Your board approved ₹15 crore power budget for this year.
Next year grid tariffs increase 8%. Budget is now ₹16.2 crore.
10–25 year price protection with indicative daytime solar — so finance can model power cost with far more certainty than grid escalation alone.
Pricing note: 15-year preferred PPA, extendable up to 25 years. ₹5.0–₹5.5/kWh indicative daytime solar. Plant-side BESS (park) and on-site BESS (facility) optional. Examples below are illustrative, not binding offers.
The energy cost uncertainty problem
CFOs can't budget when costs escalate unpredictably:
Grid Tariff Reality:
- 8-10% annual increases
- Fuel surcharge volatility
- Regulatory charge additions
- Cross-subsidy adjustments
- Zero visibility beyond 12 months
Budget Impact:
- Year 1: ₹15 crore
- Year 5: ₹22 crore (47% increase)
- Year 10: ₹32 crore (113% increase)
- Year 25: ₹102 crore (580% increase)
Planning Nightmare:
- Board presentations outdated in 6 months
- Capex decisions delayed by cost uncertainty
- Margins compressed by uncontrollable costs
- Competitive pricing impossible
Long-term price protection via solar PPA
10–25 Year Price Protection Framework
Not grid pass-through volatility. Contracted solar supply with indicative tariff bands.
Solar PPA Structure (illustrative):
- Indicative daytime solar: ₹5.0–₹5.5/kWh (landed cost in your proposal)
- 15-year preferred PPA, extendable up to 25 years
- Escalation per contract if any — disclosed at signing
- Zero capex from you (typical open-access structure)
- We develop; you offtake
Financial Certainty (illustrative):
- Year 1: Indicative tariff band in contract
- Years 2–25: Protection framework vs grid pass-through on solar portion
- Final landed cost disclosed in your proposal
Far more predictable than grid-only budgeting.
Long-horizon cost comparison (illustrative)
50 MW Manufacturing Facility
Grid Power (Variable):
- Year 1: ₹15 crore @ ₹8.6/kWh
- Year 5: ₹22 crore (8% escalation)
- Year 10: ₹32 crore
- Year 25: ₹102 crore
- 25-year total: ₹1,575 crore
- Uncertainty: Extreme
Solar PPA (illustrative band):
- Year 1: ₹9.6 crore @ ~₹5.0–₹5.5/kWh indicative daytime solar
- Year 5: ₹9.6 crore (zero escalation)
- Year 10: ₹9.6 crore
- Year 25: ₹9.6 crore
- 25-year total: ₹240 crore
- Uncertainty: Zero
Savings: ₹1,335 crore over 25 years
CFO benefits beyond cost savings
Budget Certainty:
- Power budget set for 25 years
- Board presentations remain valid
- Multi-year planning possible
- No surprise cost shocks
Improved Margins:
- Fixed energy cost = predictable COGS
- Competitive pricing confidence
- Margin protection from grid escalation
- Bottom line stability
Balance Sheet Impact:
- Zero capex required
- Off-balance sheet financing
- Preserves debt capacity
- Working capital unchanged
Strategic Flexibility:
- Capex available for core business
- Growth investments prioritized
- Risk profile reduced
- Financial ratios protected
How price protection works
PPA Contract Terms (typical framework):
Tariff band:
- Indicative ₹5.0–₹5.5/kWh daytime solar at signing
- Final landed cost includes open-access charges, losses, and applicable regulatory charges
- Contracted escalation only if explicitly agreed
Volume Commitment:
- Minimum offtake specified
- Pay-as-you-use above minimum
- No capacity charges
- Predictable monthly bills
Performance Guarantee:
- 99.5% uptime SLA
- Generation guarantees
- Financial penalties if we miss
- Your operations protected
Contract Security:
- 15-year preferred term, extendable up to 25 years
- Predictable payment schedule per contract
- Bankable structures under development
Grid escalation vs protected solar tariff
Historical Grid Tariff Growth (2019-2024):
- 2019: ₹7.2/kWh
- 2020: ₹7.8/kWh (+8.3%)
- 2021: ₹8.5/kWh (+9.0%)
- 2022: ₹9.2/kWh (+8.2%)
- 2023: ₹9.9/kWh (+7.6%)
- 2024: ₹10.6/kWh (+7.1%)
- 5-year CAGR: 8.0%
Future Projections:
- Coal prices rising
- Renewable obligation costs
- Grid infrastructure investment
- Cross-subsidy pressure
- Expectation: 8-10% annual growth continues
Solar PPA Alternative (illustrative):
- Indicative daytime solar band: ₹5.0–₹5.5/kWh in year one
- Protection from grid fuel-surcharge pass-through on the solar portion
- Planning benefit: model solar slice of load with far lower escalation than grid-only scenarios
