Savings for commercial and industrial (C&I) consumers under solar open access narrowed across most states in the fourth quarter (Q4) of 2025 as rising power purchase agreement (PPA) tariffs and charges drove up landed procurement costs, according to Mercom India’s Q4 and Annual 2025 Solar Open Access Market Report.

The landed cost for high-tension industrial consumers is calculated using PPA prices along with wheeling charges, cross-subsidy surcharge, and additional surcharges in each state. During Q4, higher PPA tariffs narrowed the margin between open access power and state distribution company (DISCOM) tariffs, particularly under the third-party model.

Of the 15 states analyzed, 12 experienced a quarter-over-quarter increase in landed costs, primarily due to higher PPA tariffs and, in some states, higher open access charges. Landed costs in Telangana declined due to lower open access charges.

In Q4, the net landed open access cost across states ranged from ₹8.4 (~$0.094)/kWh to less than ₹5 (~$0.056)/kWh. Maharashtra reported the highest landed cost, followed by Tamil Nadu and Karnataka. Odisha, Uttar Pradesh, and Chhattisgarh reported the lowest costs.

Odisha, Uttar Pradesh, Chhattisgarh, Punjab, Andhra Pradesh, Gujarat, Rajasthan, Madhya Pradesh, Karnataka, Tamil Nadu, and Maharashtra witnessed a decrease in the scope for savings under the third-party model. Notably, savings in Punjab and Tamil Nadu turned negative compared with the last quarter.

Conversely, Telangana’s savings shifted from negative to positive this quarter following the removal of the additional surcharge, which reduced overall landed costs and improved the economics of open access procurement in the state. However, the state government has recently announced the reintroduction of the additional surcharge for the upcoming quarters, which could increase landed open access costs and potentially reduce savings going forward.

Under the group captive model, most states saw reduced savings, primarily due to rising open access charges and declining DISCOM tariffs.

Odisha and Telangana witnessed the highest estimated savings under the third-party model. Telangana recorded the highest savings under the captive and group-captive solar open access models.

In Gujarat, the additional surcharge increased by 22%, from ₹0.82 (~$0.0096)/kWh as of October 1, 2025, to ₹1 (~$0.011)/kWh as of March 31, 2026. Odisha increased its wheeling charges by approximately 3% from the previous quarter.

PPA tariffs increased in Q4 due to the mandatory use of Domestic Content Requirement (DCR) modules from June 2026, which will raise module procurement costs and overall project capital expenditure for projects commissioned from Q2 2026 onward.

Projects with PPAs signed in Q4 2025 are expected to be commissioned during the DCR compliance period. This would require such projects to factor in higher DCR-linked costs. As a result, PPA tariffs rose by approximately ₹0.25 (~$0.003)/kWh during the quarter, reflecting forward cost adjustments in anticipation of the regulatory requirement.

The savings under the third-party model were lower than those of the captive and group captive projects due to exemptions from CSS and additional surcharges. State commissions can consider lowering these charges to encourage third-party open access models, given the potential for additional savings.

These insights are from the Q4 and Annual 2025 India Solar Open Access Market Report, which is 82 pages long and covers state-wise open access charges, electricity tariffs, power purchase agreement tariffs, installed and pipeline project capacities, policy updates, and other critical market information.