In Short : India’s renewable energy roadmap envisions rooftop solar as a key driver of decentralized clean energy. With initiatives like the PM Surya Ghar Muft Bijli Yojana, millions of households and businesses are being encouraged to adopt solar.
A crucial decision for consumers—whether households, industries, or institutions—is choosing between the CAPEX (Capital Expenditure) and OPEX (Operating Expenditure / RESCO) models. Both offer unique advantages depending on financial capacity, energy needs, and risk appetite.
The CAPEX Model
In the CAPEX model, the consumer invests upfront to purchase and install the rooftop solar system, thereby owning the asset and enjoying its lifetime benefits.
Features:
- Ownership: Consumer owns the system.
- Investment: High upfront capital required.
- Returns: Direct savings from reduced electricity bills.
- O&M: Responsibility lies with the consumer (can be outsourced).
Advantages:
- Maximum long-term financial savings.
- Full ownership of Renewable Energy Certificates (RECs) & environmental benefits.
- Attractive for large electricity consumers (industries, malls, hospitals).
Disadvantages:
- High upfront cost—barrier for households & SMEs.
- Requires long-term commitment & efficient system management.
The OPEX Model (RESCO)
In the OPEX model, a third-party developer owns, operates, and maintains the rooftop solar system. The consumer pays only for the electricity consumed, usually through a Power Purchase Agreement (PPA) at a tariff lower than grid electricity.
Features:
- Ownership: Developer owns the system.
- Investment: No/minimal upfront cost for consumer.
- Payment: Per-unit charge at pre-agreed tariff.
- O&M: Entirely managed by the developer.
Advantages:
- Removes upfront financial barrier.
- Transfers operational risk to developer.
- Suitable for cash-strapped institutions (schools, hospitals, govt. buildings).
Disadvantages:
- Lower long-term savings (developer retains part of benefits).
- Long-term PPAs reduce consumer flexibility.
- Developers prefer large, creditworthy clients—residential uptake is slower.
CAPEX vs OPEX: Comparative Snapshot
| Aspect | CAPEX Model | OPEX Model (RESCO) |
|---|---|---|
| Ownership | Consumer | Third-party developer |
| Upfront Cost | High | Nil or minimal |
| Savings | Maximum (after payback period) | Moderate (shared with developer) |
| Risk | Consumer bears performance risk | Developer bears performance risk |
| O&M | Consumer (self or outsourced) | Developer |
| Target Users | Large industries, high-consumption | Households, SMEs, institutions |
Adoption Trends in India
- C&I Segment: Dominated by CAPEX, as large players can invest upfront for long-term benefits.
- Residential Segment: Slower in CAPEX due to high costs; OPEX gaining traction under subsidies and partnerships.
- Government & Institutions: Prefer OPEX, as it avoids budget strain and transfers risks to developers.
Policy & Market Enablers
- Government Subsidies – Reduce upfront cost for residential CAPEX systems.
- DISCOM Integration – Net metering policies enhance returns for both models (though state-level variations exist).
- Green Financing – Banks & NBFCs offering rooftop solar loans to support CAPEX adoption.
- Performance-based PPAs – Under OPEX, tariffs designed cheaper than grid electricity drive adoption.
Conclusion
Both CAPEX and OPEX models are vital for scaling rooftop solar in India:
- CAPEX → Best for consumers with sufficient capital and long-term demand, maximizing financial savings.
- OPEX → Democratizes solar adoption by removing upfront costs and shifting risks to developers.
A balanced mix of CAPEX in the C&I sector and OPEX in residential & institutional segments will be key to meeting India’s rooftop solar targets.
Collaboration between DISCOMs, policymakers, financiers, and developers will ensure rooftop solar becomes a mainstream choice across consumer categories.
