How OPEX and CAPEX Model Solar Power Plant Offering Huge Opportunities to All - Indiavent
If you've considered switching to solar power and looking into financing possibilities, you may have noticed:
CAPEX MODEL
RESCO/OPEX Model
So, what exactly are these models?
What advantages do they offer?
In this article, we've discussed them in detail.
Users can choose between two types of solar power plants.
Based on the needs of the customer, EPC companies provide these models.
CAPEX Model Solar Power Plant
Capital expenditure is abbreviated as CAPEX.
The customer pays for all equipment, design, installation, and commissioning costs in this sort of business.
The customer has the option of operating and maintaining the plant himself or hiring a third party for free on a yearly basis.
The customer has two options for financing the solar power plant within CAPEX:
Get a Cash Loan
A mix of credit and cash is used.
Banks will lend up to 70% to 80% of the solar plant's cost.
SBI, IDBI, Punjab National Bank, Yes Bank, and other Indian banks provide solar financing.
CAPEX Advantages
The consumer enjoys all of the benefits associated with the installation of a solar power plant.
There are two types of advantages:
Electricity Bill Savings
Accelerated depreciation provides a tax benefit.
In the CAPEX model, the return on investment (ROI) is typically in between - 4 - 5 Years.
OPEX Model Solar Power Plant
The OPEX model, also known as the RESCO Model or Zero investment solar model, is one in which customers just provide the location for a solar plant, which is owned and maintained by installer businesses or investors.
Customers do not need to worry about the initial investment in an OPEX Model Solar Power Plant because investors invest money and the user simply pays for the energy produced.
The customer pays the monthly electricity bill as per the negotiated tariff at the time of PPA.
The PPA agreement's duration ranges from 10 to 25 years.
Typically, the discount granted is between 20% and 40% of the existing electricity bills.
However, the exact exception varies from instance to situation.
The Benefits of OPEX
The strategy allows the client to invest their money in various areas.
It also allows for low-cost electricity and lowers electricity bills.
The investor, on the other hand, receives a profit in the form of a return on investment.
PPA
PPA (Power Purchase Agreement) is a basic agreement between a User and a solar power plant Developer in the OPEX model.
The following are the main terms of the PPA:
a) electricity rates or per unit fee
b)PPA agreement term
c) Increase in electricity price, if any
d) Guarantee on generation
Do you want to build a solar power plant?
Connect with Loofal Protech Solution to get a quote.