“What if you could generate clean electricity from your rooftop or land without investing in a solar power plant? What if your unused space could become a long-term source of savings or income while someone else invested, operated and maintained the project?”
This is exactly what the Renewable Energy Service Company (RESCO) model offers.
The RESCO model is not new. Professionals in the power sector have been discussing it for years. What is new is that it is now being implemented at scale. Across India, DISCOMs are issuing tenders, private developers are investing, State Electricity Regulatory Commissions are approving procurement frameworks, and Government initiatives such as PM-KUSUM have given the model unprecedented momentum.
The conversation has therefore shifted from “What is RESCO?” to “How do we implement it correctly?”
And that is where understanding both the commercial structure and the contractual framework becomes essential.
What is the RESCO Model?
RESCO stands for Renewable Energy Service Company.
In this model, the consumer does not purchase the solar plant.
Instead, a RESCO developer:
- invests in the project,
- designs the system,
- installs the plant,
- owns the assets,
- operates and maintains the facility.
The consumer simply purchases the electricity generated at a mutually agreed tariff, which is generally lower than the prevailing retail electricity tariff.
In simple words,
Traditional Model
You buy the solar plant.
You own it.
You maintain it.
You bear the investment and operational risks.
RESCO Model
The developer owns the plant.
The developer maintains it.
You pay only for the electricity you consume.
It is a shift from asset ownership to energy service.
Why Is the RESCO Model Gaining Momentum?
Because it solves one of the biggest barriers to renewable energy adoption—the high upfront investment.
The model enables consumers to enjoy the benefits of solar energy without making a significant capital investment.
For developers, it creates long-term revenue through energy sales.
For DISCOMs, decentralized renewable generation helps reduce transmission losses, supports Renewable Purchase Obligation (RPO) compliance and improves daytime power availability.
For India, it accelerates the transition towards cleaner energy.
Different Forms of RESCO Projects
The RESCO model is remarkably flexible and is no longer limited to one category of consumers.
Today it is being implemented through:
Rooftop RESCO
Suitable for:
- Residential buildings
- Apartment complexes
- Commercial establishments
- Schools
- Hospitals
- Hotels
- Government offices
Ground Mounted RESCO
Ideal for:
- Industries
- Educational campuses
- Warehouses
- Institutions
- Large vacant land parcels
Agricultural RESCO
Developers install solar plants on or near agricultural land while farmers provide land and benefit through lease income or other commercial arrangements.
Feeder Solarisation
Solar plants are connected to agricultural feeders, supplying electricity to entire groups of agricultural consumers rather than individual premises.
PM-KUSUM Has Accelerated the RESCO Model
Many people assume that PM-KUSUM and RESCO are the same.
They are not.
PM-KUSUM is a Government scheme.
RESCO is a business model.
However, PM-KUSUM has become one of the strongest drivers of RESCO implementation.
Under Components A and C, developers invest in decentralized solar plants while farmers or agricultural consumers provide land or access. Electricity is procured under long-term arrangements with DISCOMs.
One of the most interesting developments is the use of agrivoltaics, where elevated solar structures allow farming activities to continue beneath the panels. Instead of choosing between agriculture and renewable energy, the same land can produce both crops and electricity.
Which States Have Already Moved Forward?
Several State Electricity Regulatory Commissions have already approved procurement frameworks, tariffs or PPAs enabling RESCO implementation.
Among the leading states are:
- Andhra Pradesh
- Uttar Pradesh
- Rajasthan
- Gujarat
- Maharashtra
- Madhya Pradesh
- Haryana
- Tamil Nadu
Most approvals currently relate to procurement under PM-KUSUM or decentralized solar programmes rather than standalone RESCO regulations. Nevertheless, the regulatory direction is clear—the model is steadily gaining acceptance across the country.
Who Is Developing These Projects?
Several established renewable energy companies are actively participating in RESCO projects, including:
- Tata Power Solar
- Fourth Partner Energy
- CleanMax
- Amplus Solar
- Mahindra Susten
- Jakson Green
- Azure Power
- NTPC Green Energy
- Shakti Pumps
Many State DISCOMs also procure RESCO projects through competitive bidding.
