← Business Models: Core (all topics)
Turnkey vs equipment-only supply
What it is
Whether a supplier sells the machine or delivers a commissioned, working installation. Turnkey bundles design, procurement, civil works, erection and commissioning into one contract at a single price; equipment-only supply ends at despatch
Utility-scale solar, wind, process plant, power equipment and water treatment are all contracted both ways
Impact on industries
- Turnkey multiplies contract value, since the price includes materials, civil works and construction the equipment maker would otherwise never bill
- Customers without in-house project capability prefer a single point of accountability, which is why turnkey dominates in developing infrastructure markets
- It imports risks the manufacturer cannot control - land, clearances, evacuation and site conditions all sit between the order and revenue recognition
- Working capital is consumed across a long build, unlike an equipment sale recognised on despatch, so order-book growth can be cash-negative