With the cost of power from solar energy, in several states, highly comparable to that produced by hydro/coal power plants, solar is seen not just an alternative, but a very viable solution for commercial, industrial as well as residential establishments. Advancing technology in solar has helped industries across India save as much as 80% on their monthly power expenses. To put this into context, if an industry is paying an electricity bill of INR 10L today, it is possible to bring that cost down to about INR 2~3L a month, depending upon the location, system size and feasibility of the project. The savings when amassed over 25 years, which is the typical life of a solar system, run into high crores, thereby directly impacting the profitability of the company.
However, due to the high magnitude of power requirements that businesses have, especially for large scale business, the decision to go solar can be an expensive undertaking. And, because most of the capital of the businesses are locked in ongoing operations, investing a big amount upfront becomes a hindrance, ultimately, delaying their decision to go solar. Addressing this need of the industrial sector, MYSUN has pioneered an inhouse financing product which would allow industries to enjoy the benefits of solar without having to shell out the complete cost upfront. Add to it, our strategic tie-ups with the leading banks and NBFCs, MYSUN is determined to remove any obstacle that proves to be a bottleneck in the solar journey of our customers.
Run the MYSUN Solar Calculator now to see how much your business can save with solar every year.
How MYSUN’s C&I Solar Financing Work?
The inhouse Solar Financing product designed by MYSUN financial experts caters specifically to the needs of our commercial and industrial consumers. It makes solar viable for hundreds of businesses across the country. MYSUN offers its customers the Deferred Payment Agreement (DPA). The DPA payment plan allows businesses to go solar in easy monthly instalments under the CAPEX model. But before we get into the details of the payment plan, let’s first understand the two solar ownership models namely – CAPEX and OPEX models, and the financing challenges that businesses face related to these:
- CAPEX Model of Solar and its Financing Challenges
Under the CAPEX model, the solar system is owned and paid for by the business on whose rooftop the solar system is installed. The CAPEX proves to be cost-effective compared to OPEX. The LCOE (Levelized Cost of Electricity, which is cost/unit of electricity over 25 yr horizon) for solar under CAPEX is significantly lower than that under OPEX. Also, there is an added benefit of Accelerated Depreciation which comes with the ownership of the solar assets under CAPEX. The only challenge it presents – is the capital cost of going solar. MYSUN’s Deferred Payment Agreement (DPA) helps businesses defer this challenge.
- OPEX Model of Solar and its Financing Challenges
Under the OPEX model, the solar system installed on the rooftop of a business enterprise is owned and managed by an investor or a third party. In this model, the business does not pay for the cost of the solar system, but instead for the per unit of power that will be consumed from the electricity generated by the solar system. For this, the Business Enterprise enters into a PPA (Power purchase agreement) with the investor/third-party, but a strong credit rating is mandatory for the business to be eligible.
The point to note here is that – the majority of businesses in India belong to the SME/ MSME segment. And, the majority of SMEs/ MSMEs have poor credit ratings, stretched balance sheets and overdrawn working capital limits. This makes adoption of solar under the Opex model difficult for the majority of businesses, leaving Capex as the optimal model.
Did you know these 6 Things that Every Industry Should Consider Before Going Solar?
Details of MYSUN C&I Solar Financing: The Deferred Payment Agreement (DPA)
Under MYSUN’s Deferred Payment Agreement a business can install and own a solar system from day one by paying just 20-25% of the total solar system cost, while the balance can be paid in subsequent months over a period of 3~5 years. Given that the solar veterans at MYSUN understand the significance of the allocated working capital for a business, the Deferred Payment Agreement is designed to keep the instalment amount no more than the monthly savings they will reap with solar. Therefore, businesses pay for solar through the savings they realize on their monthly electricity bills after going solar.
Post the completion of the Payment Tenure, businesses can use the Savings from Solar to enhance its profitability in the form of high EBITDA (Earnings before interest, tax, depreciation and amortization) margins.
Thanks to Solar Financing from MYSUN, the commercial and industrial enterprises have no reason to withhold their decision to go solar. Therefore, if you are a business owner and are paying lakhs for power bills every month, choose to go solar today with MYSUN and begin availing the benefits of the MYSUN Deferred Payment Agreement.
You can call our Solar Advisors on +91 8448380218 or submit your details by clicking the “Schedule Your Site Survey” button below to start your solar journey today.
Do check out some of the advantages of going solar with MYSUN – The Largest Online Rooftop Solar Platform in India.