BOO vs BOOT: Own the Solar Asset, or Just the Savings?

Once a commercial or industrial business decides that open access energy makes sense, the next question is how to structure it. In the C&I segment, that almost always comes down to one of two models: Build-Own-Operate or Build-Own-Operate-Transfer.

Both deliver power at a tariff below grid. Both run on a long-term power purchase agreement. The difference is what you own when the agreement ends, and how much risk and capital you take on to get there.

BOO, build, own, operate

Under a Build-Own-Operate model, the developer finances, builds and operates the plant for the life of the agreement. You sign a PPA at a fixed tariff and receive cheaper power from the day the plant is commissioned. There is no capital outlay, no asset on your balance sheet and no operational responsibility.

This is the simplest path to a lower energy cost. You carry the savings and none of the asset risk. For most businesses whose priority is a predictable, lower per-unit cost without a capital commitment, BOO is the default choice.

BOOT, built for eventual transfer

A Build-Own-Operate-Transfer model is structured the same way, with one difference: ownership of the plant transfers to your business on a timeline agreed before construction begins. You take on no capital risk upfront, but you end up owning the infrastructure.

This suits businesses that want to own their energy infrastructure eventually, whether for tax efficiency under accelerated depreciation provisions, long-term energy independence, or balance sheet reasons. By the time ownership transfers, the plant has a clean operational track record. You inherit a known asset, not a learning curve.

How to choose between them

Three factors usually decide it. Your capital position: if you would rather deploy capital into your core business than into a power plant, BOO keeps it off your books. Your tax situation: businesses that can use accelerated depreciation often find the eventual ownership under BOOT works in their favour. And your long-term plans for the facility: if you intend to operate the site for decades, owning the generation asset eventually can make sense.

There is no universally correct answer. The right structure depends on your numbers, and a good developer will model both against your specific load and tax position rather than pushing you toward the one that suits them.

Both models are viable across Uttar Pradesh. We have been owning and operating energy assets across the Prakash Group for fifty years, and we structure open access energy around the business in front of us. If you want both models modelled against your facility, get in touch.