Executive Summary
A chemical company in North India was buying 28.7 Crore units a year from the DISCOM, a bill of close to ₹220 Crore. Two proposals reached the CFO: Solar + BESS at ₹3.77 a unit and a Wind-Solar Hybrid + BESS at ₹4.01. Solar looked cheaper and needed less equity. The full study showed the opposite: the hybrid replaced 75.9% of consumption against 47.6%, landed at ₹4.59 a unit against ₹4.83, and produced an XNPV of ₹301 Crore against ₹153 Crore. The Board approved the option that needed more equity.
The Mandate: Maximum Green, Maximum Return
The Board was technology-agnostic. It wanted green units, and it gave the CFO three conditions:
- Savings of more than ₹2 a unit.
- Maximum Renewable Energy replacement.
- Maximum IRR.
After six months of due diligence with Solar and Wind developers, two options were on the table:
| Option | Configuration | Tariff | Equity |
|---|---|---|---|
| A · Solar + BESS | 75 MW Solar + 112.6 MWh BESS | ₹3.77 / unit | ₹43.9 Crore |
| B · Wind-Solar Hybrid + BESS | 50 MW Wind + 50 MW Solar + 93.7 MWh BESS | ₹4.01 / unit | ₹65.7 Crore |
The Illusion: The Lower Tariff and the Smaller Cheque
On the face of it, Option A had already won: a lower tariff, and ₹43.9 Crore of equity against ₹65.7 Crore for the hybrid. That is the easiest recommendation in any boardroom.
But a busbar tariff is the price at the point of injection. It says nothing about how many units the plant can actually replace, or what the plant pays once Open Access charges are added. Before taking either option to the Board, the CFO asked for an advisory opinion.
The Reality Check: The LENS Framework
We decoded the decision with four checks, in order:
- Load profile: how much of the plant's consumption does each option actually replace?
- Effective landed cost: what does each tariff become once Open Access charges are added?
- Net returns: does the larger equity cheque come back faster or slower?
- Strategic lifetime value: which option creates more value over 25 years, not just in year one?
The Forensic Audit: The Same Load, Two Technologies
Same load, same Group Captive structure. Only the technology differs:
| Line | Solar + BESS | Wind-Solar Hybrid + BESS |
|---|---|---|
| Load replaced | 47.6% | 75.9% |
| Busbar tariff | ₹3.77 / unit | ₹4.01 / unit |
| Landed tariff | ₹4.83 / unit | ₹4.59 / unit |
| Saving per unit | ₹2.78 | ₹3.12 |
| Equity | ₹43.9 Crore | ₹65.7 Crore |
| Net Year-1 savings | about ₹32 Crore | about ₹61 Crore |
| Equity payback | 16.6 months | 13.0 months |
| Equity XIRR | 68.40% | 84.45% |
| Equity XNPV @15% | ₹153 Crore | ₹301 Crore |
Three things decided it. Replacement: wind generates when the sun has set and peaks in the monsoon when Solar dips, so the hybrid replaced 75.9% of the load against 47.6%. Landed cost: the higher tariff landed lower, at ₹4.59 against ₹4.83, because transmission charges are calculated on a per-MW-per-annum basis. Return: the larger cheque came back sooner, in about 13 months against 16.6.
The Verdict: ₹148 Crore Not Left on the Table
The CFO took the analysis to the Board. The Board made the higher equity investment and captured the higher NPV: ₹301 Crore against ₹153 Crore, a gap of ₹148 Crore that choosing the cheaper tariff would have given up.
The lower tariff did not win. The higher lifetime value did.
Next Steps for the Boardroom
Before approving the cheaper tariff on any renewable energy proposal:
- Model the replacement percentage against your own load curve, not the developer's generation estimate.
- Compare the landed tariff after Open Access charges, never the busbar tariff alone.
- Compare payback and XNPV on the equity, not the size of the equity cheque.
- Run all four LENS checks before the proposal reaches the Board.
Frequently Asked Questions
Is a Wind-Solar Hybrid PPA cheaper than a Solar PPA?
Not on the busbar tariff, and that is the trap. In this case Solar + BESS was quoted at ₹3.77 a unit and the Wind-Solar Hybrid + BESS at ₹4.01. After Open Access charges, the hybrid landed at ₹4.59 a unit against ₹4.83 for Solar, because transmission charges are calculated on a per-MW-per-annum basis.
Why does a Wind-Solar Hybrid replace more grid power than Solar?
Wind generates when Solar cannot, at night and during the monsoon. In this case the hybrid replaced 75.9% of the plant's consumption against 47.6% for Solar + BESS, from the same 28.7 Crore units a year of demand.
Is it worth putting more equity into a Wind-Solar Hybrid?
In this case, yes. The hybrid needed ₹65.7 Crore of equity against ₹43.9 Crore for Solar, but paid back in about 13 months against 16.6, returned an equity XIRR of 84.45% against 68.4%, and produced an XNPV of ₹301 Crore against ₹153 Crore.
What is the right metric to compare two renewable energy proposals?
Lifetime value, not the per-unit tariff. The busbar tariff ignores how many units each option replaces and what the Open Access charges add. Compare landed tariff, replacement percentage, payback and NPV over the full 25-year term.
What is the LENS framework?
Four checks before a Board decision: Load profile (how much consumption each option replaces), Effective landed cost (the tariff after Open Access charges), Net returns (payback and IRR on the equity), and Strategic lifetime value (NPV over 25 years).
Sources
- Gaurav Kawatra, LinkedIn post, 10 September 2026. www.linkedin.com
- Infinia Solar, "Why ₹4.01 Wind-Solar Beat ₹3.77 Solar" (video), YouTube, 14 September 2026. www.youtube.com
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