Resco Model Agreement

For the capex & RESCO model: The bidder must meet the eligibility criteria independently as a bidder company or consortium of bidders, with one of the members acting as the lead member of the bidding consortium. Rooftop solar projects in India typically follow the lease model or licensing model to obtain rights to the customer`s roof for the construction and operation of the project. The company in whose premises the project will be built will enter into either a lease deed or a license agreement with RESCO, which grants RESCO the lease/license to use the premises to set up and operate the project. Alternatively, RESCO and the client may either take hereditary construction rights/license fees in favor of RESCO under the PPA. Once the criterion of financial support is accepted and fulfilled, the 100% capacity will be awarded to the bidder L- For the RESCO model: On the basis of the leveled rate specified by the bidders during the e-reverse auction, IPGCL organizes the bids in ascending order, i.e. L1, L2, L3, …. etc. (L1 is the lowest rate). lowest bidder is declared as the successful bidder. Licensing agreements between RESCO and the company on whose roof the project is to be built are subject to the conditions of licence of the Indian Easements Act. „Build, Own, Operate and Transfer“ (BOOT) is a special type of RESCO model in which RESCO builds, owns, operates and transfers ownership of the project to the customer after a predefined period of time. RESCO and the Customer enter into a long-term power purchase agreement („PPA“) for an agreed period of time, which specifies, among other things, the conditions under which the electricity produced by the Project will be sold to the Customer and the rate at which the electricity will be sold. Excess electricity from the project (if any) could be sold by the customer to the distribution company via a net metering system – net metering regulations vary from state to state.

If RESCO and Customer enter into different PPAs and license/lease agreements, then: (a) Customer is required to pay the RESCO rate for electricity supplied from the Project in accordance with the terms of the PPA; and (b) RESCO is required to pay the customer a rental/license fee under the lease/contract for the use of the roof areas. The PPA and lease/license agreements must be stamped as separate instruments in accordance with applicable stamp duty laws. In addition, a lease must also be registered under the Registration Act 1908. Licensing agreements, on the other hand, are not compulsorily registrable under the Registration Act 1908. Some of the main risks associated with the introduction of the RESCO model are discussed below: Given the various advantages associated with the RESCO model, this is an attractive option for customers who want to use solar energy on the roof but do not want to make high investments. In addition, it also becomes an attractive opportunity for corporate houses, institutions, and government buildings to generate revenue from leases/royalties. However, the customer should bear in mind that the RESCO model does not provide for a problem-free change of service provider or RESCO during the term of the contract, therefore, in the event of unsatisfactory performance by the service provider, the customer may have to perform complex procedural steps in accordance with the underlying agreement. for the purpose of modifying the RESCO and receiving the same services from another company.

Various state governments, government agencies, and agencies regularly issue tenders asking developers to set up network-connected RESCO projects on the roofs of buildings owned by central, state or local governments, government institutions (e.B. Public sector enterprises, all buildings of corporations, corporations, corporations, educational and health care institutions, including those registered under the Companies Registration Act. 1908 and the Indian Trust Act, 1882). These calls for tenders also provide for a mechanism through which promoters can receive financial support from the central government, subject to the eligibility criteria set out in the call for tenders. As a general rule, the duration of power purchase agreements considered in the context of such tenders is between 10 and 25 years. This article provides an overview of the application of the RESCO model in India. The RESCO/PPA model of solar energy is generally considered beneficial for consumers who have high energy consumption, such as. B an industry or a large enterprise.. .

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