Commercial and industrial (C&I) consumers in Uttar Pradesh are evaluating combinations of rooftop solar and green energy open access to reduce electricity costs, while assessing battery storage for improved power reliability and demand management.

However, regulatory approvals, limited roof space, and the economics of battery storage remain important considerations in renewable energy procurement decisions.

Procurement Models

Rahul Makahaniya, Chief Marketing Officer at Soleos Energy, explained that businesses seeking to procure renewable energy through open access must obtain several regulatory approvals.

The process typically involves registration with the Uttar Pradesh New and Renewable Energy Development Agency, obtaining connectivity approval from the relevant distribution or transmission utility, and securing clearance from the Chief Electrical Inspector to the Government after project construction.

The extent of consumer involvement in obtaining these approvals depends on the procurement model.

Under the captive model, businesses can determine project specifications, including the selection of solar modules and inverters, and negotiate commercial arrangements with engineering, procurement, and construction (EPC) contractors, who can also handle regulatory approvals.

Under group captive and third-party open access arrangements, consumers typically enter into power purchase agreements (PPAs) with developers, who manage project development and regulatory compliance.

Makhaniya said captive projects generally offer the highest savings, followed by group captive arrangements, which have gained popularity in India over the past two years.

Makhaniya observed captive projects generally offer greater savings potential, followed by group captive arrangements, which have gained traction in recent years. Third-party open access allows businesses to procure renewable electricity without developing their own generation assets.

Combining Rooftop Solar and Open Access

According to Chirayyu Jain, Head of Development, HFM Solar, rooftop solar can meet part of a business’s electricity demand, while open access enables procurement beyond the capacity available onsite.

Drawing on his experience of working with paper mills in Shahjahanpur district and steel mills in Gorakhpur district in Uttar Pradesh, he noted that limited rooftop space often prevents industrial consumers from meeting a significant portion of their electricity requirements through onsite solar alone.

He explained that developers assess daytime consumption, particularly between 9 a.m. and 4 p.m., to optimize behind-the-meter solar generation against industrial demand.

Businesses with higher electricity requirements can supplement rooftop installations with open access procurement.

Jain said malls, sugar mills, flour mills, and other energy-intensive industries in Uttar Pradesh are adopting such combinations to optimize electricity costs.

He also called for simpler open access procedures to encourage greater participation from micro, small, and medium enterprises.

Actual Electricity Savings Versus Headline Tariffs

Jain emphasized businesses must distinguish between the tariff quoted by renewable energy developers and the actual landed cost of electricity, which includes applicable charges and other commercial considerations.

Even savings of ₹1.50 (~$0.0158)/kWh through open access could substantially reduce operating expenses for energy-intensive businesses.

However, changes in regulatory charges and penalties can affect project economics. He advised consumers to evaluate these risks before entering long-term procurement agreements and periodically review their electricity costs.

Ravi Kaushal, General Manager – Strategy and Growth, TrueRE Oriana Power, noted depreciation benefits should also be considered when assessing project returns, as they can improve the internal rate of return for eligible investments.

He added that increases in grid tariffs over time could strengthen the economics of solar investments.

Battery Storage Economics

Kaushal said battery storage is becoming increasingly attractive for utility-scale renewable energy projects, while adoption among C&I consumers remains at an early stage.

Storage could be economically viable for industrial consumers when deployed for specific applications. Businesses must first identify whether they intend to use batteries for energy shifting, replacing diesel generators, or managing peak electricity demand.

Additionally, the financial viability of storage depends on the intended application, the number of charging and discharging cycles required each day, and the selection of reliable battery suppliers.

Battery safety is another important consideration when evaluating storage investments.

Kaushal also highlighted the role of energy management systems in optimizing electricity consumption from multiple sources. Such systems can coordinate power drawn from solar installations, battery storage, diesel generators, and the grid while managing battery charging and discharging. This allows businesses to optimize electricity consumption and potentially reduce dependence on diesel generators.

Storage May Increase Open Access Costs

Makhaniya said battery storage integration in open access projects could increasingly be influenced by regulatory requirements rather than consumer demand alone.

He cited developments in Maharashtra, Gujarat, and Madhya Pradesh concerning the integration of storage with renewable energy projects.

“As India works towards achieving grid stability, even if battery storage isn’t very viable in open access right now, it will become more prevalent in the future because of the regulatory environment.”

However, adding battery storage increases the cost of renewable electricity by approximately ₹3.75 (~$0.0395)- ₹3.80 (~$0.0401)/kWh, with the extent of the increase depending on storage duration, utilization, and operating requirements, Makhaniya said.

Kaushal said the rapid expansion of renewable energy capacity, combined with transmission constraints and challenges in utilizing available generation, strengthens the case for storage.

He also noted that battery storage project commissioning has lagged tendering activity, citing supply-chain constraints, geopolitical uncertainties, and China’s dominance in battery manufacturing as contributing factors.

Solar and Storage for Reliable Industrial Power

Jain said unreliable grid supply has encouraged industrial consumers in Uttar Pradesh to evaluate alternative electricity arrangements, including solar and storage.

As battery deployment expands, he emphasized the need for more sophisticated diagnostic and monitoring technologies.

While solar installations have established performance monitoring and fault detection systems, battery storage requires continuous assessment of parameters such as state of health, state of charge, degradation, and potential thermal risks.

He said battery monitoring and safety technologies will become increasingly important as systems age and deployments expand over the next five to 10 years.

The speakers shared these insights during the session ‘Switching to Renewable Energy and Optimizing Savings’ at Mercom India’s C&I Clean Energy Meet held in Lucknow, recently.

Mercom India organizes C&I Clean Energy Meets across India to help businesses evaluate renewable energy technologies, financing options, project economics, and implementation challenges. The next Meet will be held in Pune in November.