What are the Benefits of the RESCO Model?

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Resco Model | CleanMax
Resco Model | CleanMax



Solar energy is a viable solution for the future. However, while opting for a solar solution, the type of business model should be selected with extreme caution. The choice of the model impacts the earning capacity and the overall risk of the solar plant installation. Typically, there are two prime types of solar solutions – CAPEX (capital expenditure model) and RESCO (renewable energy services company). Each has its advantages. Particularly, the RESCO model is highly popular, given its flexibility and other benefits.

About RESCO

RESCO model is a type of solar solution which involves the roof owner and the investor. In this, the RESCO company or the project developer owns the solar model and support finance, installation, operation, and maintenance of the plant. On the other hand, the roof owner does not contribute any investment and only pays for the electricity consumed at an agreed tariff and tenure.
Some key features of this solar model include:
·         The project is owned by the developer
·         There is zero-investment from the customer’s side
·         The consumer/roof owner only pays for the electricity used
·         Design, solar plant installation, and operation of the project is the prerogative of the firm
·         The cost of operations and management is borne by the developer
·         The model is highly flexible and can be easily scaled up
·         The risks of the project are borne by the developer
·         Tax advantages accrue to the developer and not the consumer

Benefits of RESCO model

1.       Less-capital intensive: The major advantage of this solar business model is the low requirement of capital in the case of the developer. There is no upfront payment, and the cost is relieved in a mutually beneficial manner in monthly instalments. The project owner can cover the cost of the project by selling the electricity generated to the roof owner, as well as to the utility companies.
2.       Reduced costs and risks: The RESCO model allows the consumer to save on the electricity bills and costs, by only paying a bare minimum for the solar power used. There is no upfront investment in the project, which also reduces the risk. Also, in some cases, the consumer can own the plant for a defined duration by paying a certain percentage of the overall investment.
3.       Transparency: In this form, there is better management of the consumption of energy due to the effective monitoring of load and consumption of power generated through energy data analytics.
4.       Government Support: The RESCO model receives a lot of grants, exclusions, tax-exemptions, etc. from the centre, as well as the state government to achieve the targeted 40GW Rooftop Capacity till 2022. Some special states offer up to 70% subsidy to these solar developers. 
5.       No operational cost: In terms of the consumer, there is no operation or maintenance cost to be borne. All operational, developmental, maintenance and repair expenses are to be carried out by the owner.
In RESCO, savings begin from the first day itself. With easy terms and cost viability, the model is a great choice for those aiming for regular cash generation, low risk, and high transparency.


CleanMax- rooftop solar developer

Comments

  1. TheUnitedIndianJuly 6, 2023 at 3:21 AM

    Great blog! The article provides an insightful overview of the numerous solar energy benefits. It effectively highlights how solar power is not only a sustainable and renewable energy source but also a cost-effective solution that can save money in the long run.

    ReplyDelete

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