What is a RESCO model? Explained

Under the RESCO model, a developer finances, installs, operates and maintains the rooftop solar power plant on the consumer’s roof.

The developer signs a power purchase agreement (PPA) with the rooftop owner.

The rooftop owners consume the electricity generated from the solar plant for which they have to pay a pre-decided tariff that includes the Operation and Maintenance (O&M) cost to the RESCO developer on a monthly-basis for the tenure of agreement.

RESCO Model is a less capital intensive solar intensive scheme. As the  entire system is owned by the developer, rooftop owners only pay
pre-decided subsidized tariff monthly (less than the state run energy distribution companies).

Thus, for consumers, it is a low-cost intensive option as compared to CAPEX model where the entire system is owned by the rooftop owners.

Responsibility of O&M for the system lifetime in RESCO Solar model lies with the developer.

Since it is done by the experts in the field, the system runs efficiently for longer duration and results in incremental generation as compared to CAPEX model.

Under RESCO model consumers can lease their rooftop to Solar energy companies to get earn a monthly income.

The main thing to note here is that in a RESCO model, the ownership of the solar power plant remains with the Solar company and not the consumer or the owner of the rooftop or house.

Main features of RESCO Model Solar System are

  • The household serviced does not own the generation equipment, it is owned by the solar company.
  • The user does not carry out maintenance, all maintenance and repair service is provided by the solar company
  • The user pays a service charge that covers the capital repayment requirement and the cost of providing for maintenance and repairs.
  • User must have the minimum sanctioned load  and minimum per day use as per the criteria laid down by the company to make the project feasible.
  • User will provide the space to develop this plant of minimum capacity of 1 KW or as per the solar company scheme criteria.
  • User will provide the Local supports like water source for cleaning of panles, monitoring area, installation area of inverters, internet connectivity etc.

The concept is much like that of a conventional electric utility in that the generation equipment is not owned by the user and the electricity that is generated is made available to the customer for a fee. 

The fee charged to the user includes any required capital replacement cost and all operating, maintenance and repair costs plus a profit for the operating organisation.

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