Solar CAPEX vs OPEX (PPA) Calculator

Under CAPEX you buy the plant, own the asset and keep every rupee it saves, but you fund the capital and carry operations and maintenance. Under OPEX — also called a PPA or RESCO model — a developer builds and owns the plant on your roof and you simply buy the units it generates at an agreed tariff, usually below your grid rate. No capital, no O&M, and a smaller saving.

CAPEX almost always wins on lifetime rupees where the grid tariff is healthy, because you keep the full difference between your tariff and the cost of generation rather than sharing it with a developer. What the comparison here shows is the crossover year — the point at which cumulative CAPEX savings overtake cumulative PPA savings — so you can weigh that against the capital you would tie up to get there.

That depends entirely on your contract, and it is the clause worth reading most carefully. Some agreements transfer the asset to you at a nominal price; others allow the developer to remove the plant or renew at a renegotiated tariff. This calculator takes the conservative view and assumes no further saving after the term ends. If your contract transfers the asset, the PPA case is better than shown here.

Zero capital, not zero cost. You still pay for every unit, and over a 25-year horizon those payments usually exceed what owning the plant would have cost. A PPA buys you balance-sheet relief and hands operational risk to the developer, which can be exactly the right trade — but it should be a deliberate choice, not one made because the plant looked free.

It is the clause that decides the deal. A PPA tariff that escalates faster than your grid tariff erodes the saving every year and can turn negative late in the term. Set the PPA escalation here to whatever your draft contract actually says and watch what it does to the lifetime figure before you sign.