Detailed comparison of capex vs opex Solar Power Project

1. EFFICORE CONFIDENTIAL 1
Detailed Comparison of Capex vs Opex
CAPEX OPEX
Investment
Upfront Investment in the solar Asset having life of more than
25 years. Payback in year 6-7 after which Cost of Generation
of Solar Power goes down to ~ Rs 1 / kWh
Zero Upfront costs, procure power at rates cheaper than
existing grid rates and enjoy savings for the term of PPA
(usually 25 years) from day 1 of the system operation. BOOT
option available for 10,12 and 15 years.
Owner's Risk Investor's Risk
Tax Benefits
Accelerated Deprecitation benefit of upto 80% of the System
cost in year 1
Accelerated Deprecitation benefit will be taken by the
investor who owns the asset.
Production Guarantee &
Componenet Quality
System component evaluation, warranties, make and ratings
become the most critical aspect in decision making and may
be time consuming
Solar system production is guaranteed by developer so no
worry about the quality of the system as any shortfall in
production results in developers loss. Only the absolute level
of production guarantee in relation to DC system size is
important.
Owner's Risk Investor's Risk
Limitations on Host customers
actvities
No restrictions on shutting down the solar plant, moving it to
a different location or even removing it if the need be. Land /
Roof-top will not be leased out to developer and hence any
modifications to the facility remain under control of the
owner. No binding long term PPA agreement with the
developer.
There are certain responsibilities of the host including but
not limited to making sure no shade creating objects or
activities are developed or undertaken by the host, no
shutting down of solar plant at will, host has to off-take all
the produced solar power, land/roof-top has to be leased to
the developer for term of PPA. Buyout & Termination options
are available but are usually very costly.
Owner's Risk
Operatins & maintenance
Replacement of components, Operations and maintenance,
warranty claims, solar plant insurance are all part of the
owners responsibility.
Operations & maintenance as well as Insurance are included
in the PPA rate and any warranty claims are to be undertaken
by the developer.
Owner's Risk Investor's Risk
End Of life
End of Life Disposal of the system will be owners
responsibility.
End of life, except in the case of BOOT models will be
developers responsibility
Owner's Risk Investor's Risk
Monitoring & Analytics
Owner of the plant will have to assign resources for
continuous monitoring of the production from the solar plant
and invest in training personnel to operate and maintain the
plant to some extent.
Daily asset monitoring for production will be done by
developer using the advanced analytical tools to predict any
issues not seen by the eye.
Value addition
Addition of components like Energy Storage, Power quality
enhancer, capacitor banks etc. can be done at owners
discretion.
Any additional enhancement to the facility in terms of captive
energy consumption reduction or management has to be
done without affecting the solar plant for the term of PPA
Owner's Risk

2. EFFICORE CONFIDENTIAL 2
Scenario Analysis of various models
Scenario
CAPEX OPEX
BOOT (10,12,15
years)
1
Surplus Cash reserves and ability to avail
accelerated depreciation benefits
P
2
No foreign presence on facility or leasing of
rooftop/land for a long term (> 20 years)
P
3
Operations of the facility are not projected to go
on for long term (> 20 years)
P P
4
Confident in operating and maintaining solar plant
for the lifetime
P P
5
Belief in Utility tariffs escalating at a high rate (> =
4 %)
P P
6 Reduce operating cost without any investment P P
7
Inability to allocate manpower and resources
dedicated to the solar plant
P
8
Focus on core business and operations rather than
focusing on solar plant
P
9 Consistent & predicatbale load profile P P
10
Implementing other energy conservation /
generation programs
P

3. EFFICORE CONFIDENTIAL 3
EFFICORE ENERGY SOLUTIONS PVT. LTD.
Energy Re-Imagined