Why Solar Makes Sense for Commercial & Industrial (C&I) Sectors
For any business, electricity is one of the top major operating expenses. In most Indian states, commercial and industrial grid tariffs have skyrocketed to ₹10-14 per unit in 2026. Solar power, which costs roughly ₹2-3 per unit (levelized cost over 25 years), offers an unbeatable arbitrage opportunity.
Switching to solar is not just about "going green" or ESG compliance; it is a hard-nosed financial decision that directly improves your bottom line (EBITDA) and cash flow.
The "Accelerated Depreciation" Advantage
While residential users enjoy upfront subsidies, commercial entities enjoy "Accelerated Depreciation" (AD)—a powerful tax benefit regulated under Section 32 of the Income Tax Act.
How it works:
Businesses are allowed to depreciate 40% of the book value of their solar asset in the very first year.
Example Calculation:
Suppose you install a 100 kW solar plant costing ₹ 40 Lakhs.
- Depreciation (Year 1): 40% of ₹ 40 Lakhs = ₹ 16,00,000
- This ₹ 16 Lakhs is deducted from your taxable profit.
- If your corporate tax rate is 25% (plus cess), you save approx ₹ 4,00,000 in taxes in Year 1 itself.
- Effectively, your project cost comes down to ₹ 36 Lakhs immediately.
Solar Financing Models: CAPEX vs. OPEX
Businesses have two main ways to adopt solar:
1. CAPEX Model (Capital Expenditure)
You own the system. You pay 100% of the cost upfront (or take a loan). You get all the tax benefits (AD) and all the electricity savings. This yields the maximum ROI (25-30%) and shortest payback (3-4 years).
2. OPEX / RESCO Model (Zero Investment)
A third-party Renewable Energy Service Company (RESCO) invests, installs, and maintains the plant on your roof. You sign a Power Purchase Agreement (PPA) to buy power from them at a rate cheaper than the grid (e.g., ₹5/unit fixed) for 15-25 years. This assumes zero risk but offers lower savings compared to CAPEX.
Industry-Specific Use Cases
Textile & Manufacturing
Industries with high daytime loads are perfect candidates. Solar generation curve perfectly matches the 9 AM to 5 PM shift operations, minimizing the need for expensive battery storage or net metering dependence.
Hospitals & Cold Storages
These operate 24x7. While solar covers the daytime load, it significantly reduces the reliance on diesel generators (DG sets) during power cuts, as solar + grid sync inverters can prioritize solar power.
Schools & Educational Institutions
Schools have large, shadow-free rooftops and operate primarily during the day. This is an ideal match. Furthermore, installing solar serves as a live educational lab for students.
Frequently Asked Questions
1. Is Net Metering applicable for commercial buildings?
Yes, but there are caps. Most states limit net metering to 1 MW (or 500 kW). For larger capacities, "Net Billing" or "Gross Metering" applies, where the DISCOM buys excess power at a lower rate. It is crucial to size your system such that you self-consume most of the power generated.
2. Can we get a loan for solar projects?
Absolutely. Almost all major banks (SBI, HDFC, SIDBI) have dedicated "Green Term Loans" for solar projects at competitive interest rates. Since the asset generates guaranteed savings, it is considered a safe lending bet.
3. Why don't commercial users get the PM Surya Ghar subsidy?
The PM Surya Ghar subsidy is specifically targeted at residential households to encourage mass adoption. The government believes commercial entities have enough incentive through tax breaks (AD) and electricity savings, making direct capital subsidy unnecessary.
Conclusion
If your business has an idle rooftop and a high electricity bill, NOT going solar is a financial leak. With a payback period of under 4 years and an asset life of 25 years, a solar power plant is likely the most profitable machine in your factory.