There are two models for Rooftop solar PV system.

CAPEX
In this model, the Solar plant owner pays 100% of the Solar PV installations system cost
upfront. This model allows residential, industrial and commercial customer to own the system
AND claim tax and depreciation benefits. Unlike the OPEX / RESCO model, where the
investor owns the asset, in the CAPEX model the end consumer can own the asset and
therefore the ability to control their Power Costs in the future.

The owner can avail up to 80 % accelerated depreciation against their Taxable Income and
therefore claim tax benefits. Today, Solar has no technology risk associated with it. In such a
scenario, why pay the margins for the OPEX investors if you have spare capital to invest.

We at MI Solar, help you determine which investment model to opt for. Then we help you set
a plant, by which you start saving on your Taxes and Energy costs.

OPEX / RESCO
Under this model, a third party investor invests in a Solar PV installations plant on a
consumer’s roof top and sells solar power to consumer. No investment is required from the
consumer. Under this model, the investor and the consumer, agree on a tariff (per kWh of
Solar power) and on a timeline of a power purchase agreement (typically between 25 years).

Comparison of CAPEX and RESCO .

Parameter CAPEX
Upfront Investment in the solar
Asset having life of more than 25
Investment years. Payback in year 6-7 after
which Cost of Generation of Solar
Power goes down to ~ Rs 1 / kWh
Accelerated Deprecitation benefit
Tax benefit of upto 80% of the System cost in
year 1.
System component evaluation,
Production warranties, make and ratings
guarantee and become the most critical aspect in
component quality decision making and may be time
consuming.
OPEX / RESCO
Zero Upfront costs, procure power
at rates cheaper than existing grid
rates and enjoy savings for the
term of PPA (usually 25 years)
from day 1 of the system
operation. BOOT option available
for 10, 12 and 15 years.
Accelerated Deprecitation benefit
will be taken by the investor who
owns the asset.
Solar system production is
guaranteed by developer so no
worry about the quality of the
system as any shortfall in
production results in developers’
loss. Only the absolute level of
production guarantee in relation to
DC system size is important.

No restrictions on shutting down
the solar plant, moving it to a
different location or even
removing it if the need be. Land /
Limitation on host Roof-top will not be leased out to
customer’s activity developer and hence any
modifications to the facility
remain under control of the
owner. No binding long term PPA
agreement with the developer.
Replacement of components,
Operations and maintenance,
Operation and
warranty claims, solar plant
Maintenance
insurance are all part of the
owners responsibility.
End of Life Disposal of the
End of life system will be owners
responsibility.
Owner of the plant will have to
assign resources for continuous
Monitoring and monitoring of the production from
analytics the solar plant and invest in
training personnel to operate and
maintain the plant to some extent.
Addition of components like
Energy Storage, Power quality
Value addition
enhancer, capacitor banks etc. can
be done at owners discretion.
There are certain responsibilities
of the host including but not
limited to making sure no shade
creating objects or activities are
developed or undertaken by the
host, no shutting down of solar
plant at will, host has to off-take
all the produced solar power,
land/roof-top has to be leased to
the developer for term of PPA.
Buyout & Termination options are
available but are usually very
costly.
Operations & maintenance as well
as Insurance are included in the
PPA rate and any warranty claims
are to be undertaken by the
developer.
End of life, except in the case of
BOOT models will be developers
responsibility
Daily asset monitoring for
production will be done by
developer using the advanced
analytical tools to predict any
issues not seen by the eye.
Any additional enhancement to
the facility in terms of captive
energy consumption reduction or
management has to be done
without affecting the solar plant
for the term of PPA