Is CAPEX or RESCO Better for a Housing Society?

CAPEX usually delivers higher lifetime savings and asset ownership, with typical payback of 3–5 years. RESCO wins when capital is genuinely unavailable. Societies with reserves — or access to a solar loan — generally do better owning.

What IRR Is Considered Good for a Solar Project?

Indian commercial rooftop projects commonly show 18–28% IRR without tax benefits, rising above 30% for businesses claiming accelerated depreciation. Compare the result against your organisation’s cost of capital rather than an absolute benchmark.

Should Societies Claim Accelerated Depreciation?

Generally no — accelerated depreciation is a tax shield requiring business income. Cooperative housing societies typically cannot use it, so leave the toggle off for a realistic society comparison.

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ASSESSMENT & FINANCIAL

CAPEX vs RESCO Calculator

Own vs zero-investment PPA — IRR, NPV & 25-year cashflow

Free · No sign-up · Computed instantly on your device

Project & Commercial Inputs

Defaults reflect a typical Indian society or commercial rooftop. Adjust to your quotation and PPA offer.

System size (kW)

CAPEX cost (₹/kW)

Grid tariff (₹/unit)

RESCO/PPA tariff (₹/unit)

Specific yield (kWh/kWp/yr)

O&M cost (₹/kW/yr)

Grid tariff escalation3%/yr

PPA tariff escalation2%/yr

Discount rate (for NPV)8%

Claim accelerated depreciation (businesses only)40% WDV depreciation creates a tax shield in CAPEX ownership. Not available to housing societies or individuals without business income.

Models 25 years with 0.5%/yr module degradation and 5%/yr O&M inflation. RESCO assumes zero investment and zero O&M liability. Indicative only — validate against your actual quotation, PPA terms, and tax position before a board decision.

25-year advantage of owning (CAPEX) over RESCO

₹1,64,52,641

CAPEX delivers more lifetime value at these assumptions — provided the capital is available.

CAPEX (Own It)

Investment: ₹45,00,000
Year-1 benefit: ₹12,70,000
NPV @ 8%: ₹1,20,28,208
IRR: 30.5%
Payback: 3.4 yrs
25-yr net: ₹3,77,05,330

RESCO / OPEX (PPA)

Investment: ₹0
Year-1 saving: ₹5,25,000
NPV @ 8%: ₹78,81,788
IRR: n/a (no outlay)
Payback: Immediate
25-yr net: ₹2,12,52,689

Cumulative Cashflow — CAPEX vs RESCO

Where the green line crosses zero is CAPEX payback; where it crosses blue, ownership overtakes the PPA.

Investment

₹45,00,000

Project IRR

30.5%

Payback

3.4 yrs

The third option most committees skip: a financed CAPEX project. Because payback (3.4 yrs) is typically shorter than a 5–7 year solar loan, the savings often exceed the EMI from year one — and the society still owns the asset outright afterwards. Add your EMI to the CAPEX column to compare all three.

Read the full CAPEX vs RESCO comparison — including the PPA clauses to check before a general-body vote.

About This Calculator

This is the decision every housing-society committee and facility manager faces: buy the solar plant outright and keep all the savings, or take a RESCO/OPEX deal with zero investment and buy the power at a discounted tariff. The calculator models both over 25 years, returning the numbers a treasurer needs to present — IRR, NPV, simple payback, and the cumulative cashflow curve where ownership overtakes the PPA.

The model applies 0.5%/year module degradation, escalating grid and PPA tariffs, O&M inflation, and (optionally) the 40% written-down-value accelerated depreciation available to tax-paying businesses. Housing societies without business income should leave accelerated depreciation off — it materially changes the answer.

How the Calculation Works

CAPEX means you buy and own the plant: you pay upfront, keep all the savings, and — if you are a profitable business — can claim tax benefits such as accelerated depreciation. RESCO (renewable energy service company) means a developer owns the plant and you buy its power at an agreed tariff: no upfront cost, but you share the savings.

The calculator compares the two over the plant’s life using IRR (the annual return on your investment), NPV (the value today of all future cash flows) and payback. Defaults are deliberately conservative — accelerated depreciation is off by default because housing societies cannot claim it.

How to read the result

A higher IRR means a faster-growing return; compare it with what your money would otherwise earn.
A positive NPV means the investment beats your chosen discount rate.
RESCO’s advantage is zero upfront cost; its trade-off is a smaller lifetime saving than owning.

Go Deeper

CAPEX vs RESCO compared Accelerated depreciation for MSMEs Solar for MSMEs Housing society solar

Frequently Asked Questions

Is CAPEX or RESCO Better for a Housing Society?: CAPEX usually delivers higher lifetime savings and asset ownership, with typical payback of 3–5 years. RESCO wins when capital is genuinely unavailable. Societies with reserves — or access to a solar loan — generally do better owning.
What IRR Is Considered Good for a Solar Project?: Indian commercial rooftop projects commonly show 18–28% IRR without tax benefits, rising above 30% for businesses claiming accelerated depreciation. Compare the result against your organisation’s cost of capital rather than an absolute benchmark.
Should Societies Claim Accelerated Depreciation?: Generally no — accelerated depreciation is a tax shield requiring business income. Cooperative housing societies typically cannot use it, so leave the toggle off for a realistic society comparison.

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