Benefits of Choosing the CAPEX Model for Solar Power Systems

With the increasing cost of electricity and growing awareness about clean energy, more homeowners, businesses, and industries in India are turning to solar energy as a viable long-term solution. One of the most preferred financing options for installing a solar system is the CAPEX model, short for Capital Expenditure model.

In the CAPEX model solar, the consumer pays upfront for the solar system and owns it entirely. While this model requires a significant initial investment, it comes with long-term financial and operational benefitsespecially in India, where government incentives and falling solar equipment costs make solar more accessible than ever.

In this blog, we will explore the key benefits of the CAPEX model for solar power systems in India, and why it's the most profitable approach for many.

What is the CAPEX Model in Solar?

Under the CAPEX model, the customer (homeowner, business, or industrial unit) purchases the solar power system outright. This includes paying for:

• Solar panels and inverters
• Installation charges
• Operation and maintenance (if not included as a service)

Once installed, the user owns the system and reaps the full benefits of the electricity it produces. This is in contrast to models like OPEX (Operational Expenditure) or RESCO, where a third-party owns the system and the user pays per unit of electricity consumed.

Why Is the CAPEX Model Popular in India?

The CAPEX model is widely adopted in India, especially by:

• Residential rooftop solar users
• Commercial and industrial (C&I) sectors
• Educational institutions, hospitals, and housing societies

The reasons are simplelower power bills, government subsidies, ownership control, and faster ROI.

Key Benefits of the CAPEX Model for Solar in India

1. Complete Ownership and Control

When you choose the CAPEX model, you fully own your solar power system. This offers:

• 100% of the savings on electricity bills
• No sharing of profits with third-party operators
• Full control over operation, maintenance, and upgrades

This is especially beneficial in Indias industrial and commercial sectors where electricity is a major operational expense.

2. Maximum Financial Savings Over Time

With CAPEX, you pay once and benefit for decades. A well-installed solar system in India typically offers:

• Payback in 35 years
• Free electricity for 2025 years after the payback period
• Protection from rising electricity tariffs

For commercial and industrial consumers who pay higher tariffs (?7?10 per unit), savings can be substantial, even more so with net metering in place.

3. Eligibility for Government Subsidies (Residential Sector)

The Government of India, under the Rooftop Solar Programme Phase II, offers up to 40% subsidy on residential rooftop solar systems:

• 40% subsidy for up to 3 kW systems
• 20% for 310 kW systems
• Applicable across individual homes and housing societies

This subsidy is only applicable under the CAPEX model, making it a highly attractive option for Indian homeowners.

4. Accelerated Depreciation Benefits (for Businesses)

Businesses opting for CAPEX solar in India can claim accelerated depreciation under Section 32 of the Income Tax Act, allowing:

• 40% depreciation in the first year (as of current policy)
• Major tax savings for profitable companies
• A direct boost in project IRR (Internal Rate of Return)

This makes CAPEX a smart investment tool for commercial and industrial enterprises in India.

5. Net Metering Advantages

Most Indian states have rolled out net metering policies, allowing solar users to:

• Export excess electricity to the grid
• Offset their electricity bills
• Carry forward unused credits

Net metering works best when you own the system, making the CAPEX model an ideal fit.

6. No Recurring Monthly Payments

In RESCO or leasing models, you continue to pay monthly charges or per-unit costs. With CAPEX:

• There's no monthly fee
• No risk of rising energy purchase prices
• Long-term savings are fully yours

This allows for predictable energy costs and a better control over financial planning.

7. Improves Asset and Property Value

Solar installations can boost your property value. Buyers are increasingly looking for energy-efficient, cost-saving homes. For industries and businesses, a solar-powered facility signals:

• Commitment to sustainability
• Better ESG (Environmental, Social, Governance) ratings
• Enhanced brand image in the market

Owning the solar system under CAPEX further increases the assets valuation.

8. Energy Independence and Security

Power cuts and voltage fluctuations are still common in many parts of India. With CAPEX solar:

• You generate your own power
• Reduce dependency on the grid
• Ensure business continuity and productivity
• Integrate with battery storage for backup and peak savings

Industries, data centers, and critical service providers greatly benefit from this stability.

9. Low Maintenance and Long Lifespan

Modern solar systems require minimal maintenance. With basic cleaning and periodic checks:

• Solar panels can last 25+ years
• Inverters last around 810 years (and are easily replaceable)

Since you own the system, you can choose your service partner or opt for Annual Maintenance Contracts (AMC) at affordable rates.

Who Should Choose the CAPEX Model?

The CAPEX model is ideal for:

? Homeowners eligible for government subsidies
? Industries and businesses with upfront capital
? Educational institutions, hospitals, and NGOs
? Builders and developers looking to offer green homes
? Housing societies aiming to reduce common electricity bills

Things to Consider Before Choosing the CAPEX Model

While the benefits are plenty, consider the following:

• Do you have the upfront capital for investment?
• Are you ready to manage or outsource maintenance?
• Is your site eligible for net metering and subsidy?
• Have you chosen a trusted and certified installer?

Answering these questions will help you make an informed decision.

Final Thoughts

The CAPEX model continues to be the most reliable, profitable, and ownership-driven option for solar adoption in India. Whether you're a homeowner looking to reduce your electricity bills or a business seeking long-term operational savings, CAPEX gives you full control, better ROI, and eligibility for financial incentives.

With falling solar prices, increasing electricity costs, and strong government support, there has never been a better time to go solar under the CAPEX model in India.

Looking to install a solar system under the CAPEX model?
Partner with a trusted solar installation company in India that provides consultation, subsidy support, and long-term service.

Let the sun fuel your savingsinvest smart, go solar.