Solar PPA Rates in India: November 2026 Update

What Are Solar PPA Rates in India in 2026?

In November 2026, a commercial and industrial (C&I) buyer signing a rooftop solar PPA in India typically pays ₹3.5–5.5 per kWh, while open-access ground-mount PPAs clear at roughly ₹2.8–3.8 per kWh before state charges — against utility-scale auction discoveries of ₹2.34–2.69 per kWh, which set the market's floor (Mercom India). For comparison, HT industrial grid tariffs in North India run around ₹6.1–8.0 per kVAh, so a well-negotiated PPA still buys power at a 25–55% discount to the grid.

TL;DR:

• Utility-scale solar auctions (the pricing floor): ₹2.34–2.69/kWh — GUVNL discovered ₹2.34/kWh in March 2026, though GERC deferred its adoption in September 2026.
• C&I rooftop OPEX/RESCO PPAs: ₹3.5–5.5/kWh (industry benchmark ranges; typically 15–25 year terms, flat to ~3% escalation).
• Open-access ground-mount PPAs: ₹2.8–3.8/kWh plus state charges (wheeling, CSS, additional surcharge) that can add ₹1.3–4.0/kWh — group-captive structures are exempt from cross-subsidy surcharge.
• Solar-with-storage (FDRE/RTC) auctions clear ₹4.98–5.26/kWh — a ceiling for firm-supply deals.
• Drivers for 2026–27: GST cut to 5% pulls tariffs down ₹0.06–0.10/kWh, but the ALMM List-II domestic-cell mandate adds an estimated ₹0.30–0.40/kWh, and the ISTS waiver is phasing out to zero by June 2028.

Last verified: 5 November 2026

What Changed Recently

• 22 September 2025: GST on solar cells and modules fell from 12% to 5%. CareEdge Ratings estimated this saves developers 4–5% of project cost, potentially lowering plain-vanilla solar tariffs by ₹0.06–0.10 per unit (CareEdge Ratings).
• 30 June 2025 → 30 June 2028: the 100% ISTS transmission-charge waiver for solar expired in June 2025; projects commissioned by June 2026 got 75%, stepping down to zero after June 2028 (Moneycontrol). CRISIL estimates transmission charges add ₹0.5–1.5/kWh and flagged ~26 GW of projects facing cash-flow moderation (CRISIL Ratings).
• 31 July – 1 December 2026: the ALMM List-II mandate (domestic-made cells) became binding for open-access and net-metering projects commissioned on or after 1 June 2026, with the exemption extended to 31 December 2026 (The Economic Times, November 2026). CareEdge estimates the DCR price differential adds ₹0.30–0.40/kWh to future tariffs.
• March 2026: GUVNL's 625 MW auction discovered ₹2.34/kWh — India's lowest — but GERC deferred adopting the tariff in September 2026 over grid-stability and curtailment concerns (pv magazine India; SolarQuarter).

Latest Utility-Scale PPA Tariff Discoveries

These auctions are the floor for PPA pricing in India — C&I rates sit above them because rooftop sites, smaller scales and financing costs are less efficient:

Sources: pv magazine India, Mercom India, Mercom on SECI CPSU, JMK Research April 2026 update, and the SECI FDRE-RTC-V result PDF.

What C&I Buyers Actually Pay: 2026 PPA Benchmarks

Industry benchmark ranges (compiled from market intermediaries and vendor publications, not from any single regulator filing — actual quotes depend on site, size, credit and structure):

State rules move the landed cost more than the PPA rate itself. As an example, third-party open-access in Haryana carries a charge stack of roughly ₹4.00/kWh (wheeling ₹0.73 + CSS ₹1.45 + additional surcharge ₹1.37–1.82), which is why group captive is often the only economically viable route there — our state-by-state open access comparison tracks the full table and each HERC order behind it. Industry price sheets put intra-state open-access PPA tariffs at ₹3.00–4.00/kWh in Rajasthan and Gujarat in Q1 2026 (Wattency).

How a PPA Price Is Built Up

A PPA tariff is the developer's capex recovery, O&M, financing cost and return spread over the tenor:

• Tenor: 15–25 years is typical; 25-year PPAs are standard in utility auctions. Shorter tenors price higher.
• Escalation: Indian C&I PPAs range from flat (0%) to about 4% a year. Ground-mount open-access deals increasingly clear flat or at ≤1%, while rooftop RESCO deals commonly sit at 2–3%, sometimes capped. Buyer advice across industry guides: push for flat or ≤2%. Watch that any quoted "escalation cap" applies to the whole tariff, not just the base year.
• Technology and duty costs: modules were 15 ¢/Wp imported in mid-2025 (CareEdge); domestic-content requirements and the 2025 GST cut pull in opposite directions, and our monthly module price tracker follows the inputs.
• State charge stack (open access only): wheeling, cross-subsidy surcharge, additional surcharge and banking rules — see the open access guide for how they interact.

