---
title: CAPEX vs OPEX Solar: Which Pays? | Arrays Ingenieria
description: Own the plant (CAPEX) or pay per unit (OPEX, RESCO, PPA)? Cost, savings, depreciation, risk and contracts compared for Indian businesses in 2026.
url: https://arraysingenieria.com/capex-vs-opex-solar/
last_updated: 2026-10-11
source: Arrays Ingenieria (Arrays Ingenieria Pvt. Ltd.)
---

Guide · Business Models

# CAPEX vs OPEX (RESCO) Solar: Which Model Suits Your Business?

Own your solar plant and keep every unit, or pay a developer per unit with no upfront cost? A side-by-side comparison of CAPEX and OPEX solar, with the numbers that decide it.

On this page

- The two models in one minute
- Side-by-side comparison
- The numbers that decide it
- What to check in an OPEX or PPA contract
- Which model for which business
- Frequently asked questions
- Sources

By the [Arrays Ingenieria engineering team](https://arraysingenieria.com/about/) · Updated 11 Oct 2026 · 3 min read

**Key takeaways**

- **CAPEX:** you pay for the plant, own it, keep all the savings and claim 40% depreciation
- **OPEX / RESCO:** a developer builds and owns the plant and sells you power per unit, usually for 15 to 25 years
- CAPEX gives the highest lifetime savings; OPEX preserves cash and moves performance risk to the developer
- Contract length, exit clauses, roof or land rights and tariff escalation decide whether an OPEX deal is good
- Arrays Ingenieria builds on the CAPEX model and installs for developers who run OPEX projects

## The two models in one minute

Under **CAPEX** (capital expenditure) you buy the plant. An EPC contractor designs, supplies, builds and commissions it; you own it from day one, and every unit it generates is power you do not buy from the grid.

Under **OPEX**, also called RESCO (renewable energy service company) or a PPA (power purchase agreement), a developer builds and owns the plant on your roof or land and sells you its power at an agreed tariff per unit for a long term. You pay nothing upfront, but you share the savings with the developer.

## Side-by-side comparison

CAPEX and OPEX solar compared

| Factor | CAPEX (you own) | OPEX / RESCO / PPA (developer owns) |
| --- | --- | --- |
| Upfront cost | Full plant cost | None or minimal |
| Who owns the plant | You | The developer, for the contract term |
| Savings on power bill | Highest: every unit is yours | Lower: you pay the PPA tariff per unit |
| Depreciation (40% WDV) | You claim it | Developer claims it |
| Operation and maintenance | Your responsibility (or an O&M contract) | Developer's responsibility |
| Performance risk | Yours (protected by warranties) | Developer's (you pay only for units delivered) |
| Contract term | EPC contract plus warranties | Typically 15 to 25 years |
| Balance sheet | Asset on your books | Usually an operating expense |
| Typical payback | About 3 to 5 years for C&I | Not applicable; savings from day one |

## The numbers that decide it

### Your tariff and your tax position

The higher your grid tariff and the more of the day your site consumes power, the faster a CAPEX plant pays back. A business paying corporate tax gains more from depreciation (see [our depreciation guide](https://arraysingenieria.com/accelerated-depreciation-solar/)).

### Your cost of capital

If cash is tight or reserved for core expansion, OPEX lets you start saving without spending. Some businesses fund CAPEX plants with term loans; banks lend readily against solar because the savings are predictable.

### Your horizon on the site

If you own the building or land and will be there for 25 years, CAPEX usually wins. If your lease is short, an OPEX contract that matches the lease, or a CAPEX plant designed to be relocated, may suit better.

## What to check in an OPEX or PPA contract

- **Tariff and escalation:** a fixed tariff or a small escalation; compare it with your grid tariff path.
- **Term and early exit:** the buy-out price if you sell the building or want to own the plant early.
- **Minimum offtake:** whether you must pay for units you cannot use (for example on holidays).
- **Roof and land rights:** access, roof repairs and what happens if you need to re-roof.
- **Performance guarantee:** a generation guarantee and compensation for shortfall.
- **End of term:** whether the plant transfers to you, and in what condition.

