What is the RESCO Model in the Solar Sector of India?

The RESCO Model (Renewable Energy Service Company) is an innovative and fast-growing business model in India’s solar sector where the solar power plant is owned, installed, and maintained by a third-party developer, and the end-user only pays for the electricity consumed, typically through a long-term Power Purchase Agreement (PPA).

This model is part of the OPEX (Operating Expenditure) approach and is particularly attractive for Commercial and Industrial (C&I) entities looking to adopt solar power without upfront investment.

How Does the RESCO Model Work?

1. A RESCO company (solar developer) installs a solar PV system (rooftop or ground-mounted) at the customer’s premises.
2. The RESCO invests in the full capital cost, including equipment and installation.
3. The customer signs a 10–25-year PPA with the RESCO at an agreed per-unit rate (e.g., ₹3–₹5 per kWh).
4. The consumer pays only for the energy consumed, similar to their regular electricity bill.
5. The RESCO handles O&M, insurance, performance monitoring, and warranties.

The RESCO Model may also be used for open-access solar projects, where power is wheeled through the grid to industrial users in another location.

Who Should Choose the RESCO Model?

The RESCO model is ideal for energy-intensive businesses that want to adopt solar energy without upfront cost or ownership risks. It is best suited for:

Commercial & Industrial Consumers:

• Manufacturing Plants (auto, textile, cement, paper, etc.)
• Warehousing & Cold Chains
• IT Parks and Data Centers
• Educational Institutions
• Hospitals & Pharma Labs
• Shopping Malls & Large Retailers
• Hotels & Resorts
• Airports & Railways Stations
• Logistics Parks and SEZs

These businesses typically have high daytime power demand, making solar highly effective in reducing grid reliance and electricity costs.

Key Advantages of RESCO Model over CAPEX Model

Feature	RESCO Model	CAPEX Model
Ownership	Solar asset is owned by RESCO	Owned by the consumer
Investment	No upfront investment	100% upfront cost by customer
Risk	All technical and performance risk on RESCO	Customer bears O&M risk
Tariff	Pay per unit (₹/kWh) under PPA	Free energy after ROI period
Maintenance	Handled by RESCO	Handled by customer
Cash Flow	OPEX; improves cash flow	Asset in balance sheet
Flexibility	Ideal for companies conserving capital	Best for long-term owners

RESCO is great for companies with limited budgets or those preferring off-balance sheet financing. CAPEX is better when the business wants to maximize long-term ROI and control.

Disadvantages of RESCO Model

• Long-term commitment (PPA lock-in) of 10–25 years
• Tariff escalation may apply (1–3% yearly in some cases)
• Requires high creditworthiness for developer confidence
• Limited customization in plant design compared to CAPEX
• Contract complexity with performance, termination clauses

Government Support for RESCO in India

India’s central and state governments are actively supporting the RESCO model to accelerate solar adoption, particularly for public buildings and C&I sectors:

Central Initiatives:

• MNRE Rooftop Solar Programme Phase II – Encourages RESCO model with subsidies for residential and institutional users.
• PM-KUSUM Scheme (Component C) – RESCO projects for rural feeders and government buildings.
• Green Open Access Rules 2022 – Allows consumers to buy solar power directly under RESCO/open access arrangements.

State-Level Policies (examples):

• Delhi Solar Policy – Actively promotes RESCO for schools, hospitals, and commercial buildings.
• Maharashtra, Gujarat, Tamil Nadu, Punjab, Rajasthan, Haryana – Offer supportive net metering and open-access frameworks for RESCO.
• Uttar Pradesh – Encouraging third-party ownership models for MSMEs.

Leading Companies Offering RESCO Model in India

Several reputed solar developers are actively implementing RESCO projects across India:

Top RESCO/Third-Party Solar Developers:

• Amplus Solar (a PETRONAS company)
• CleanMax Solar
• Fourth Partner Energy
• Tata Power Renewable Energy Ltd (TPREL)
• ReNew Power
• Radiance Renewables
• Mahindra Susten
• SunSource Energy
• Hero Future Energies
• Jakson Solar

These players have commissioned 100s of MW of rooftop and open-access RESCO projects for clients like Tata Motors, Mahindra, D-Mart, ITC, Flipkart, Big Basket, and several educational and healthcare institutions.

Use UrjaOne Platform to Discover RESCO Vendors Across India

Looking for solar with zero capital investment? The UrjaOne Platform is your one-stop solution to:

• Explore PAN India RESCO developers
• Compare PPA rates, terms, and system sizes
• Connect directly with verified vendors
• Get help with site feasibility and PPA drafting
• Choose from rooftop or open-access RESCO options

Whether you’re a factory owner in Gujarat, a university in UP, or a mall in Bengaluru, UrjaOne makes it easy to switch to clean energy—risk-free.

Visit UrjaOne to get started with RESCO today.

Final Thoughts

The RESCO model in India is a smart, scalable, and capital-free path to adopting solar energy—especially for commercial and industrial users. With government support, financial viability, and trusted third-party developers, it allows you to save on bills while advancing your sustainability goals.

Need help comparing RESCO vs CAPEX for your business? Explore options now on UrjaOne and make an informed, future-ready choice.

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