Worked Example: Rooftop PPA vs CAPEX for a 100 kW Plant

Assumptions (Haryana, indicative):

• Generation: ~1,53,000 units a year (100 kW × ~4.2 units/kW/day × 365 — see units per kW in North Indian cities).
• Grid tariff: ~₹6.95/kVAh at HT 11 kV (HERC held tariffs unchanged for 2026-27 per Hindustan Times; rate per tariff trackers — check your own bill).
• PPA route: ₹4.50/kWh flat RESCO PPA → saving ≈ ₹2.45/unit × 1,53,000 ≈ ₹3.7 lakh a year, with zero capex.
• CAPEX route: at Sun Wave's reference rate of ₹23,000/kW, a 100 kW plant is ≈ ₹23 lakh ex-GST (≈ ₹25 lakh with GST at the ~8.9% effective turnkey rate since September 2025 — see our GST/ITC explainer). Generating the same units against the same ₹6.95 grid rate saves ≈ ₹10.6 lakh a year, before O&M — a simple payback of roughly 2.3–2.6 years.

That is the trade-off in one line: the PPA starts saving from day one with no capital outlay, while CAPEX captures the full margin after a ~2.5-year payback. Our CAPEX vs OPEX vs open access comparison works through this decision properly, and 100 kW system costs details the CAPEX side. If you are evaluating either route for a factory in Delhi-NCR, Haryana or Rajasthan, talk to Sun Wave — final pricing follows a site survey.

Where PPA Rates Are Heading

Two opposing forces, both sourced: the GST cut and falling module prices pull tariffs down (₹0.06–0.10/kWh from GST alone, per CareEdge), while the ALMM List-II domestic-cell mandate adds an estimated ₹0.30–0.40/kWh and the ISTS waiver phase-out raises landed interstate costs (CRISIL: return impact of 80–370 basis points on ~26 GW of projects). Auction activity cooled 10% quarter-on-quarter in Q3 2026 even as tendering surged 61% (Mercom India). Net: expect plain-vanilla PPA rates to stay near current levels through FY 2026-27, with firm-supply (FDRE) premiums widening as storage penetration grows.

Frequently Asked Questions

What is a good solar PPA rate for a factory in India in 2026?

For rooftop OPEX/RESCO deals, ₹3.5–5.5/kWh is the current industry band — a quote below ₹3.5 on a rooftop deserves scrutiny of module quality and O&M commitments, and above ₹5.5 you should compare a CAPEX build. Open-access ground-mount deals clear at ₹2.8–3.8/kWh before state charges.

Why are C&I PPA rates higher than auction tariffs?

Utility auctions discover ₹2.34–2.69/kWh because they price 1,000+ MW of land, single-axis tracking, wholesale financing and 25-year state-backed offtake. A C&I rooftop is smaller, costlier per kW to build, financed at retail rates and carries DISCOM-interconnection risk — hence ₹3.5–5.5/kWh.

What PPA escalation should I accept?

Flat (0%) to ~2% a year is the market norm for well-negotiated deals; rooftop RESCO quotes often start at 2–3%. Anything above 4% compounds badly over a 20-year tenor — at 4% escalation, a ₹4.50 tariff grows to about ₹9.50 by year 20.

Is a group captive PPA cheaper than third-party sale?

Usually, yes. Group captive consumers (holding 26% equity and consuming ≥51% of the output) are exempt from the cross-subsidy surcharge, which alone can be ₹0.4–1.5/kWh depending on the state. In Haryana, the charge stack makes group captive the only economically viable open-access route for most buyers.

How does the ISTS waiver phase-out affect my PPA?

For interstate open-access deals, transmission charges that were waived now phase in — 75% waiver for projects commissioned by June 2026, 50% by June 2027, 25% by June 2028 and zero after. CRISIL pegs transmission costs at ₹0.5–1.5/kWh, so interstate PPAs signed now should be priced with this built in; intra-state deals are unaffected.

Is a solar PPA cheaper than buying the plant (CAPEX)?

Over 20+ years, CAPEX usually wins for buyers who can deploy capital: the same 100 kW plant that saves ₹3.7 lakh a year under a ₹4.50 PPA saves ≈ ₹10.6 lakh a year when owned outright, paying back in ~2.5 years at Sun Wave's reference rate. The PPA wins on speed, zero capex and off-balance-sheet treatment — the comparison depends on your cost of capital and appetite for asset ownership.