The RESCO model solar is one method for installing rooftop solar cells. Under the RESCO model, the renewable energy service business develops, installs, finances, manages, and owns the rooftop solar power project. The electricity produced by the project is either supplied to the grid or to the consumer whose property the project is placed on. Let us understand in detail what is solar RESCO Model.
What is RESCO Full Form? What is a RESCO Model Solar? What is Solar RESCO Model?
An ESCO electricity service provider known as a Renewable Energy Service Company stands for RESCO full form it provides electricity to customers using renewable energy sources.
The RESCO model solar or solar RESCO Model is a zero-investment method in which the user only pays for the electricity that is made, but the RESCO operator owns the solar plant.
The PPA’s terms state that the Customer must use the energy generated by the Project and compensate the RESCO at a predetermined rate. The customer views the RESCO model as the less expensive option when contrasting it to the CAPEX model, in which the project is held by the rooftop owner. The Customer only has to pay for the electricity produced under the RESCO model; no up-front expenses are needed. This explains what is solar RESCO model.
What are the Advantages Associated with RESCO?
1. The RESCO is exclusively in charge of running, caring for, and fixing the Project throughout the PPA in accordance with the RESCO model.
2. The RESCO has the option to sell any unused energy generated by the Project to the grid at competitive feed-in tariff rates, subject to state regulations. As a result, the RESCO receives payment from the utility for the extra electricity it injects into the grid in addition to getting payment from the customer for the electricity they use.
3. RESCOs keep an eye on the load and consumption of the power generated by the Project in addition to energy data analytics.
Also Read: How Does a Solar PPA Work?
What is the Risk Associated with RESCO?
In some jurisdictions, net metering is capped, which poses a threat to RESCOs. The RESCO is exclusively in charge of running, caring for, and fixing the Project throughout the PPA in accordance with the RESCO model. For example, the RESCO model is not supported by the net metering rules in certain states. The rules forbid private developers from installing Projects using the RESCO model.
What is BOOT Model in Solar?
You will undoubtedly be trying to cut costs whether you are managing a school, hospital, business, or shopping center. Electricity Bills will undoubtedly be on your list of ways to cut costs.
While the amount of electricity your institution uses relies on the type of business you operate, the fees you pay are determined by the fixed tariff your distribution company has set. Without a doubt, you would have considered using a rooftop solar system to generate your own energy. But the cost of building solar farms is high. Solar prospect is pushed to the side as your main business activity receives priority funding.
The BOOT Model in solar stands for Build Own Operate Transfer. Pay as you save from a photovoltaic solar power initiative is the idea behind solar energy’s RESCO or BOOT Model. The projects would be governed by a Power Purchase Agreement (PPA) for a duration spanning from 10 to 20 years.
In the RESCO model, the consumer must pay for electricity on a per-unit basis rather than making an upfront payment. In the local micro utility model, the customer can sublet his rooftop to a project developer and receive monthly rent. Many new opportunities will arise as India’s parity-based market expands, and many business models already have extensive expertise in this new potential business sector.
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What is the Difference Between RESCO and OPEX Model?
Among What Questions to Ask Before Getting Solar Panels? One such important question is understanding What is the difference between RESCO and OPEX model? But first here is why going solar will provide enormous benefits:
1. Affordable Power: Solar power systems are an affordable option for generating electricity and, in some instances, they can help reduce or eliminate monthly utility costs.
2. Alternative Energy: producing energy from fossil fuels that emit no carbon gases and helps to reduce air pollution more significantly.
3. Easily Maintained: Following the implementation of a solar system, Galaxy Solar guarantees to provide the proper maintenance, at a low cost.
4. Eco-friendly: Preventing the use of fossil fuels will help the environment last for future years. Go Solar, Be Green.
The Model for RESCO
In a hybrid approach known as Renewable Energy Services/Supply Company (RESCO), the solar PV plant is financed by both the owner of the rooftop and a third party. The rooftop solar power plant is financed, installed, run, and maintained by the RESCO operator. A contract is signed between the rooftop proprietor and the developer. The rooftop owners have the option to use the energy produced, but they must pay the RESCO developer a predetermined tariff on a monthly basis for the duration of the arrangement.
Benefits of the RESCO Model:
a. Less capital intensive.
b. Government assistance.
c. The owner gains from the installation in the form of reduced energy costs.
d. The business will manage the Solar PV system’s operations, upkeep, and repairs, and the investor will pay for everything.
The Model for OPEX
A Renewable Energy Service Company (RESCO) invests in, constructs, and maintains an on-site solar plant under the OPEX model. A long-term power purchase agreement (PPA) specifies a fixed tenure and agreed-upon tariff for the customer to pay for the electricity generated by the PPA.
Since the customer only pays for the energy generated and no major asset-based investment is required up front, the OPEX model reduces the investment and performance risk associated with a Capex model. Because of this, even with a PPA, electricity is much less expensive than grid power.
When using the OPEX model, which is also referred to as a third-party ownership model, customers only supply the locations for the solar power plant. In comparison, a solar power company or investors own and run the plant. The business enjoys significant risk-free savings because there are no investments required and no performance risks related to them.
The partner is responsible for the system’s overall administration and maintenance for the predetermined length of time. Since the ownership of the asset is returned to the customer at no additional expense following the PPA contract, the OPEX model is also known as the BOOT model (Build Own Operate Transfer).
Also Read: Jinko vs Sunpower Solar Panels
Benefits of the OPEX Model:
a. There is no longer a need to make a sizable upfront expenditure on equipment that won’t pay off for years.
b. Financial projections are steady and dependable with monthly subscription billing.
c. Since the equipment maintenance and repair are not the customer’s responsibility, they are not required to hire extra service contracts or keep on-staff service technicians.
d. The OEM (Original Equipment Manufacturer) or service provider will typically be in charge of uptime and ensuring that SLAs (Service Level Agreements) are met since they are only paying for usage.
Numerous variables, including capital investment, operation & maintenance, and technical expertise, influence the decision-making process when it comes to comprehending the solar RESCO model, the BOOT model in solar and what is the difference between RESCO and OPEX models. However, it cannot be denied that these solar energy models contribute to sustainability.
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