With interest rates stabilizing and traditional investments offering limited returns, solar energy projects—especially captive and group captive models—now offer some of the most attractive risk-adjusted returns for Indian corporates and investors. In 2025, solar IRR consistently outperforms fixed deposits, bonds, and even REITs.
In 2025, solar power stands out as the most compelling investment for corporates and investors seeking stable, long-term returns. With strong policy tailwinds, superior tax benefits, and guaranteed cost savings, solar IRR significantly outperforms FDs, bonds, and REITs—making it a strategic financial and sustainability opportunity.
FD and Bond Returns Are No Longer Keeping Up With Inflation
Fixed Deposits, once a safe and reliable investment, now yield 5–7%, barely covering inflation for high-net-worth individuals and corporations.
Corporate and government bonds fare slightly better at 7–9%, but still fail to deliver meaningful wealth creation, especially when tax-adjusted.
In comparison, solar investments—backed by predictable generation, 100% secured off-take, and long-term PPAs—deliver 14–20% pre-tax IRR consistently.
This makes solar one of the rare asset classes where return visibility extends 20–25 years into the future.
Solar IRR Is Protected From Market Volatility
REITs, equities, and even sovereign bonds are subject to market cycles, rate shifts, geopolitical pressures, and liquidity constraints.
Solar, on the other hand:
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Produces electricity daily
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Earns cash flow from long-term PPAs
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Has minimal operating expenses
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Is immune to stock market volatility
This fundamental difference makes solar a cash-flow-centric asset, not a market-dependent one.
Most large corporates now prefer this stability over fluctuating market instruments.
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Strong Policy Support and Tax Benefits Boost Real Returns
Solar investors enjoy multiple tax incentives that directly improve IRR:
✔ Accelerated Depreciation (40% in Year 1)
Significantly reduces taxable income for profitable companies.
✔ Section 115BAB / Manufacturing benefits
For industrial entities using solar as captive power.
✔ GST input credit
Reduces effective capex.
These fiscal advantages lower the payback period to 3–5 years, compared with 8–12 years for REITs and long-duration bonds.
Long-Term Tariff Visibility Creates Stable Cash Flows
Grid electricity tariffs have historically risen 4–6% per year, while solar generation cost remains flat for 25 years.
This widening gap provides corporates with a natural financial hedge.
Solar PPAs—whether captive or group captive—lock power tariffs at ₹3–₹5 per unit, compared to ₹9–₹14 per unit grid tariffs for many industries.
This difference creates a compounding savings effect, which translates into high IRR with low risk.
No traditional investment class offers this level of predictability.
Can’t wait to see the positive impact this will have on operational workflows and client experiences!