Many factory owners in Chennai want lower power bills but don't want to lock ₹30–50 lakh of working capital into a rooftop solar plant. The RESCO or OPEX model solves that: a solar developer builds, owns and maintains the plant on your roof, and you simply buy the power it generates at a fixed rate that is lower than your TNPDCL tariff. Here is how it works, what it costs, and how to decide between OPEX and owning the plant.
What is the RESCO / OPEX solar model?
RESCO stands for Renewable Energy Service Company. In this model, the developer, not the factory, pays for the solar plant. It designs, installs, owns, insures and maintains the plant on your roof for the contract period. You sign a long-term power purchase agreement (PPA) and pay only for the units the plant generates, at an agreed rate per unit.
It is called the OPEX model because solar becomes an operating expense, like your electricity bill, rather than a capital expense (CAPEX) on your balance sheet. Your existing TNPDCL connection stays in place and supplies whatever the solar plant does not.
| RESCO / OPEX | CAPEX (you buy the plant) | |
|---|---|---|
| Upfront investment | None | ₹30,000–50,000 per kW |
| Who owns the plant | Developer, for the PPA term | You, from day one |
| What you pay | A fixed rate per solar unit | Nothing after purchase, except O&M |
| Maintenance | Developer's responsibility | Yours, or through an AMC |
| Accelerated depreciation | Claimed by the developer | Claimed by you |
| Savings over 25 years | Moderate | Highest |
How zero-investment solar works, step by step
The developer reviews 12 months of electricity bills, roof area, roof condition, load profile and your company's financials.
You receive a plant size, expected annual generation and a per-unit tariff, either fixed for the whole term or with a small yearly escalation.
You sign a power purchase agreement and give the developer access to your roof for the term, usually 15–25 years.
The developer installs the plant and handles TNPDCL approvals, Electrical Inspectorate approval and metering.
A meter records solar generation, and you pay the developer for those units each month, alongside a smaller TNPDCL bill.
Depending on the contract, the plant transfers to you, you buy it at a pre-agreed price, or the developer removes it.
What a Chennai factory saves: worked examples
These examples assume about 1,450 units per kW per year, all solar power consumed on site, and year-one figures before panel degradation, escalation or any applicable network charges. Your actual numbers depend on your tariff category, roof and load.
| 100 kW, LT industrial | 500 kW, HT industrial | |
|---|---|---|
| Annual solar generation | ~1,45,000 units | ~7,25,000 units |
| Grid tariff (energy charge) | ₹8.25 / unit (LT IIIB) | ₹7.50 / unit (HT I) |
| Assumed RESCO tariff | ₹4.75 / unit | ₹4.50 / unit |
| Saving per unit | ₹3.50 | ₹3.00 |
| Year-one saving with RESCO | ~₹5.1 lakh | ~₹21.8 lakh |
| Year-one saving if you own the plant | ~₹12 lakh | ~₹54 lakh |
| Approximate cost to own | ₹30–50 lakh | ₹1.5–2.5 crore |
The pattern is clear: RESCO saves roughly 35–45% of what owning the plant would save, but with zero investment. If you own the plant, payback is typically 2.5–4 years, and every year after that is close to free power. Note that solar reduces energy charges only. HT demand charges (₹608 per kVA) stay the same under either model. For a full CAPEX breakdown, see commercial & industrial solar in Chennai: cost, ROI and process.
OPEX vs CAPEX vs loan: which is right for your factory?
For a broader look at financing, read solar loans in Chennai. For a manufacturer's view of sizing, roofs and approvals, see solar for factories in Chennai.
Is your factory a good fit for zero-investment solar?
Developers take a 15–25 year risk on your site, so they are selective. Your factory is a strong candidate if most of these apply:
- Size: a plant of roughly 100 kW or more, which needs around 10,000 sq ft of shade-free roof. Smaller plants are often not viable under RESCO.
- Daytime load: steady consumption during daylight hours, ideally six days a week, so most solar units are used on site.
- Roof life: a structurally sound RCC or metal-sheet roof with remaining life at least equal to the PPA term. Old sheet roofs may need replacing first.
- Ownership or a long lease: you own the building or have a lease that covers the PPA period.
