NEW DELHI: India Inc is no longer content to wait on the grid. From steel mills and cement kilns to car factories and glass-fronted office parks, companies are building or contracting their own renewable power plants, betting that electricity they control will be cheaper, steadier and cleaner than what the local discom supplies.
Captive power, where a company generates or arranges electricity mainly for its own use instead of buying its entire requirement from the distribution company, is not new. In recent years it was driven largely by coal, helped by the opening up of captive mining and rules allowing surplus power to be sold to the grid. What has changed is that the sun and wind are now doing much of the heavy lifting.
Industry sources say green captive capacity has strengthened the case for companies to make their own electricity, shielding them from spot power prices that spike whenever supply runs short. Nowhere is this more visible than in power-guzzling sectors such as steel, cement and metals, where electricity is among the biggest costs and a single outage can halt production.
The numbers are getting large. UltraTech Cement has around 2 gigawatts (GW) of captive renewable capacity, JSW Steel about 1 GW and Ambuja Cements close to 980 MW. Hindalco and Tata Steel have built their own too. And there is more on the way: JSW Steel has another 1.5 GW in various stages of commissioning, while Tata Steel has nearly 800 MW in the pipeline.
The economics are hard to argue with. A 2026 study by JMK Research and partners found electricity can make up as much as 40% of operating costs in secondary steel. Renewable power in several states was available at Rs 4.5-6 a unit, against grid tariffs of Rs 7-8. The study singled out group-captive procurement as one of the most scalable options for industrial users.
“The trend reflects evolution of India’s industrial power consumption pattern and expanding industrial base while supporting corporate sustainability goals and country’s long-term decarbonisation ambitions,” said Shardul Fadnavis, partner, climate & energy, PwC India.
Power-intensive industries need round-the-clock supply, Fadnavis noted, while businesses that run mostly during daylight hours find captive solar especially attractive. “Captive generation concept is not new. Long-standing regulation, cheaper renewables, supportive policies, and procurement mandates have accelerated its adoption,” he said. What companies want now, he added, is cost certainty, energy security and cleaner power.
The shift has rolled out of the smokestack sectors and onto the assembly line. Maruti Suzuki drew nearly 23% of the electricity at its manufacturing facilities from renewables in FY26 and aims to take that to 85% by FY31. “Maruti Suzuki is enhancing the use of renewable electricity in manufacturing through in-house solar power generation and external green power procurement,” said Rahul Bharti, senior executive officer, corporate affairs. The carmaker plans to spend about Rs 1,000 crore as it works to cut manufacturing emissions from 615,000 tonnes a year to 266,000 tonnes by FY31.
Tata Motors is further along. Renewables met about 78% of consumption at its passenger-vehicle operations and 51% at its commercial-vehicle operations in FY26, through a mix of rooftop solar, captive and group-captive projects and long-term green-power deals. It has also tied up wind-solar hybrid projects for several plants, a sign that corporate green power is moving well beyond panels on factory roofs to large, dedicated projects.
Even offices are getting in on the act. Embassy REIT runs a 100 MW solar park in Karnataka that feeds its business parks. “Our 100 MW solar park in Karnataka supplies renewable energy to our business parks, strengthening energy security, enhancing long-term cost efficiency and reducing our carbon footprint,” said Amit Shetty, CEO, Embassy REIT.
WeWork India is building a 10 MWp solar plant for its Bengaluru operations, which should lift renewables’ share of its electricity from close to 40% to around 50%. “Captive renewable power gives us an opportunity to bring greater predictability to costs, reduce exposure to tariff fluctuations and take more control over how we meet our energy needs,” said Karan Virwani, managing director & CEO, WeWork India.
Fadnavis expects adoption to pick up pace as competitive tariffs, reliability and sustainability goals increasingly line up. Over time, he says, captive green power will stop being a sustainability badge and become a core part of how Indian businesses manage energy.
Source: The Financial Express
