For most industrial buyers the case for solar is settled long before the first panel arrives — the real question is how to pay for it. The financing model you choose shapes your upfront cost, your balance sheet, your tariff and who carries the technical risk. Broadly there are two routes, CAPEX and OPEX, plus hybrids in between. Here is how to think about them.
The CAPEX model: own the asset
Under a CAPEX, or capital expenditure, model you fund the plant yourself and own it outright. You carry the upfront investment, but from day one every unit the system generates is effectively free power, and the payback typically lands in three to five years. Over a 25-year life that is the lowest possible cost per unit, plus accelerated depreciation benefits and a real asset on your books.
CAPEX suits businesses with the capital to invest and a long horizon at the site. You take on ownership responsibilities such as insurance and maintenance, but a good O&M contract turns those into a predictable, modest running cost while you keep the full savings.
The OPEX / RESCO model: pay only for power
Under an OPEX model, often called RESCO (Renewable Energy Service Company), a developer funds, builds, owns and maintains the plant on your roof or land, and you simply buy the electricity it produces through a long-term power purchase agreement, usually at a tariff well below the grid. There is little or no upfront cost, and the technical and performance risk sits with the developer.
This route is attractive when you want the savings without the capital outlay or the responsibility of owning generation equipment. The trade-off is a higher lifetime cost per unit than CAPEX, since the developer needs a return, and a multi-year contractual commitment to buy the power.
Which model fits your business
The right answer depends on a few practical factors:
- Do you have capital available, and what return does it earn elsewhere?
- How long will you occupy the site, and do you own or lease it?
- Do you value the lowest lifetime cost (CAPEX) or zero upfront outlay (OPEX)?
- How much technical and performance risk do you want to carry?
Many clients land on a hybrid: CAPEX for a first phase where the payback is strongest, then OPEX to scale further without stretching the balance sheet. Whichever route fits, we model the numbers for your exact site, load profile and tariff so the decision rests on evidence rather than assumption. Talk to us for a free, no-obligation assessment.