- Credit profile: audited financials and a payment track record, because the developer is relying on you to pay for 15–25 years.
- Tariff category: a higher grid tariff, such as LT IIIB industrial or LT V commercial, means a bigger saving per unit.
What to check in a solar PPA before you sign
- Tariff and escalation: a flat tariff for the full term is best. If there is escalation, check that it stays below the expected rise in grid tariffs.
- Term: 15–25 years. A shorter term usually means a higher tariff but earlier ownership.
- Minimum offtake or deemed generation: what you pay if you can't use the power, for example during a shutdown or grid outage.
- Guaranteed generation: compensation if the plant underperforms the promised units.
- Buyout option: a pre-agreed schedule to buy the plant early, for example in years 5, 10 or 15.
- End-of-term transfer: whether the plant transfers free, at a nominal price or at market value, or is removed.
- Roof repairs and expansion: who pays to remove and refit panels if you need roof work or want to extend the building.
- Equipment and design: named Tier-1 panels and inverters, and structures designed for Chennai's 50 m/s basic wind speed. See solar in Chennai's monsoon and cyclones.
- O&M and response time: cleaning frequency, fault response time and remote monitoring access for you.
- Exit and default terms: what happens if you sell or relocate the factory, or if the developer exits the business.
Tamil Nadu rules to know before choosing OPEX
- Approvals: rooftop plants for business connections need TNPDCL (formerly TANGEDCO) approval, Electrical Inspectorate approval for larger plants and an appropriate metering arrangement. A good developer or EPC handles all of these. See TANGEDCO solar rules.
- Network charges: TNERC has levied network charges per unit on rooftop solar for industrial consumers. These charges have been challenged in the Madras High Court, and the position has changed over time. Ask whether the PPA tariff includes or excludes them before comparing offers.
- Exports: plants are normally sized so that nearly all power is used on site, because any surplus exported to the grid earns a much lower feed-in rate.
- Group captive: for large HT consumers without enough roof, off-site group captive projects (where you hold at least 26% equity and consume at least 51% of the output) are another low-investment route.
Frequently asked questions
Can a factory in Chennai really get solar with zero investment?
Yes. Under the RESCO or OPEX model, a developer pays for, installs, owns and maintains the plant on your roof. You pay only for the solar units you use, at a rate lower than your grid tariff, under a 15–25 year power purchase agreement.
What is the RESCO tariff per unit for industries?
Indicative rates for commercial and industrial rooftop PPAs in India are around ₹3.50–5.50 per unit in 2026, depending on plant size, site, credit profile, term and escalation. Larger plants and stronger credit profiles generally get lower rates.
Is RESCO better than buying the solar plant?
It depends on your priorities. RESCO needs no investment and transfers maintenance risk to the developer, but owning the plant (CAPEX) typically saves two to three times more over its life and gives you the 40% accelerated depreciation benefit.
What is the minimum plant size for zero-investment solar?
Most developers look for plants of around 100 kW or more. Smaller plants are often not viable under RESCO, and a loan-funded purchase usually works better for them.
What happens at the end of the RESCO contract?
It depends on the PPA. Common options are free or nominal transfer of the plant to you, purchase at a pre-agreed or fair market value, or removal by the developer. Agree on this before signing.
Who maintains the plant under OPEX?
The developer. Because it is paid only for units generated, it has a direct incentive to keep the plant clean, monitored and running well throughout the contract.
Does solar reduce HT demand charges?
No. Rooftop solar reduces the energy charges on your bill. HT demand charges are based on your contracted demand and stay the same under both OPEX and CAPEX models.
Not sure whether to choose OPEX or buy the plant?
Send us 12 months of electricity bills. Arka Solar Energy, a solar EPC company in Chennai, will check your roof and load and model an outright purchase, a loan and a RESCO/OPEX option side by side, so you can see the savings for each.
Tariffs, savings and PPA rates are indicative as of October 2026 and vary by tariff category, site, plant size and contract terms. Tamil Nadu tariffs and network charges are set by TNERC and may change. This guide is general information, not financial or tax advice; consult your chartered accountant on depreciation and tax treatment.