Capex Solutions
In this model of development, the end user of electricity invests their own money in setting up the Plant, and thus retain the asset on their balance sheet. Since the entire Capex (short form for Capital Expenditure) is undertaken by the end user, it’s called as Capex Model. The investment can be sourced from internal resources or financing through existing banking relationships. Recta Power will undertake implementation of the Project in turnkey EPC mode with end to end services including statutory approvals. The key benefit of this model is maximum savings and option to avail accelerated depreciation on the Solar Plant.
Opex Solutions
Opex is the short form for Operational Expenditure. In this model, the end user doesn’t undertake capital expenditure. Instead, a third party developer undertakes the capital expenditure and owns the asset on his balance sheet. The Developer signs a Power Purchase Agreement (PPA) with the end user for a tenure ranging from 15 to 20 years. The solar energy generated is billed at a pre-determined tariff in Rs/kWh every month, and thus the solar energy becomes a Operational Expenditure for the end users in their Profit & Loss statement. The savings for the end user would thus depend on the difference between the DISCOM tariff and the tariff charged by the solar plant developer. The main advantage of this model for the end user, is the lack of investment required from their end, and that the entire operation and maintenance of the Plant is left to the developer. At the end of the PPA tenure, the Plant is transferred to the end user for a notional value. This model is also referred to as Build Own Operate and Transfer (BOOT) Model or Energy as a Service (EaaS) Model. Investment under this model by the Developers is subject to satisfactory credit evaluation of the end user. Contact us to know more in detail..