Zero Investment Rooftop Solar for Factories: How the RESCO Model Really Works

Published Nov 6, 2026

OPEX/RESCOGuides

"Zero investment solar" sounds too good to be true. It is not free solar. It is a contract where someone else pays for the plant and you pay for the power.

That model is called RESCO (Renewable Energy Service Company), and many people in the industry call it OPEX (operating expense) solar. This guide explains in plain words who pays for what, how the bill works, what happens when the contract ends, and when the model is the wrong choice for your factory.

What is zero investment rooftop solar?

Zero investment rooftop solar means a developer funds, installs, owns and runs a solar plant on your roof, and you pay only for the power you take. You spend no capital on the plant. Your cost becomes a per-unit tariff written into a long-term contract.

A CMS INDUSLAW overview of the RESCO model describes it this way: the RESCO develops, installs, finances, operates and owns the project, and the customer pays a pre-decided tariff under a PPA (Power Purchase Agreement). The Ministry of New and Renewable Energy (MNRE) guidelines, as reported by SolarQuarter, describe the same basic idea: third parties invest, and consumers pay for the electricity they consume, with no upfront cost.

The official word for the structure is RESCO. The commercial name is often zero investment rooftop solar. They refer to the same deal.

Who pays for what under the RESCO model?

The developer carries the plant cost and running work. The factory provides the roof and buys the power. The contract should spell out each duty in writing.

Item	Developer (RESCO)	Factory
Plant design and funding	Pays	Nothing upfront
Ownership during the contract	Owns the plant	Does not own the plant
Roof rights	Holds a lease or licence	Grants access to the roof
Running and upkeep	Usually responsible	Provides safe access
Power payment	Bills per unit	Pays the agreed tariff
Grid power	Not applicable	Keeps paying the discom (distribution company) for it

Upkeep is worth a closer look. Regular solar O&M (operations and maintenance) decides how much power the plant produces. Under RESCO, the developer earns only from the units generated, so its income depends on keeping the plant running. Check that the contract backs this up with a clear generation promise.

How does a factory actually pay under a solar PPA?

You get a bill based on metered solar units multiplied by the agreed tariff. Your discom bill continues for the rest of your power.

The savings logic fits on one line:

Monthly saving = solar units used × (your grid rate for those hours − your solar tariff)

Three points decide the true result:

Which grid rate you use. Use the charges solar can actually reduce, not your average rate. Demand charges may not fall much. Our guide on how to read your factory's electricity bill shows the difference.
How the tariff moves. A flat tariff and an escalating one can look very different by the later years. Compare the full-term cost.
What happens to surplus. The CMS INDUSLAW overview notes that excess power could be sold to the utility through net metering, but the rules differ by state.

How long does a RESCO contract run?

Expect a long-term commitment, often up to 25 years in published examples. Your actual term is a negotiated point in your contract.

A Delhi government note on the RESCO model says the agreement runs for a fixed period, "usually 25 years", at a fixed tariff. The CMS INDUSLAW overview, published in 2021, reports PPA terms of 10 to 25 years in rooftop tenders.

Before you sign, ask two simple questions. Will this factory still be on this site for the term? And what happens if we sell, shift or shut it? Our checklist of rooftop solar PPA clauses to check before signing covers exit and buyout terms in detail.

Who owns the solar plant when the contract ends?

That depends on the contract, and it should be written down on day one. In a BOOT (Build, Own, Operate, Transfer) structure, ownership moves to the customer at the end of the term.

The CMS INDUSLAW overview describes this BOOT route. After the transfer, the customer can keep the RESCO for maintenance or hire a third-party operator. Ask for the transfer price, the condition the plant must be in, and the handover of its warranties and records.

What does a developer check before offering zero investment solar?

