Executive Summary
In April 2021, a Steel major signed a 50 MW Open Access Solar PPA, chasing the lowest L1 tariff. They promised their Board ₹2 per unit in savings for 15 years. By 2023, a regulatory notification hiked Cross-Subsidy Surcharge (CSS) and Additional Surcharge (AS), turning those savings into a -₹0.60/unit loss. The CFO stood before the global Board with a ₹32 Crore unhedged liability. The “cheapest” solar tariff had become their most expensive mistake. This post breaks down how the spreadsheet failed and why numbers lie, but clauses don’t.
The Setup: The “Guaranteed” Savings
The procurement strategy was simple: maximize immediate margins by locking in the absolute lowest tariff. The CFO told me directly: “Gaurav, we locked in the best tariff. The savings are guaranteed.” The Board approved the 15-year PPA unanimously, seeing a clear, low-cost Excel model.
The Constraint: Zero Visibility
Two years later, the regulatory landscape shifted:
- CSS Hiked: Regulatory charges increased.
- AS Levied: New Additional Surcharges were introduced.
- The Result: The projected ₹2/unit savings vanished.
The Verdict: Numbers Lie, Clauses Don’t
The CFO treated a 25-year Power Purchase Agreement (PPA) like a standard equipment purchase.
They missed the critical due diligence on ‘Change in Law’ pass-through clauses.
It resulted in a ₹32 Crore hidden financial liability and completely broken trust at the boardroom level.
Next Steps for the C-Suite: The CLEST Framework
If you are evaluating an Open Access solution, you need to ensure complete clarity before you sign. To prevent such disasters, we developed the CLEST Audit Framework.
This is our proprietary 5-step matrix to stress-test a developer’s IRR claims before they reach your Managing Director. If you want to know more about stress-testing your own projects:
In this session, we will audit your termination liability, quantify your risks, and ensure your energy strategy is mathematically defensible before you commit your balance sheet.
About Infinia Solar
Infinia Solar is India’s leading renewable energy consultant.
We help Commercial and Industrial consumers procure the right renewable energy solutions, from the right developers, and on the right PPA terms.
We’ve served 60+ customers across 18 states, enabling 1.4 GW of open access and rooftop solar capacity, and have facilitated 150+ PPAs so far.
This has helped our customers reduce up to 50% of their electricity costs and replace up to 100% of their power with renewable energy.
We have also collaborated with 50+ developers, and our customers fondly refer to us as the ‘Amazon of the renewable energy industry.‘