Financial planning advantages
Multi-Year Forecasting:
- 5-year business plan: Energy cost locked
- 10-year expansion model: Power budget certain
- 25-year asset life: Energy expense predictable
- Board confidence: Zero cost surprises
Competitive Positioning:
- Your competitors face 8% annual increases
- Your costs stay flat
- Margin advantage compounds
- Market share protection
Valuation Impact:
- Lower cost structure = higher EBITDA
- Predictable margins = lower risk premium
- Long-term contracts = enterprise value boost
- Exit multiples improve
Investor Confidence:
- Institutional investors value certainty
- ESG compliance demonstrated
- Cost management proven
- Financial discipline clear
Real CFO example
40 MW Chemical Plant — CFO Perspective
Problem (2023):
- Grid power: ₹12 crore/year
- 5-year forecast: ₹18 crore by 2028
- Board questioning volatility
- Competitors with lower energy costs winning bids
Decision (2024):
- Signed 25-year solar PPA @ ₹5.5/kWh
- Zero capex required
- Power budget: ₹7.7 crore/year fixed
- Savings: ₹4.3 crore year 1
Result (2024-2049):
- Annual savings: ₹4-10 crore (grows as grid escalates)
- Board presentations: Power line item unchanged
- Competitive advantage: Lower COGS than peers
- 25-year savings: ₹456 crore
CFO quote (illustrative): "We finally had a defensible 15-year power forecast for the solar slice of our load. Board could approve capex again without guessing next year's tariff shock."
PPA vs other options
Solar PPA (Fixed Rate):
- Capex: ₹0
- Annual cost: ₹9.6 crore (fixed 25 years)
- Balance sheet: Off-balance sheet
- Budget certainty: Perfect
- CFO recommendation: Best for cost certainty
Dedicated Plant (Ownership — Solar + Plant BESS):
- Capex: ₹100 crore (solar + plant-side BESS)
- Annual cost: ₹1.8 crore (O&M)
- Balance sheet: Asset + debt
- Budget certainty: Good
- Plant BESS — evening delivery, curtailment avoidance, lower rates
- Add Reliability tier for on-site backup + 99.95% uptime SLA
- CFO recommendation: Best for lowest total cost + own your infrastructure
Grid Power (Status Quo):
- Capex: ₹0
- Annual cost: ₹15 crore (escalating 8%)
- Balance sheet: Neutral
- Budget certainty: None
- CFO recommendation: Highest risk option
Contract structure details
Standard PPA Terms:
Financial:
- Indicative daytime solar: ₹5.0–₹5.5/kWh (final landed cost in proposal)
- Monthly billing cycle
- Payment terms: Net 30
- Open-access and regulatory charges disclosed
- Escalation only if explicitly contracted
Operational:
- We build, own, operate
- You buy power only
- 6-month delivery
- 99.5% uptime guaranteed
- Grid backup included
Legal:
- 25-year term
- Force majeure protections
- Dispute resolution mechanism
- Contract transfer rights
- Early termination terms
Accounting:
- Treated as operating expense
- Off-balance sheet
- No depreciation accounting
- Simple P&L impact
- Auditor-friendly structure
The budget certainty advantage
Board Presentation Confidence:
Every CFO presents power budget annually. With grid:
- "Energy costs projected ₹16.2 crore, assuming 8% escalation, subject to regulatory changes, fuel surcharges, and market conditions."
With solar PPA:
- "Energy costs: ₹9.6 crore illustrative. 15-year preferred PPA, extendable to 25. Indicative tariff band in contract."
Which presentation gets approved faster?
For CFOs managing ₹10+ crore annual power budgets.
For finance teams tired of explaining tariff increases.
For boards demanding cost certainty in volatile markets.
We structure long-term solar offtake with 10–25 year price protection. Zero capex options available. Request an indicative proposal — we'll compare illustrative solar landed cost to your grid trajectory.
Khurda Energy Park — 48 MW BESS-ready solar →
Disclaimer: Power cost escalation rates are based on historical data and industry projections. Actual future costs may vary. Pricing is subject to site assessment, project size, and contract terms. All cost comparisons and savings calculations are illustrative estimates. Actual results will vary based on facility consumption patterns and market evolution. This content is for informational purposes only and does not constitute financial advice or binding offer. Contact us for site-specific proposal with actual terms.