## Which model for which business

A quick guide

| Your situation | Usually better |
| --- | --- |
| Profitable business, owns the site, wants the highest lifetime savings | CAPEX |
| Tea estate with land and steady factory load in the season | CAPEX (ground-mount) |
| Cash-constrained, or capital reserved for core expansion | OPEX / PPA |
| Short lease on the premises | OPEX matched to the lease, or a relocatable CAPEX plant |
| Developer or EPC major needing site crews | Hire an I&C partner |

We build on the CAPEX model for owners, and we are the [installation & commissioning](https://arraysingenieria.com/solar-installation-commissioning/) partner for EPC companies and developers who run OPEX and utility projects, so we see both sides.

Jay Shree Tea's 1035 kWp across Towkok and Manjushree Tea Estates: a CAPEX ground-mount project built under Tata Power's EPC, with DG synchronisation at each estate.

Tell us your bills, roof or land, and plans; we will show you CAPEX numbers you can compare with any PPA offer.

[Get a free solar quote](https://arraysingenieria.com/free-solar-quote/)

## Frequently asked questions

What is the difference between CAPEX and OPEX solar?

Under CAPEX you pay for and own the plant and keep all its savings. Under OPEX (RESCO or PPA) a developer owns the plant and sells you its power per unit with no upfront cost.

Which is cheaper over 25 years?

CAPEX, because you do not pay the developer's margin on every unit and you claim depreciation. OPEX trades some of that saving for no upfront cost and less performance risk.

Can I switch from OPEX to owning the plant later?

Many PPAs include a buy-out option at set points in the term. Check the buy-out schedule before you sign.

Does Arrays Ingenieria offer OPEX or PPA?

No. We build CAPEX plants that you own, and we install and commission plants for developers and EPC companies that offer OPEX.

## Sources

- [Taxguru: Depreciation under the Income-tax Act, 2025](https://taxguru.in/income-tax/depreciation-income-tax-act-2025-section-34-rates-provisions.html)
- [pv magazine India, 4 Sep 2025: GST on solar cells, modules cut to 5%](https://www.pv-magazine-india.com/2025/09/04/gst-on-solar-cells-modules-cut-to-5/)

This guide explains public policy in plain language for planning purposes. Rules, rates and deadlines change: confirm the current position with the notifying authority, your DISCOM and your tax adviser before you commit. Last checked 11 Oct 2026.

**About the authors.** Arrays Ingenieria is an ex-servicemen-led solar EPC and installation & commissioning company working Pan-India, from Assam's tea estates to industrial rooftops. [Our story](https://arraysingenieria.com/ex-servicemen-led-msme/) · [Our projects](https://arraysingenieria.com/projects/)

[CAPEX Solar EPC](https://arraysingenieria.com/capex-solar-epc/)[Installation & Commissioning](https://arraysingenieria.com/solar-installation-commissioning/)

From Our Sites

## Case Studies on This Topic

Real plants our veteran-led crews have built, with the scope of work in detail.

[Tea Estate · Ground-Mount: **Jay Shree Tea: 1 MW Solar at Towkok & Manjushree Tea Estates**1035 kWp (535 + 500 kWp) · Sonari, Charaideo district, AssamRead the case study](https://arraysingenieria.com/project-jayshree-tea-1mw-solar-assam/)[Industrial · Rooftop: **Super Smelters: 1980.3 kWp Rooftop Solar Plant**1980.3 kWp (about 2 MW) · Jamuria (Asansol), West BengalRead the case study](https://arraysingenieria.com/project-super-smelters-1980kwp-rooftop-solar/)[Industrial · Rooftop I&C: **Balaji Action Buildwell, Sitarganj: Solar I&C, BOS and Civil Works**4000.32 kWp project (as described in the BOS order) · Sitarganj, UttarakhandRead the case study](https://arraysingenieria.com/project-balaji-action-sitarganj-4mwp-solar/)

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