Definition
CAPEX (Capital Expenditure) model in solar means the customer purchases, owns, and operates the solar plant. Customer pays upfront for the system and claims tax depreciation benefits. Common for Indian residential rooftop and for C&I projects where the buyer wants asset ownership.
Key Takeaways
- CAPEX = customer buys + owns solar plant.
- India: accelerated depreciation (40% year 1).
- Subsidies (Rooftop Solar Programme Phase II) apply only to CAPEX residential.
- Payback 4–8 years; subsequent 20 years near-free.
- Better lifecycle economics than OPEX for long-term owners.
Frequently Asked Questions
4 commonly searched questions about CAPEX Model (Solar).
What is CAPEX in solar?
Customer pays upfront for the solar plant and owns it. Customer claims all tax benefits (depreciation), gets free energy after payback. Common in residential and asset-heavy C&I.
Tax benefits under CAPEX?
India: accelerated depreciation @ 40% (year 1) + 40% MAT (alternative minimum tax) deduction. Section 32 IT Act. Faster cost recovery vs. straight-line depreciation.
Typical CAPEX payback?
Indian residential: 5–8 years (with subsidy). C&I: 4–7 years. Subsequent 17–20 years are nearly free energy.
When to choose CAPEX over OPEX?
Choose CAPEX when: capital available, tax benefits valuable, long-term ownership desired, want lowest lifecycle cost. Choose OPEX when: no capital, prefer operational expense, short ownership horizon.
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