Difference Between Capex and Resco model

In India principally there are two major business models:
1. Capex: Capital expenditures are provided by the rooftop owner;
2. Resco: Capital expenditures are covered by third party.

CAPEX Model

CAPEX mode is the most common business model for solar deployment in India. In this model the consumer purchases the solar system, by making 100% of the payment upfront or financing the system, often through a bank.

RESCO Model

Under this model, a RESCO developer finances, installs, operates and maintains the rooftop solar power plant. The developer signs an agreement with the rooftop owner. The rooftop owners may consume the electricity
generated, for which they have to pay a predecided tariff to RESCO developer on a monthly basis for the tenure of the agreement. Based on the consumption choice and requirement, the model is further divided into
two types – Rooftop Leasing and Power Purchase Agreement (PPA).