Solar Opex Model Explained: How Solar PPAs Cut Costs & Increase Business Profits

Solar Opex Model Explained: How Solar PPAs Cut Costs & Increase Business Profits

For businesses looking to adopt solar energy without heavy upfront investment, the Opex Model has emerged as a game-changer. Also known as the RESCO Model or Solar PPA (Power Purchase Agreement), this approach allows companies to enjoy clean, affordable energy while keeping their capital free for core operations.

In this blog, we’ll explain how the Solar Opex Model works, why it’s growing in popularity, and how it can cut costs and boost profits for businesses.

What is the Solar Opex Model?

In the Opex Model, a third-party investor (usually a Renewable Energy Service Company – RESCO) installs, owns, and maintains the solar plant on the consumer’s premises. The business does not pay any upfront capital. Instead, it buys the generated electricity at a fixed tariff through a long-term Power Purchase Agreement (PPA), usually ranging from 10–25 years.

This way, the consumer avoids large capital expenditure, reduces dependency on grid power, and pays only for the energy consumed.

Key Features of the Solar Opex Model

• Zero upfront investment – The RESCO funds the solar plant.
• Pay-per-unit model – Businesses are charged only for the energy consumed.
• Long-term PPA – Stable energy pricing for years ahead.
• Operation & Maintenance included – All plant upkeep is handled by the service provider.
• Scalability – Companies can expand their solar usage without financial burden.

How Solar PPAs Cut Costs

1. Cheaper than grid power
   Solar tariffs under PPAs are usually 20–40% lower than prevailing grid rates, directly reducing energy bills.

2. No maintenance cost
   Since the RESCO handles all O&M expenses, businesses save on technical