The idea in one sentence

Every industrial project is paid for in two ways: a big spend at the start, then small spends that recur every year. The first is called CAPEX, the second OPEX. Telling them apart is the basis of any investment decision.

CAPEX — the investment spend

CAPEX means Capital Expenditure. It is the money spent once to acquire a durable asset that will serve for years:

• controllers, drives, sensors;
• machines, pumps, motors;
• building construction, civil works;
• installation, wiring, commissioning.

In accounting, you do not expense this all at once: you spread it over the equipment’s service life. That is straight-line depreciation:

$\text{annual depreciation} = \frac{\mathrm{CAPEX}}{\text{service life}} = \frac{20\,000}{10} = 2\,000\ \text{€/yr}$

A controller bought for €20,000 and depreciated over ten years thus “costs” €2,000 per year in the accounts, even though the cash went out in the first year.

OPEX — the operating spend

OPEX means Operational Expenditure. It is the money spent continuously to run the asset, year after year:

• energy: electricity, gas, compressed air, steam;
• maintenance: parts, contracts, interventions;
• operating staff;
• consumables, fluids, software licenses.

Unlike CAPEX, OPEX is a recurring charge. It does not depreciate: it is paid every year, as long as the plant runs.

Why this distinction changes everything

The classic trap is to pick equipment on purchase price alone. Yet cheaper-to-buy gear can cost far more to use. Take two motors:

	Motor A	Motor B
Purchase price (CAPEX)	€1,000	€1,400
Consumption (OPEX/yr)	€1,200	€900
Cost over 10 years	€13,000	€10,400

Motor A is cheaper to buy, but its over-consumption makes it €2,600 more expensive over ten years. That is exactly the reasoning behind high-efficiency motors (IE3, IE4): a higher CAPEX justified by a lower OPEX. A 75 kW motor running 6,000 h/yr alone consumes about €54,000/yr of electricity (at €0.12/kWh) — far more than its purchase price in the very first year.

The CAPEX-to-OPEX shift

A strong industry trend: turning CAPEX into OPEX. Instead of buying a server (CAPEX), you rent cloud (OPEX). Instead of buying a machine, you pay per use. The upside: less capital tied up at the start, more flexibility. The downside: over the long run, renting often costs more than buying.

This choice is therefore not just technical: it commits the company’s cash and strategy.