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OPEX vs CAPEX
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OPEX vs CAPEX
Switching to solar power is a commendable move for your business, and a cost-effective one too in the long run. However, there are a lot of underlying technicalities you need to know before making the final move to gogreen.
When you are considering buying solar power, you would generally find two options in the market – Investing into a rooftop solar plant or buying solar power under a power purchase agreement (PPA). Both the options can be availed under two models: the capital expenditure (CAPEX) model or the operating expenditure (OPEX) model. In this section, we help you make an informed decision by highlighting the differences between the two in terms of their merits and disadvantages, and which model suits your business better.
OWNERSHIPINVESTMENTMANAGEMENT APPROVAL TIMELINESWHAT YOU PAY FORPER UNIT SAVINGO&MPAYBACKTECHNICAL KNOWHOWPERFORMANCE RISKTAX BENEFITSREGULATORY RISK AND APPROVALS
OPEX
Baritech Infra owns the asset
CAPEX
Customer owns the asset
OPEX
Zero upfront investment by the customer. Can instead invest that capital into its core business.
CAPEX
100% investment borne by customer
OPEX
Quickly replicable and scalable because additional projects don’t need internal CAPEX approvals
CAPEX
Typically requires long lead time for CAPEX approvals at senior management level
OPEX
Pay only for electricity generated, no hidden costs
CAPEX
Pay only for O&M charges after system purchase, no tariff for solar electricity generated
OPEX
20-40% cheaper than Grid electricity TariffCAPEX
Capital repaid through generated electricity
OPEX
Turnkey solution, therefore Baritech Infra bears O&M cost
CAPEX
Customer pays separately for O&M
OPEX
Savings from day 1 (Zero days)
CAPEX
As high as 4 years
OPEX
Baritech Infra handles all technical matters
CAPEX
Dedicated team needed at customer’s end to evaluate system design, installation and operation
OPEX
Baritech Infra bears all the performance risk and is incentivized to maximized generation because revenues are linked entirely to generation
CAPEX
Customer bears all the performance risk and must manage equipment & downtime losses
OPEX
No Tax benefits for customer
CAPEX
Customer can claim tax benefit through accelerated depreciation
OPEX
Baritech Infra prerogative
CAPEX
Owners prerogative
Baritech Infra Private Limited
Corporate Office: SCO-17, Second Floor, Sector-23A, Gurgaon -122017 India
Regional Office: Unit No. 7068, 7th Floor Currency Tower, VIP Road, Raipur 492001 Chhattisgarh
Phone: +91 88188 59265
Email: sales@baritech.co.in