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