OPEX Vs CAPEX
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.
APEIRON owns the asset.
OWNERSHIP
Customer owns the asset
Zero upfront investment by the customer. Can instead invest that capital into its core business.
INVESTMENT
100% investment born by customer
Quickly replicable and scalable because additional projects don’t need internal CAPEX approvals
MANAGEMENT APPROVAL TIMELINES
Typically requires long lead time for CAPEX approvals at senior management level.
Pay only for electricity generated, no hidden costs
WHAT YOU PAY FOR
Pay only for O&M charges after system purchase, no tariff for solar electricity generated
20-40% cheaper than Grid electricity Tariff
PER UNIT SAVING
Capital repaid through generated electricity
Turnkey solution, therefore CleanMax bears O&M cost
O&M
Customer pays separately for O&M
Savings from day 1 (Zero days)
PAYBACK
As high as 4 years
APEIRON handles all technical matters
TECHNICAL KNOW HOW
Dedicated team needed at customer’s end to evaluate system design, installation and operation
APEIRON bears all the performance risk and is incentivized to maximized generation because revenues are linked entirely to generation
PERFORMANCE RISK
Customer bears all the performance risk and must manage equipment & downtime losses
No Tax benefits for customer
OWNERSHIP
Customer can claim tax benefit through accelerated depreciation
APEIRON prerogative
REGULATORY RISK AND APPROVALS
Owners prerogative