Terms & Definitions
PPA (Power Purchase Agreement)
A PPA is a legal agreement between a solar project developer (say, Vested) and a customer (company). In this arrangement, the customer agrees to purchase the electricity generated by the solar at a predetermined rate over an agreed-upon period. PPAs ...
Capex model
The Capex model involves the upfront capital investment by a business or individual to purchase and install a solar project. The owner takes full financial responsibility for the project, including its installation, operation, and maintenance. Any ...
RESCO model (Renewable Energy Service Company Model)
The RESCO model is an alternative to the Capex model where a third-party RESCO installs, owns, and operates the solar project. The customer pays for the electricity generated by the system, often at a rate lower than the conventional grid power. This ...
Rooftop projects
Rooftop projects involve the installation of solar panels on the roof of a building or structure. This approach is suitable for residential, commercial, or industrial buildings where available rooftop space can be utilized for harnessing solar ...
Ground mounted projects
Ground-mounted refers to solar installations where the solar panels are mounted on structures on the ground rather than on a building's rooftop. This type of installation is common in open areas, fields, or solar farms, allowing for larger-scale ...
IRR vs Return on Investment (ROI)
The major difference between ROI and IRR is the time value of money. ROI is simply the growth rate of your investment, be it even 100 years. It is not an annual rate of return. Whereas IRR takes into account the period of the investment. IRR is used ...