CAPEX MODEL FOR ROOFTOP SOLAR INSTALLATION

Under the CAPEX model (pursued by developers like Sukam, Moserbaer and Tata Power Solar), a consumer purchases a solar rooftop plant like any other electronic gadget by investing in the entire system. The drawback of the model is that rooftop owners have to pay for the entire project at the time of installation.
On the positive side of the CAPEX model, owners are eligible for capital subsidies from MNRE. In this model, the operations and maintenance (O&M) of the solar rooftop system is either with the rooftop owner or with the solar developer for the first few years, if stated in the contract. However, the subsidy is not available for commercial and industrial applications; instead, a tax benefit called accelerated depreciation (AD) is provided by the government. Under this scheme, the owner of the PV plant is allowed to depreciate most of the value of an asset in the first few years to reduce the tax liability of the company