Switching to solar power is a commendable move for your business, and a cost-effective one too in the long run. However, there are a lot of underlying technicalities you need to know before making the final move to go green.
When you are considering buying solar power, you would generally find two options in the market – Investing into a rooftop solar plant or buying solar power under a power purchase agreement (PPA). Both the options can be availed under two models: the capital expenditure (CAPEX) model or the operating expenditure (OPEX) model. In this section, we help you make an informed decision by highlighting the differences between the two in terms of their merits and disadvantages, and which model suits your business better.
|Ownership||CleanMax owns the asset||Ownership||Customer owns the asset|
|Investment||Zero upfront investment by the customer. Can instead invest that capital into its core business.||Investment||100% investment borne by customer.|
|Quickly replicable and scalable because additional projects don’t need internal CAPEX approvals||Management
|Typically requires long lead time for CAPEX approvals at senior management level.|
|Consumption||Pay only for electricity generated, no hidden costs||What you pay for||Pay only for O&M charges after system purchase, no tariff for solar electricity generated|
|Per Unit Savings||20-40% cheaper than Grid electricity Tariff||Per Unit Savings||Capital repaid through generated electricity|
|O&M||Turnkey solution, therefore CleanMax bears O&M cost||O&M||Customer pays separately for O&M|
|Payback||Savings from day 1 (Zero days)||Payback||As high as 4 years|
|CleanMax handles all technical matters||Techincal
|Dedicated team needed at customer’s end to evaluate system design, installation and operation|
|Performance Risk||CleanMax bears all the performance risk and is incentivized to maximized generation because revenues are linked entirely to generation||Performance Risk||Customer bears all the performance risk and must manage equipment & downtime losses|
|Tax Benefits||No Tax benefits for customer||Tax Benefits||Customer can claim tax benefit through accelerated depreciation|
|Regulatory Risk and Approvals||CleanMax prerogative||Regulatory Risk and Approvals||Owners prerogative|