Finance Management – Fense Solar

Finance Management

Financing a SPV system is a subject of concern for many. Hence we offer flexible finance options depending on the client’s requirements’.

One of the major factors to be considered before opting for Solar PV is the cost involved in installing it. Solar PV systems need a separate cost estimation to be carried out, depending upon the PV Solution and the type of PV system to be installed. Over the years the cost of installing a Solar PV system has reduced greatly. Still, financing one remains a subject of concern for many. 

 

We at FENSE Solar offer flexible payment solutions depending upon the client’s requirements’ and convenience. We have developed customized financial solutions to facilitate a hassle free and a smooth installation process for our clients. Our team at FENSE Solar helps you understand the various payment options and determine the best one to start saving on your solar power plant from day one. Depending upon the nature of the requirement, we offer the following investment models.

  •    OPEX 
  • CAPEX
  • PLIP
  • LEASE
   OPEX 

OPERATING EXPENSES

ZERO INVESTMENT – PAY ON THE GO

The conventional rooftop Solar PV sector has been driven mainly by power purchasers investing their capital to build their own solar power plants. But over the recent past, a more structured and an innovative model has been making its way through. This is called the Operating Expense (OPEX) model.

The principle behind it remains the same, i.e. instead of the power purchaser (say a business) investing his own money on a solar power plant, the solution provider(in this case FENSE Solar) invests the capital on the plant and also maintains it. In turn, the power purchaser agrees to purchase the power from the solution provider at a set price per unit, over a set period of time. The price per unit is lower than the price offered by the Utility Company.

The OPEX model has been variously called as the “Build Own Operate Transfer (BOOT)” model or the “Solar Power Purchase Agreement (PPA)” model – both mean the same. 

Following are the key features of the OPEX model.

CAPEX

CAPITAL EXPENDITURE

OWN YOUR ASSET – CASH IN ON THE BENEFITS

CAPEX also called the Capital Expenditures model of investment is the one in which the end consumer owns the asset unlike that in the OPEX model. Here the consumer has to pay for the entire Solar PV system upfront. 

The Solar PV system includes the Solar Panels, the Balance of System and the Module Mounting structures.The advantage of this model is that you own the system from day one, and therefore you can generate your own electricity right from the day the system is commissioned. It is a good investment choice as the customer gets the benefits of Accelerated Depreciation and reduced utility bills.

Operational expenses for a quality system that is properly installed will be very low, and system maintenance can be delegated to an authorized operation and maintenance (O&M) contractor or EPC service provider.

Following are the key features of the CAPEX model.

PLIP

PERFORMANCE LINKED PAYMENT

PAY MINIMUM UPFRONT – ENJOY AD BENEFITS & REDUCED BILLS WITH NO RISKS ASSOCIATED.

PLIP model is also a type of third party financing being made available by FENSE Solar. This model is the one that finds the best of both, the OPEX and the Lease model. It has been developed in a way so as to meet the customers’ energy needs through solar. It is best suited for industrial, commercial and other large-scale applications.

Here the customer pays some upfront cost of the project. The remaining is arranged by FENSE Solar. The only difference from the traditional lease being that, the customer gets the benefits of Accelerated Depreciation (AD) for the percentage of equity contributed and pays for the units consumed at a price lower than the grid price.

The customer signs a PPA with FENSE Solar and pays monthly for the units consumed. The solar tariff is lower than the grid prices. There is also an additional option wherein you can lock your monthly tariff irrespective of the ongoing price, so as to negate the effect of rising grid prices.

LEASE

LEASE MODEL

PAY BY THE MONTH – START SAVING RIGHT AWAY

The Lease model of payment is a type of third-party solar financing option being made available in India. Companies and businesses continue to develop Solar PV projects using this payment solution and are one of the most popular methods of solar financing for customers to realize the benefits of solar energy.

In this, a customer can sign a traditional lease agreement with an investor (in this case FENSE Solar), by paying some upfront cost and then paying equal installments over a period of years.

In the lease model, a customer will sign a PPA with us and pay monthly for the Solar system over a period of years or decades, rather than paying for the power produced. Solar leases can be structured, so customers pay no up-front costs to some of the system cost, or purchase the system before the end of the lease term.

Following are the key features of the LEASE model.