Top 5 States for Solar Power Generation in India
Jun 1, 2024
4 min read
A solar power plant can cut your electricity costs for the next 20-25 years - but only if you choose the right financing model.
Many businesses rush into solar without fully understanding CAPEX vs OPEX, and later realise their savings aren’t what they expected. Is it better to invest upfront and own the system, or pay per unit with zero capital risk?
You'll find what CAPEX and OPEX are, compare them in terms of cost, tax benefits, and long-term savings, and help you decide which solar power financing model saves more for your business in India.
What are CAPEX and OPEX?
CAPEX (Capital Expenditure Model)
The business owns the solar power plant.
Full project cost is paid upfront.
Electricity generated is essentially free, apart from minimal O&M costs.
Commonly used by companies with surplus capital and long-term energy planning.
OPEX (Operating Expenditure Model)
A third-party developer owns the solar plant.
The business pays only for the electricity consumed, at a pre-agreed tariff.
No upfront investment required.
Ideal for companies wanting savings without asset ownership.
In short, CAPEX = ownership, OPEX = pay-per-unit convenience.
Financial Comparison: Upfront Costs, Tax Benefits & Long-Term Savings Analysis
Criteria | CAPEX Model | OPEX Model |
Upfront Cost | High upfront investment required. | No upfront investment needed. |
System Ownership | The business owns the solar system. | The third party owns the system. |
Tax Benefits | Eligible for depreciation benefits. | No tax benefits for the user. |
Electricity Cost | Power cost becomes very low over time. | Power is bought at a fixed tariff. |
Long-Term Savings | Higher lifetime savings. | Moderate but steady savings. |
Maintenance | Business handles maintenance. | The developer handles maintenance. |
Risk Level | Higher responsibility and risk. | Lower risk for the business. |
Which Model Suits Your Business? Industry-Wise Recommendations in India
Large Manufacturers & Heavy Industry:
Better suited to CAPEX: High daytime energy use and ability to leverage tax benefits make ownership more cost-effective over time.
Commercial Buildings & Office Parks
CAPEX or OPEX: If the business has capital, CAPEX delivers long-term savings; if not, OPEX offers predictable payments with no investment risk.
Small & Medium Enterprises (SMEs)
Often prefer OPEX: Zero upfront cost and reduced operational risk make solar accessible for cash-constrained businesses.
Leased Properties & Startups
OPEX is attractive: No investment and minimal responsibilities make this model ideal when premises or business plans are not long-term.
Conclusion
There is no one-size-fits-all answer in the CAPEX vs OPEX debate. If you want maximum long-term savings, tax benefits, and full control, then CAPEX often delivers higher lifetime value. If you want zero upfront cost, low risk, and predictable payments, then OPEX may be the better choice for your business. Both models allow you to reduce electricity expenses and embrace clean energy - it ultimately comes down to your capital availability, risk appetite, and strategic goals.
How JJ PV Solar Can Help Your Business
At JJ PV Solar, we help businesses choose the right solar solution by evaluating their energy needs, financial goals, and long-term plans. Our experienced team manages everything - from site assessment and system design to installation and performance monitoring - ensuring your solar project delivers consistent output and reliable savings. With a focus on quality execution and long-term support, JJ PV Solar helps businesses make solar power a dependable and value-driven investment.
