Switching to solar energy is no longer just about saving electricity costs; it’s also about making the right financial decision. Two popular models dominate the solar industry in India and across the world – the CAPEX Model and the RESCO Model. Both come with unique advantages and challenges, and choosing the right one depends on your business goals, budget, and long-term vision.

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What is the CAPEX Model?

Under the CAPEX (Capital Expenditure) Model, the consumer invests in purchasing and installing the solar power plant. You pay the upfront cost, own the asset, and enjoy the benefits of solar savings for 20–25 years.

Advantages of CAPEX Model:

• Full ownership of the solar plant
• Maximum savings in the long run
• Accelerated depreciation and tax benefits
• Payback period as short as 3–5 years

Who Should Choose CAPEX?
Businesses or individuals with available capital and a long-term outlook benefit most from this model. It is ideal for organizations aiming to reduce operational costs while building a sustainable asset.

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What is the RESCO Model?

The RESCO (Renewable Energy Service Company) Model is a zero-investment option. Here, a third-party investor owns, operates, and maintains the solar power plant. Consumers only pay for the electricity generated, usually at a tariff lower than grid rates.

Advantages of RESCO Model:

• Zero upfront investment
• Hassle-free operation and maintenance
• Pay only for energy consumed
• Flexible contract terms

Who Should Choose RESCO?
This model is suitable for businesses that prefer no capital investment, want predictable energy costs, and are comfortable with long-term power purchase agreements (PPAs).

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CAPEX vs. RESCO – Which is Better?

The answer depends on your financial priorities.

• If you want maximum long-term savings, complete control, and can afford upfront investment, the solar capex model is better.
• If you prefer no upfront cost and a hassle-free arrangement, the RESCO model works best.

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Final Thoughts

Both models are powerful enablers of clean energy adoption. The CAPEX Model builds a strong financial asset, while the RESCO Model makes solar accessible without investment risks.

Before choosing, analyze your cash flow, energy needs, and business plans. Consulting a solar expert will help you identify which model aligns better with your goals.

Going solar is not just an energy decision; it’s a financial strategy – and choosing the right model ensures you maximize the benefits.