What is the CAPEX and OPEX / RESCO/ PPA model of Solar?

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What is the CAPEX and OPEX / RESCO/ PPA model of Solar?

The CPEX, OPEX(RESCO) and PPA are two models of buying solar energy. Here are what they mean and how they are different from each other:

CAPEX: CAPEX stands for Capital Expenditure. If you go solar under the CAPEX model, you are required to pay the total cost of the solar system upfront. This allows you to own the solar system and makes you eligible to avail the accelerated depreciation benefits.

OPEX/ RESCO/ PPA: OPEX or RESCO stands for Open Expenditure. If you go solar under this model, you essentially choose to not buy the solar system but the solar energy produced by the solar system. The solar system in this mode is installed and owned by the solar installer or a third party and you are required to sign a Power Purchase Agreement(PPA) of purchasing the electricity from the solar system at a specified rate for a certain number of years. These agreements are usually signed for 15~25 years.

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