs and transition to cleaner energy are facing mounting financial stress, with electricity distribution companies (discoms) allegedly curtailing a significant share of the power generated. Industry representatives say this has stretched projected payback periods from about six years to 10 years or more, undermining the economics of renewable energy investments.They liken the situation to setting up a Rs 5 crore manufacturing plant after securing a buyer for the entire output, only to have the buyer later refuse to purchase a large part of the production.Companies invested based on the assumption that all the electricity generated would be consumed or adjusted against their power bills. Representatives claim discoms are now declining to accept a substantial portion of the power during specific time blocks.Owners of 1 MW captive solar plants report curtailment by 20% to 50%. In some cases, it is even higher. The backing down is most frequent during peak solar generation hours in summer, though industries say curtailment of around 20% continues even during monsoon. The uncertainty has forced companies to revisit financial projections, debt servicing plans and manufacturing cost calculations.“Earlier, banking time was reduced, and now curtailment is making renewable energy even less attractive,” said textile industrialist Satish Savani, adding that industries which invested in solar to reduce power costs are now questioning the viability of fresh investments.Industry associations say the problem has become widespread. “Curtailment is creating negative sentiment around solar power, which until recently was the most sought-after renewable energy option,” said Rakesh Trivedi, founder secretary of the South Gujarat Solar Association.He said longer payback periods are forcing companies to rework financing plans and are affecting the long-term competitiveness of power-intensive sectors such as textiles and manufacturing.According to the Gujarat Federation of Solar Industries (GFSI), thermal power continues to enjoy fixed-cost recovery through a three-part tariff structure covering capital, operating and fuel costs. Renewable energy producers, however, receive no such protection when generation is curtailed despite their plants being available to supply power.A Gujarat Chamber of Commerce and Industry) office-bearer said that while renewable energy projects are typically planned around returns of about 14%, frequent curtailments significantly lower actual returns and affect project bankability.Power sector consultants say the problem is most acute during April, May and June, when solar generation peaks. “Several of our clients in Rajkot and Jamnagar were asked to stop solar generation more than 100 times during these months,” one consultant said. Similar complaints have emerged from Saurashtra and Kutch, where captive solar plant owners say they are routinely asked to halt generation for a few hours every day.“With discoms frequently refusing to accept solar power, returns on captive projects have slowed considerably,” said Pranav Doshi, senior vice-president of Federation of Gujarat Industries (FGI). The federation has prepared a representation, which it plans to submit to the Gujarat Electricity Regulatory Commission (GERC) by July 20.Textile units’ six-year payback stretches into uncertaintyWhen textile industrialist Satish Savani installed two 1 MW captive solar power plants, the investment was based on a simple calculation — recover the cost in six years through lower electricity bills. But frequent curtailment has upset those projections. Savani says discoms have been asking him to back down on generation by as much as 60% during specific time slots, mostly when solar output peaks in summer. “The economics of the project have changed completely. How can we recover the investment or bring down manufacturing costs if we are not allowed to use the power we generate?” he asked.Green investment loses shine as renewable output is curtailedA leading denim manufacturer commissioned 22 MW of renewable energy capacity — 15 MW of solar and 7.8 MW of wind — to reduce energy costs and emissions. The company is now grappling with frequent curtailment. Director Vinod Mittal says at least 15% of the renewable power generated is being lost, delaying project payback. He also points to operational constraints that require electricity to be consumed in 15-minute blocks, failing which it lapses. “Both curtailment and operational rules are hurting the financial viability of our green energy investments,” he said.Solar dream dims for salt unitsFor Vijay Jain, who runs a salt refinery near Bhachau in Kutch, captive renewable energy was meant to eliminate his electricity bill. He invested in a solar plant at Samakhiyali and a windmill to power his operations. The windmill generates only about 10% of its capacity because of poor transmission infrastructure. He says officials verbally ask him to shut his solar plant for a few hours every day during peak sunshine. The curbs have reduced solar generation to 50%-70% of capacity. “I expected my power bill to become zero. I am still paying Rs 15 lakh- Rs 20 lakh a month,” Jain said.Spinning mills badly hit Curtailment has hit the textile spinning industry hard, with cotton spinning mills reporting rising losses, longer payback periods and disruption to captive energy planning. The problem has compounded over the past 18 to 20 months, especially during high wind periods, when grid operators have imposed load curtailment of 50% to 70% on wind, solar and hybrid projects supplying captive demand. The Spinners Association (Gujarat) wrote to the state govt in April arguing that the issue is undermining investments made under the textile growth push. Mills are among the largest industrial power consumers. Many have set up wind turbines and solar plants to reduce electricity costs and manage supply risks.
Key industry demands
What the industry and dicoms have to say
With inputs from Kapil Dave & Tushar Tere
