Quick definition: RESCO (Renewable Energy Service Company) and OpEx Solar(Operational Expenditure) models are financing mechanisms where customers can install solar systems with minimal upfront costs, paying only for the energy consumed while the developer maintains ownership of the system.
Table of contents
- Quick understanding of RESCO/OPEX in solar
- Detailed explanation of solar financing models
- India-specific context and examples
- Practical applications
- How Neufin can help?
- Related terms
- FAQs
- Additional resources
- Last updated date & disclaimer
Detailed explanation of solar financing models
There are three primary ways to finance solar projects under RESCO/OpEx solar models:
1. Power purchase agreement (PPA)
In this model, the developer installs and maintains the solar system while the customer agrees to purchase the generated electricity at a predetermined rate, typically lower than grid electricity. The contract duration usually spans 15-25 years.
2. Operating lease model
Customers can lease the solar system for a fixed monthly payment. This model offers flexibility with shorter contract terms (5-15 years) and potential ownership transfer options at the end of the lease period.
3. Build-operate-transfer (BOT)
The developer builds and operates the system for a specified period, after which ownership transfers to the customer. This model typically involves a combination of upfront payment and regular operational payments.
India-specific context and examples
Implementation Sectors
- Public sector buildings demonstrate RESCO model adoption, helping government facilities reduce operational costs
- Metro rail projects and transportation infrastructure across major cities explore RESCO implementations
- Educational campuses and institutions adopt RESCO models to manage their energy costs while promoting sustainability
Regional Progress
- Industrial clusters in western India adopt RESCO models for manufacturing facilities
- Commercial buildings in metropolitan cities implement rooftop solar through RESCO agreements
- IT parks and office complexes in southern states show increasing adoption of RESCO models
State-Level Frameworks
- State electricity regulatory commissions provide guidelines specific to RESCO project implementation
- Net metering policies in various states support RESCO model viability
- State industrial policies include provisions for RESCO-based solar installations
Market Segments
- Textile and manufacturing industries utilize RESCO to manage high electricity consumption
- Multi-story commercial complexes demonstrate RESCO adoption in urban settings
- Warehouse and retail sectors implement RESCO for large-scale rooftop installations
RESCO / OpEx solar implementation continues to gain traction across India’s diverse sectors, supported by state policies and growing market maturity. This model’s success demonstrates its adaptability to various Indian business environments and energy needs.
Practical applications
RESCO/OpEx solar models are particularly suitable for:
- Commercial and industrial facilities requiring 100kW-10MW systems
- Government buildings and institutions
- Educational campuses
- Manufacturing units with high power consumption
How Neufin can help?
Neufin helps your company make the switch to renewable energy. We provide the fastest way for companies to buy renewable energy in India. Companies choose Neufin because we provide –
- Guaranteed cost savings – Lower your electricity bills without operational headaches.
- End-to-end execution – From feasibility to power delivery, we handle everything.
- Zero upfront investment options – Easy and flexible financing through Neufin Capital
Related terms
- CAPEX solar financing
- Net metering
- Solar PPAs
- Renewable energy certificates
Frequently Asked Questions (FAQs)
What is the minimum system size for RESCO models in India?
Typically, RESCO models are viable for systems above 100kW, though this may vary by developer and location.
How much can businesses save through RESCO models?
Businesses can typically save 20-30% on electricity costs without upfront investment, depending on local tariffs and consumption patterns.
What happens after the PPA term ends?
Options usually include system purchase at depreciated value, contract extension, or system removal by the developer.
Additional resources
- MNRE guidelines for RESCO projects
- State solar policies
- SECI documentation
Last updated date & disclaimer
Last updated: January 2024
Disclaimer: This information is for general guidance only. Specific terms and conditions may vary by provider and location. Consult with financial and legal experts before making decisions.
