Currently, the following business models are in vogue namely, self-owned (capital expenditure [Capex] model) and Renewable Energy Service Company (RESCO) model and third-party owned model. “RESCO” means an energy service company which provides renewable energy to the consumers in the form of electricity.
Under Capex Model, consumers develop a solar rooftop plant within their premises to own, operate, and generate electricity for self-consumption and sell excess electricity to the utility (under net metering) or sell entire electricity to the utility (under gross metering). Generally, self-owned business model is preferred for its simplicity. However, this model also has disadvantages such as high capital cost for the consumer and high technology and performance risk.
Under RESCO Model, a RESCO builds, owns, and operates GRPV plants in the premises of a consumer to generate and sell electricity to the consumer. Consumer may further engage in a net metering or gross metering arrangement with the DISCOM.
In RESCO, consumer does not invest in the GRPV power plant. However, a RESCO developer invests and sets up the system. RESCOs are specialized solar developers; they can handle technology and operation risks in a better way. However, RESCO model faces several challenges such as power off-take risks, contractual risks, etc.
Under Third Party Model, a third party builds, owns, and operates GRPV plants on a rooftop and sells the generated electricity directly to the DISCOM at FIT.
Suitability of these model depends on one’s ability to meet the costs. However, RESCO model is more suitable for institutional, commercial, and industrial consumers needing higher capex.