Zero-capex solar (ESCO): how the model works

The ESCO model separates three roles: the roof owner (the electricity user), the investor or financier (owner of the system during the contract term), and the EPC/O&M contractor. The company pays for metered energy consumed, with no upfront capital outlay.

• The investor funds equipment, construction, insurance and operation throughout the term (commonly 10–20 years depending on structure).
• The company pays a per-kWh rate below the equivalent grid tariff, measured through a dedicated meter.
• At the end of the term the system is usually transferred to the roof owner at a nominal price, or the parties extend the agreement.
• Systems are normally designed to prioritise on-site consumption and minimise export, which protects the economics for both sides.

• Sufficient usable roof area in good structural condition; larger systems support more competitive tariffs.
• Stable daytime load and a high self-consumption ratio — the single most important screening criterion.
• Clean site documentation (land use rights, construction permit, fire protection) and a lease term longer than the ESCO contract.
• Sound financial standing and payment history, because the investor takes credit risk on the offtaker.

• Tariff and escalation: the discount to the grid tariff and how it is adjusted when retail prices change.
• Take-or-pay commitments: payment obligations if production slows or the plant shuts down for extended periods.
• Responsibility for roof repairs, refurbishment or relocation of the array, and who bears removal and reinstallation cost.
• Early termination conditions, buy-out price, and assignment rights if the company changes ownership.
• Ownership of environmental attributes (I-REC certificates, carbon credits) — if needed for ESG or RE100, it must be explicit in the contract.

Rights to renewable energy certificates and carbon credits depend on the contract and applicable regulation; do not assume the electricity user automatically receives them.

• Self-investment (CAPEX): lowest long-term levelised cost, but requires capital and in-house asset management.
• ESCO: no capital required and immediate savings at the agreed tariff, in exchange for sharing long-term savings with the investor.
• DPPA under Decree 57/2025/ND-CP: large-scale renewable purchase via the grid or a private line, suited to green energy demand beyond what a roof can deliver.
• Many companies combine both: ESCO or self-investment on the roof, DPPA for the remaining renewable volume.