A developer is funding a long-life asset on your roof, so it checks the roof, the load and your ability to pay. Expect these questions early:

Your load. Is daytime consumption steady enough to use most of the solar power?
Your bills. What are the last 12 months of consumption and charges?
Your roof. Can it carry the plant for the full term?
Your land rights. Do you own or lease the building, and for how long?
Your credit. Long-term payment risk sits with the developer, so financials are likely to be reviewed.
Your state's rules. Do net metering limits or open access rules affect the plant size?

What legal paperwork does a RESCO deal need?

Usually two core documents: a PPA for the power, and a lease or licence for the roof. Both need attention from your legal team.

According to the CMS INDUSLAW overview:

Roof rights can be given through a lease or a licence.
A lease needs registration under the Registration Act, 1908. A licence is not compulsorily registrable.
The PPA and the lease or licence must each be stamped under the applicable stamp duty law.

State rules also matter. The same overview warns that net metering rules differ by state and that caps can be a risk for RESCO projects. Confirm the current rules for your state with your discom and your lawyer.

What do you give up with zero investment solar?

You give up ownership benefits in return for keeping your capital free. For some factories, that trade is worth it. For others, it is not.

Tax depreciation. The Income Tax Department's depreciation table lists solar power generating systems at 40%. The CMS INDUSLAW overview notes that a RESCO customer does not own the project, so it cannot claim accelerated depreciation.
Long-term savings. If you own a plant, you keep the benefit of the power once the investment is paid back. Under RESCO, you share that value with the developer through the tariff.
Flexibility. A long contract can make it harder to relocate or rebuild your roof.

If those matter more to you than free capital, you may prefer to buy the solar plant outright. For a side-by-side view, see our guide to CAPEX vs OPEX rooftop solar.

When does zero investment solar make sense for a factory?

It tends to suit factories with steady daytime load, a long stay on site, and better uses for their capital. It is a weak fit when any of those three is missing.

RESCO is likely to suit you if	Think again if
Your factory runs through the day, most days of the week	Your plant runs mostly at night or shuts for long periods
You own the building or hold a long lease	Your lease ends well before the proposed contract term
You would rather spend capital on your core business	You have spare cash and can use the depreciation benefit
You want the developer to carry plant performance risk	You want full control of the asset

The market today leans towards ownership: Mercom India Research reports that the CAPEX model made up 84% of rooftop additions in Q2 2026, a quarter in which homes made up 84% of additions, industry 10% and commercial buildings 5%. So that split tells you little about what a factory should do. Your own numbers should decide.

Taxes play a small part too. A Ministry of New and Renewable Energy release, reported by The Tribune, says GST (Goods and Services Tax) on renewable energy devices fell from 12% to 5% from 22 September 2025, and that this was expected to lower levelised renewable tariffs. Ask any developer whether its quote reflects current costs.

FAQ

Is zero investment solar really free?

No. You pay nothing for the plant upfront, but you pay a per-unit tariff for the solar power for the length of the contract.

What is the difference between RESCO and OPEX solar?

In everyday use, they describe the same arrangement. A developer owns the plant and sells you the power. RESCO names the company type, and OPEX names how you account for the cost.

Can a RESCO customer claim depreciation on the solar plant?

Generally no, because the customer does not own the plant during the contract. Ask your tax adviser how this applies to your own situation.

Will my factory still need grid power?

Yes. A rooftop plant generates only in daylight and may not cover your full load, so you keep your discom connection for the rest of your power.

What happens to the plant at the end of the contract?

It depends on your contract. Under a BOOT structure, ownership moves to the customer at the end of the term. Agree this and any transfer price before signing.

About SustVest

SustVest is a rooftop solar developer in India, ranked among the CRISIL Top-10 rooftop solar project developers (#5, 2026). It runs 80+ distributed solar plants (about 30 MW) across 13 states for factories, hospitals, hotels, tea estates and institutions, and it funds, builds, owns and maintains plants under its OPEX model with zero upfront cost. Ask SustVest whether zero investment solar fits your factory.