Capex EMI Model
Deferred Capex EMI Model for Solar Projects (C&I Segment)
The Deferred Capex EMI Model is an innovative financing structure designed to make solar adoption more accessible for commercial and industrial consumers. It blends the benefits of asset ownership with the flexibility of deferred payments, addressing upfront capital constraints while enabling long-term savings.
Key Features
- Zero or Minimal Upfront Investment: The consumer pays little to no upfront capital for the solar installation. - The project is financed by the developer or a third-party financier.
- Equated Monthly Installments (EMIs): The total project cost is recovered through fixed monthly payments over a defined tenure (typically 3-5 years). - EMIs may be structured to be lower than the current electricity bill, ensuring immediate savings.
- Ownership Transfer: The asset ownership may lie with the consumer from Day 1 or transfer at the end of the EMI tenure, depending on the agreement.
- Tax and Depreciation Benefits: If ownership lies with the consumer, they can avail accelerated depreciation and other tax benefits.
Advantages for C&I Consumers
- Cash Flow Friendly: Avoids large upfront capex, preserving working capital.
- Predictable Costs: Fixed EMIs simplify budgeting and financial planning.
- Energy Cost Savings: Solar tariffs are typically lower than grid tariffs, leading to net savings.
- Sustainability Goals: Helps meet ESG targets and reduce carbon footprint.
Use Cases
- Manufacturing units with high daytime energy consumption.
- Warehouses, logistics parks, and data centers.
- Commercial buildings with rooftop or open land availability.
- Entities with limited capex budgets but strong credit profiles.
Considerations
- Credit worthiness: EMI models require credit evaluation of the consumer.
- Regulatory Compliance: Must align with net metering/open access policies of the state.
Clients & Sponsors
