Compare OPEX Vs CAPEX Models - CleanMax

Compare OPEX Vs CAPEX Models

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.

OPEX

Build-Own-Operate

CAPEX

EPC

COMPARISION

# OPEX CAPEX
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.
Management
Approval Timelines
Quickly replicable and scalable because additional projects don’t need internal CAPEX approvals Management
Approval Timelines
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
Techincal
Know How
CleanMax handles all technical matters Techincal
Know How
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

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