Types Of Solar Roof-top Business Model- CAPEX & OPEX/RESCO

Abhay | Post Date : 25-Dec-2019

Solar Panel Installer in Agra


CAPEX MODEL: In this model, the entire investment comes from the power consumer, consumer generally hire a solar EPC company who provide turnkey installation of entire solar power system and hand over assets to consumers. EPC also do annual operation and maintained (O&M) of plant on mutually agreed cost per annum. This model allows the consumer to avail TAX benefits and accelerated DEPRECIATION. Today, Solar has no technology risk associated with it. So, why pay the profits to OPEX/RESCO company if you have spare capital available with you. OPEX/RESCO MODEL: In the OPEX/RESCO model, an investor or project developer (sometimes called Renewable Energy Service Company –RESCO) invests the CAPEX and consumer pays for the energy consumed/supplied by the solar power project delicately developed for a particular consumer. Both consumer and developer sign a long-term power purchase agreement (PPA) for an agreed tenure (typically 25 years) & tariff(per KWh of solar power).

Rooftop Leasing (Under Gross Metering)

Under this arrangement, the RESCO developer leases the rooftop and pays a fixed lease/rental to the building owner over the time of the lease period for installing the solar panels of the rooftop. The RESCO developer exports the solar energy to the utility at a predetermined feed-in-tariff (FiT) approved by the regulator..

Power Purchase Agreement (Under Net Metering)

Here the RESCO developer invests in solar rooftop asset, and sells the generated power to the building owner in favor of a lower solar power tariff. The excess power could be sold by the building owner to the utility through net metering system.