Thursday, 11 April 2019

Solar Project Financing - CAPEX vs OPEX / RESCO - which is better for you?

Solar CAPEX
(Investment by Power Off-taker / Consumer)
Solar OPEX / RESCO / BOOT
(Investment by ENERCO)
Capital investment of upto INR 4.0 Crores per MW would be done by the consuming company.
Capital investment of upto INR 4.0 Crores per MW would be done by ENERCO. No initial investment required by the consuming company.
40% Accelerated Depreciation as per Indian IT Rules can be claimed by off-taker.
40% Accelerated Depreciation as per Indian IT Rules will be claimed by ENERCO.
Operation and Maintenance of the Project is the scope of Consuming Company., typically about INR 6-8 Lakh per MW per Annum + replacement cost of equipment, if any.
Operation and Maintenance of the Project is in the scope of ENERCO.
After initial investment recovery period of about 3 to 5 years, FREE power is available to consuming Company for 20+ years.
Off-taker continues to pay to ENERCO for the duration of PPA (typically 10 to 20 years).
Technology risks are more as once installed the projects would have a life of 25 years.
Technology risks are lesser as technology up-gradation could be negotiated with the ENERCO (subject to conditions).
Expected Project IRR would be 15% (+Tax Benefits)
Consumer will start saving from the first day of project commissioning on discounted grid tariff (typically INR 4.5 per kWh for a MW+ project)
Assets owned by off-taker from the 1st day of operations.
Assets can be transferred to off-taker with a buyback option for each year post commissioning.
Performance of the project is responsibility of one-time Contractor chosen for the project.
Performance of the project is responsibility of ENERCO to give ensure most optimum output.
There are other possible FINANCIAL models such as :
1.    EMI with payback option of 3 to 5 years.
2.    Combination of above 2 models i.e. Performance linked PPA.
3.    Open Access OPEX / 3rd party Open Access.
4.    Deferred EPC + Customized EPC Package etc.
5.    Customized Financial model.

You can download the above FREE in PDF format from - Solar CAPEX vs OPEX (PDF)

Contact us to NOW know more : www.econserve.in / solar@econserve.in /
   +91 9890737447
ENERCO ENERGY SOLUTIONS LLP (estd. 2009) is India’s oldest and most reputed Solar Power Company. Clientele – Reliance Industries, Aditya Birla Group, JSW Steel, Ambuja Cement, Emami Group, Essar Steel, Mahanagar Gas Ltd. etc. to name a few.

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