Who this guide is for: business consumers comparing options, new EPCs structuring offers, and investors deciding where to play.
What you’ll get: a clean side-by-side comparison, model-by-model breakdowns, and a fast decision framework you can actually use.
Choose the Right Solar Deployment Model for Your Business
TL;DR: Your choice comes down to three levers — who owns the asset, how you pay, and how much policy or market risk you’re willing to take on. Skim the table, then focus on the models that align with your balance sheet and risk appetite.
| Model | Ownership | How you pay | Typical term | Upfront cost | Best for | Key risks |
|---|---|---|---|---|---|---|
| CAPEX (self-owned EPC) | Buyer | Capex + O&M/AMC | 25 years | High | Maximum lifetime savings, full control | Performance and O&M risk on buyer |
| OPEX/RESCO PPA (onsite) | Developer | ₹/kWh delivered (often with escalator) | 10–25 years | Nil | Cash-light buyers, predictable tariffs | Lock-in, tariff path vs future grid prices |
| BOOT | Developer, then Buyer | ₹/kWh during term; pre-priced transfer | 10–25 years | Nil to low (buyout later) | Eventual ownership without capex today | Buyout math, handover quality |
| BOO | Developer | ₹/kWh | 15–25 years | Nil | Long-term energy outsourcing | Fixed tariff vs falling market prices |
| BOT | Developer, then Buyer | Energy or capacity fee; transfer at end | 5–20 years | Low at transfer | Campuses, industrial parks | Transfer standards, residual life |
| Operating Lease | Lessor | Fixed rent (time-based) | 5–10 years | Low | Simpler paperwork and accounting | Rent not tied to generation |
| Finance Lease / Hire Purchase | Lessee (effective) | Lease EMIs; title later | 5–10 years | Low–medium | Ownership via financing | Balancesheet impact, residual value |
| Energy as a Service (EaaS) | Provider | ₹/kWh and/or service fee with SLAs | 5–15 years | Low | Outsourced performance with guarantees | SLA enforcement, indexation |
| Shared-Savings ESCO | Provider | Share of measured savings vs baseline | 3–7 years | Low | Efficiency bundles; PV+efficiency mixes | Baselining and M&V disputes |
| Third-Party Open-Access PPA (offsite) | Generator | ₹/kWh + grid charges/surcharges | 10–25 years | Nil | Large, stable loads across sites | Policy and charge volatility |
| Group-Captive (India) | SPV with consumers | ₹/kWh + equity return | 10–25 years | Equity stake (≥26%) | Tariff benefits, control | Compliance (≥51% offtake), exits |
| Virtual PPA / CfD | Buyer (financial) | Settle difference vs market price | 10–15 years | Nil | RE claims, hedging without physical power | Basis risk, accounting, and credit |
| Community Solar Subscription | Project owner | Subscription; bill credits | 1–20 years | Nil | Tenants/SMEs without roofs | Program rules, credit rate changes |
1) CAPEX (self-owned, EPC)
What it is: You fund the plant; an EPC designs and builds; you own it from day one.
How it works: Pay capex upfront (or via debt). Sign AMC/O&M for uptime and cleaning.
Pros: Maximum control and lifetime savings; incentives accrue to you.
Watch-outs: You must face the Performance and O&M requirements, which necessitate oversight.
Best fit: Strong balance sheets, long-term site control, energy-savvy operations.
2) OPEX / RESCO PPA (onsite)
What it is: A third-party-owned system on your site that sells you energy at an agreed tariff.
How it works: You pay per kWh consumed, often with an annual tariff escalator and uptime guarantees included.
Pros: Zero capex; performance risk is largely on the developer.
Watch-outs: Contract lock-in; compare tariff path vs expected grid tariffs.
Best fit: Buyers prioritizing cash conservation and predictable energy costs.
3) BOOT (Build-Own-Operate-Transfer)
What it is: Developer owns and operates through the term, then transfers the asset.
How it works: PPA during term; transfer occurs via pre-agreed buyout or nominal price.
Pros: No upfront spend, clear path to eventual ownership.
Watch-outs: Buyout valuation, condition at transfer, and remaining useful life.
Best fit: Users wanting ownership later without capex today.
4) BOO (Build-Own-Operate)
What it is: Classic long-term PPA with no transfer; developer owns for life.
How it works: Per-kWh billing, SLAs for performance/availability.Pros: Minimal operational burden on buyer.
Watch-outs: Tariff rigidity vs market evolution.
Best fit: Organizations that prefer simplicity over asset ownership.
5) BOT (Build-Operate-Transfer)
What it is: Concession-style: developer builds and operates for a fixed period, then hands over.
How it works: Payments can be energy-based or capacity-based; clear end-of-term transfer.
Pros: Defined handover timing and responsibility.
Watch-outs: Handover standards, warranty continuity.
Best fit: Campuses, SEZs, and industrial parks with long concessions.
6) Operating Lease
7) Finance Lease / Hire Purchase
What it is: A Lease designed to transfer most risks/rewards and end in ownership.
How it works: EMIs over the term; title passes at the end or for a token price.Pros: Ownership through spread payments; predictable cash flows.
Watch-outs: On-balance-sheet treatment; interest and residual assumptions matter.
Best fit: Buyers wanting control with limited upfront cash.
8) Energy as a Service (EaaS)
What it is: Essentially, it’s one comprehensive contract that covers delivered energy along with O&M, monitoring, warranties, and SLAs — all bundled under a single agreement.
How it works: In this model, you pay per kWh and/or a fixed service fee, while outcomes and penalties are clearly defined upfront to ensure transparency and accountability.