The Most Overlooked Aspect: The Agreements
A solar plant may be installed within a few months.
A RESCO agreement may remain in force for 15 to 25 years.
That single fact changes everything.
Unlike buying a solar system outright, a RESCO project creates a long-term commercial relationship between the property owner and the developer.
Success therefore depends not only on engineering but also on carefully drafted agreements.
What Agreements Are Normally Required?
A professionally structured rooftop RESCO project generally requires four separate agreements.
1. Power Supply Agreement (PSA) or Power Purchase Agreement (PPA)
This is the primary commercial agreement.
It deals with:
- tariff
- billing
- metering
- payment
- performance guarantees
- energy supply
- default
- termination
- force majeure
- dispute resolution
2. Rooftop Licence (or Lease) Agreement
This gives the developer legal rights to install and operate the plant.
Typical clauses include:
- rooftop access
- structural suitability
- ownership rights
- safety requirements
- restoration obligations
- insurance
3. EPC Agreement
This governs:
- engineering
- procurement
- construction
- testing
- commissioning
- defect liability
- technical specifications
4. Operation & Maintenance Agreement
This covers:
- preventive maintenance
- cleaning
- monitoring
- reporting
- spare parts
- response time
- performance monitoring
Clauses That Are Frequently Missed
Many projects use standard agreement templates.
While these provide a useful starting point, certain provisions deserve much greater attention.
Some of the most commonly overlooked clauses include:
- Ownership of Renewable Energy Certificates (RECs) and carbon credits.
- Protection against future shading caused by new buildings, water tanks or trees.
- Structural certification of rooftops.
- Waterproofing responsibilities.
- Cybersecurity of monitoring systems.
- Ownership of operational data.
- Buy-out options and valuation methodology.
- Assignment rights to lenders.
- Lender step-in rights.
- Change in law.
- Changes in net-metering or gross-metering regulations.
- Grid outage risk allocation.
- Decommissioning responsibilities.
- Restoration of the rooftop after project completion.
Ironically, these are often the clauses that become most important several years after the project begins.
I Have a Rooftop or Land. How Can I Participate?
If you own suitable land or a rooftop, participation generally begins with a few simple steps.
- Assess whether the site has adequate shadow-free area and grid connectivity.
- Contact a reputed RESCO developer or your local DISCOM to understand available programmes.
- Obtain a technical feasibility assessment.
- Compare commercial proposals rather than focusing only on the tariff.
- Carefully review the contractual terms before making a long-term commitment.
Remember, you are not merely installing a solar plant—you are entering into a commercial relationship that could last for two decades or more.
Looking Ahead
The RESCO model is no longer an experimental concept.
It is becoming an integral part of India’s distributed renewable energy ecosystem.
The next phase of growth is likely to include:
- residential communities,
- apartment complexes,
- educational institutions,
- hospitals,
- commercial buildings,
- industrial parks,
- battery energy storage systems,
- integrated clean energy solutions.
As implementation accelerates, the quality of contractual documentation will become just as important as the quality of the solar modules themselves.
Final Thoughts
The RESCO model demonstrates how innovative business structures can accelerate India’s clean energy transition.
It reduces the need for upfront investment, creates opportunities for developers, supports farmers, helps DISCOMs meet renewable energy goals and enables consumers to access affordable clean power.
But every successful RESCO project rests on two equally important foundations:
A technically sound solar plant.
A commercially and legally robust set of agreements.
Technology generates electricity.
Well-structured agreements generate confidence.
As RESCO projects continue to expand across India, consumers, developers, institutions and farmers should view professional technical, commercial and regulatory review not as an additional expense, but as an investment in ensuring that a partnership expected to last 20–25 years remains balanced, bankable and sustainable throughout its life.
The future of distributed renewable energy will not be shaped by technology alone—it will be shaped by the quality of the agreements that support it.