A utility scale Solar PV plant can be monetized through several avenues:
Utility usually refers to state power generation or distribution companies (TANGEDCO, APTRANSCO, and MAHAGENCO) or other large central power entities such as NTPC.
There are two ways you could sell power to these state utilities.
A Power Purchase Agreement (PPA) is signed with the DISCOM, usually for 25 years, where the price of power (Rs. /kWh) is either determined through competitive bidding or a Feed-In-Tariff (FIT) is fixed by the government. This is the most popular form of power sale in India today.
The solar plant developer sells power to the DISCOM at Average Pooled Power Cost (APPC) which is fixed by each state, and is usually lower than the PPA/FIT tariff (Madhya Pradesh APPC –Rs. 2.79/kWh; Karnataka APPC –Rs. 3.06/kWh). The developer additionally receives Renewable Energy Certificates (RECs) that can be sold to entities with a Renewable Purchase Obligation (RPO). This model is currently not very popular in India due to poor sales of RECs.
A private company is free to purchase power from whoever they wish, with only a few constraints attached. You could sell the power generated to private companies as well. This route typically is through a power purchase agreement.
PPA – The solar plant developer signs a PPA with a private consumer for sale of power. The price is usually decided based on negotiation. The PPA term may only be 5 years initially. The private consumer will need to apply for Open Access to buy power from anyone other than the utility.
For power plant developers who also happen to be running energy intensive businesses, the third route to sell power is through the captive consumption of the solar power generated by their own power plant.
The solar plant developer is also the consumer of power. Here, the cost to consumer is the cost of obtaining solar power at the facility i.e., landed cost of power.
Solar generation under captive consumption is also eligible for RECs, provided that no concessions have been obtained.