Pros: As a result, this structure promotes clear accountability, strong performance orientation, and consistent service quality across the project lifecycle.
Watch-outs: However, it’s crucial to carefully review SLA definitions, indexation clauses, and uptime penalties before signing — these small details can significantly affect long-term costs.
Best fit: Overall, this model works best for corporations that prefer to outsource energy management end-to-end, focusing on outcomes rather than system ownership.
9) Shared-Savings ESCO
What it is: Provider gets paid from measured bill reductions against a baseline.
How it works: You share verified savings; it requires formal M&V and baseline adjustments.
Pros: Pay when you save; great for efficiency bundles.
Watch-outs: Complex baselining; disputes if load or tariffs change.
Best fit: Retrofits with strong metering and stable baselines; PV paired with efficiency.
10) Third-Party Open-Access PPA (offsite)
What it is: Power from a remote plant is wheeled to your facilities via the grid.
How it works: Pay PPA tariff plus transmission, wheeling, losses, and state surcharges.
Pros: Scale and often sharper tariffs than rooftop for large loads.
Watch-outs: Policy volatility, banking limits, curtailment risk.
Best fit: Large, stable consumers, multi-site footprints, high daytime demand.
11) Group-Captive (India)
What it is: In this model, consumers hold at least 26% equity and must consume 51% or more of the project’s output, ensuring both ownership and active participation.
How it works: Here, the tariff blends the PPA rate with equity returns, and in some cases, specific charge exemptions may also apply, enhancing cost efficiency.
Pros: As a result, it offers a tariff advantage along with governance rights, giving investors both savings and control.
Watch-outs: However, it demands strict compliance discipline, especially during onboarding or exit of co-owners.
Best fit: Overall, it suits single anchor consumers or consortia willing to invest equity for greater control and long-term savings.
12) Virtual PPA / Contract-for-Differences
What it is: Financial hedge on project output; you don’t take physical power.
How it works: Settle the difference between a fixed strike and market price; claim RE attributes.
Pros: RE claims without site or utility changes; portfolio hedging.
Watch-outs: Basis risk, mark-to-market volatility, accounting treatment.
Best fit: Corporates with market access and ESG targets needing flexibility.
13) Community Solar Subscription
What it is: Subscribe to a share of a shared solar farm and receive bill credits.
How it works: Month-to-month or term subscriptions; credits follow program rules.
Pros: No roof required; low commitment.
Watch-outs: Credit rates, program caps, portability if you move.
Best fit: Tenants, SMEs, and public entities without suitable sites.
How to choose: a fast decision framework
- Cash today
- Zero capex: OPEX/RESCO, BOO/BOOT, Open-Access, Group-Captive, Virtual PPA, Community Solar.
- Own the asset: CAPEX or Finance Lease.
- Zero capex: OPEX/RESCO, BOO/BOOT, Open-Access, Group-Captive, Virtual PPA, Community Solar.
- Tariff certainty vs upside
- Highest certainty: Onsite PPA with defined escalator; Operating/Finance Lease.
- Upside potential: CAPEX, Group-Captive (equity returns).
- Highest certainty: Onsite PPA with defined escalator; Operating/Finance Lease.
- Policy exposure tolerance
- Low: Onsite CAPEX or Onsite PPA.
- Medium–High: Open-Access, Group-Captive, Virtual PPA (market basis risk).
- Low: Onsite CAPEX or Onsite PPA.
- Site constraints
- No roof/land: Open-Access, Group-Captive, Virtual PPA, Community Solar.
- Good roof with long lease/ownership: CAPEX, Onsite PPA, BOOT.
- No roof/land: Open-Access, Group-Captive, Virtual PPA, Community Solar.
- Desire for ownership
- Want to own: CAPEX, BOOT, Finance Lease.
- Don’t need to own: BOO, OPEX/RESCO, Open-Access, Virtual PPA.
Negotiation checklist (use this to avoid regrets)
1. Tariff Path: Define the starting tariff, escalator, and indexation method. Set clear caps or floors to manage long-term cost visibility.
2. Performance Guarantees: Include PR or availability targets, degradation assumptions, and compensation terms for underperformance.
3. Take-or-Pay / Minimum Offtake: Specify minimum offtake levels and relief clauses for force majeure or maintenance periods.
4. Metering & Settlement: Agree on meter class, loss assumptions, and reconciliation timelines for transparent billing.
5. Change in Law / Pass-Throughs: Clarify how regulatory or policy changes affect cost-sharing between buyer and seller.
6. Buyout / Transfer (BOOT/BOT): Define the buyout formula, condition standards, and warranties at transfer to ensure fair valuation.
7. Exit & Termination: Set break fees, step-in rights, and obligations for removal or roof restoration after exit.
8. Insurance & HSE: Outline property, liability, and business interruption coverage, plus roles under HSE standards.
9. Roof Rights & Lifecycle Works: Fix access windows, re-roofing coordination, and relocation responsibilities to avoid disputes.
10. REC / Attribute Ownership: State who owns Renewable Energy Certificates (RECs) and how they’re claimed or retired.
FAQs
RESCO is the most common OPEX format for solar: it’s third-party owned with per-kWh billing under a Power Purchase Agreement (PPA).
No. PPAs guarantee a tariff and service terms. Actual savings depend on your grid tariff, usage profile, and applicable policy charges.
Only at renewal or through buyout/transfer clauses such as BOOT or BOT. Always review the valuation method carefully before signing.
Onsite RESCO PPA is ideal for zero capex and operational simplicity. Choose CAPEX if you can fund and manage O&M for higher lifetime savings.
Your landed cost will change. Always model sensitivity for surcharges, banking limits, and transmission losses before closing the deal.