Executive Summary
A steel plant in Bihar was consuming around 7.5 Crore units a year at ₹6.25 a unit, after the grid subsidy: an electricity bill close to ₹47 Crore. Few developers could tell the CFO whether Bihar could save more than ₹2 a unit. Decoding the Open Access charge stack line by line showed a ₹3.85 busbar Solar PPA landing at ₹4.00 a unit at the plant: ₹2.25 a unit below the grid, ₹13.95 Crore of Year-1 savings on ₹17.0 Crore of equity, and the equity back in 14.7 months.
The Mandate: Cost Pressure and Revenue Pressure
For a steel plant, power is not an overhead line. It is a raw material, and its price sits inside the cost of every tonne shipped.
The Board gave the CFO three conditions, and all three had to hold at once:
- Answer investor pressure on renewable energy.
- Save more than ₹2 a unit, to cut raw-material cost and stay competitive.
- Export steel to the European Union, where green steel earns a premium.
At around 7.5 Crore units a year on a 17 MVA contract demand, the bill was close to ₹47 Crore. This was not only cost pressure. It was revenue pressure.
The Illusion: “Bihar Cannot Deliver”
The CFO put one question to the market: can Bihar actually deliver savings of more than ₹2 a unit?
The market in the state is small, and few developers could answer. Bihar was treated as unmapped: a market without enough precedent to model. That word does a lot of work. It is not a calculation. It is the absence of one.
The Reality Check: Four Questions Before the Board
The CFO knew that when he presented to the Board, he had to answer four precise questions:
- The landed tariff: what can the plant expect to pay per unit in Bihar?
- The busbar tariff: what does the Solar PPA cost at injection?
- The Open Access charges: which charges apply, and which do not?
- Savings, return and payback: how much does the plant save, how much equity goes in, and when does it come back?
The Forensic Audit: From Injection to Plant
The quoted tariff is the price at the point of injection. What matters to a CFO is the price at the meter, after every charge and loss the state applies.
| Line | Figure | What it is |
|---|---|---|
| Grid tariff | ₹6.25 / unit | What the plant was paying, after the grid subsidy |
| Solar PPA, busbar | ₹3.85 / unit | The tariff at injection |
| SLDC fee | ₹0.01 / unit | The only charge Bihar does not waive |
| Wheeling loss in kind (3.36%) | ₹0.14 / unit | Energy lost in transit |
| Landed tariff | ₹4.00 / unit | At the plant |
| Saving per unit | ₹2.25 / unit | On 90.7% of the load replaced |
| Year-1 savings | ₹13.95 Crore | Net, in the first year |
| Group Captive equity | ₹17.0 Crore | The consumer's equity stake |
| Equity payback | 14.7 months | The decision number |
The whole argument sits between ₹3.85 and ₹4.00. Bihar waives transmission charges, wheeling charges, cross-subsidy surcharge and additional surcharge for Open Access. What remains is a ₹0.01 SLDC fee and a 3.36% wheeling loss in kind. That is a fact about the state's rulebook, not about a developer's optimism, and it is exactly what “unmapped” had hidden.
The Verdict: The Board Approved
The CFO took this to the Board. The Board saw ₹2.25 a unit of savings and approved the proposal: not because solar was virtuous, but because the landed number cleared the ₹2 mandate, and the equity came back in 14.7 months.
Next Steps for the Boardroom
The same four questions work for any state, not only Bihar. Before accepting that a state cannot deliver, decode the complete charge stack line by line:
- Ask for the landed tariff, never the busbar tariff, on every proposal.
- Ask which charges apply to your structure. Group Captive, third party and captive are not charged alike.
- Re-run the comparison at the moment of signing. Waivers, surcharges and duty change.
- Treat “unmapped” as a question nobody has asked yet, not as an answer.
Frequently Asked Questions
Can Open Access Solar deliver more than ₹2 per unit of savings in Bihar?
In this case, yes. Against a grid tariff of ₹6.25 a unit, a ₹3.85 busbar Solar PPA landed at ₹4.00 a unit at the plant under a Group Captive structure: a saving of ₹2.25 a unit. The figure depends on the charges that apply to your structure and must be re-run at the time of signing.
What is the difference between a busbar tariff and a landed tariff?
The busbar tariff is the price at the point of injection into the grid. The landed tariff is what the consumer pays at the plant after wheeling charges, losses and applicable levies. In this Bihar case, a ₹0.01 SLDC fee and a 3.36% wheeling loss in kind (₹0.14) took ₹3.85 at the busbar to ₹4.00 landed.
Why did Open Access charges add so little in Bihar?
Because Bihar waives transmission charges, wheeling charges, cross-subsidy surcharge and additional surcharge for Open Access. What remains is a ₹0.01 SLDC fee and the 3.36% wheeling loss in kind. Other states charge what Bihar waives, so the same busbar tariff lands higher elsewhere.
How much equity does a Group Captive solar project require?
In this case ₹17.0 Crore, against Year-1 savings of ₹13.95 Crore, with the equity back in 14.7 months. Group Captive requires the consumer to hold a qualifying equity stake, so the figure scales with plant size.
What does it mean when a state is called unmapped?
It usually means there is limited local precedent to model from, not that the economics fail. It is the absence of a calculation rather than the result of one.
Sources
- Gaurav Kawatra, LinkedIn post, 17 September 2026. www.linkedin.com
- Infinia Solar, "Bihar Open Access Solar" (video), YouTube, 17 September 2026. www.youtube.com
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