Is solar right for you?

How much would solar cost?

On average, 1 kWP (kilowatt peak) can be installed on ~100 square feet of available area. 1 kWP solar plant can cost between ₹ 45,000 to ₹ 75,000 depending on the quality and technology of solar panels, materials used, AMC provided, services and documentation offered, etc. by the installation partner.

Cost of rooftop solar system depends of below factors:

• Plant Size
• Type of Panels
• Backup Required
• Services Offered
• Subsidy Applicable

Choosing Plant Size

An appropriate plant size is chosen based on multiple factors:

• Electricity consumption profile
• Current sanctioned load
• Roof area available

It is advisable to go for a system that would completely offset your electricity bill's variable charges and save taxes paid on them.

Following information is used to size a solar plant:

• Annual Energy Usage (say 4500 units a year)
• Daily Average Peak Sun Hours for production (in India, this is 4-5 hours per day)
• Calculate perfect system size for AC loads (4500 units / [365 days * 4 hours of sunlight * 1kW] = 3.08 kWh per day)
• Calculate rooftop solar plant size (3.08 kWh / 80% = 3.8 kW ~ 4kW system)
• Assess whether the rooftop area can accommodate a plant of this calculated size
• Some State Electricity Boards (SEBs) mandate that a plant cannot be higher than sanctioned load of current connection

Choose Type of Panels

Backup Required (Should I get batteries?)

Battery requirement is driven by below factors:

Services Offered

Various solar installers offer a package of services with the installation. These services of the below forms:

• Warranties on Solar Plant and installed components
• Free Annual Maintenance Costs/Services
• Insurance on Solar Plant
• Elevated Mounting Structures
• Preferential Payment Terms
• DISCOM documentation and approvals
• Subsidy documentation and approvals
• Free cables
• Remote monitoring systems

You can see a considerable difference in prices for seemingly the same kind of solar plant and most of the times, the difference arises from offering one or more of the above services.

As a customer, it is imperative to take a close look at the entire proposal so that you can understand what you are buying. Just looking at price alone may lead you in a troublesome situation

Subsidy on Rooftop Solar

For residential customers, Ministry of New and Renewable Energy (MNRE) provides Rs. 30,000 per kW subsidy on plants up to 2 kW and Rs. 18,000 per kW on additional capacity up to 3 kW. Total subsidy for a connection is capped at Rs. 78000 per connection.

Eligibility

• CFA/subsidy is applicable only for projects applied on National Portal on/after 30.07.2022
• Applications are processed for technical feasibility approval & installation of RTS plant by registered vendors
• The plant capacity eligible for CFA/subsidy would be calculated after factoring in the capacity already installed
• It is essential to install the rooftop solar plant through registered vendors of the concerned DISCOM
• Installation as per the guidelines and technical specifications issued by MNRE
• Only indigenously manufactured solar panels/modules (both solar cells and modules shall be made in India) shall be used for installation of the rooftop solar plant

Under the new procedure, this subsidy would directly come to a customer’s bank account upon submission of relevant documentation and approvals. A consumer can choose to send the surplus electricity generated by the solar plant back to the grid and paying electricity bills for only net usage. This is enabled by net meters installed by electricity distribution companies (DISCOM).

You can read

State Subsidies

Details of state level subsidies are provided here

Tentative rooftop solar prices

~ represents approximate costs. Read factors that affect cost of solar at Cost of Solar section in Solar Research site.

How much will my electricity bill reduce?

Electricity bills across the country have 3 components - Fixed Charge, Variable Charge & Taxes & Surcharges. With solar, you can save below:

What will be my financial return?

Net-metering (On Grid Plant) makes solar installation highly lucrative for customers in two ways:

- Continued electricity even on days with insufficient generation via panels
- Excess electricity generated is netted out of the total electricity consumed
- Generated electricity is setoff against the highest-paid slab tariff
- Save an extra 20% tax on electricity which is paid on top of slab tariffs
- Solar Plants become more and more lucrative as a long-term investment  for consumers in high tarriff
- This is driven mostly by the low cost of energy production with solar
- With subsidies, residential customers can achieve the lowest cost of energy consumption over a period of 25 years

Simple Mathematics of Solar Plants

- 1 kW generates **4-4.5 units a day**
- Generation in 365 days = 365 x 4 to 4.5 units ~ **1,460 to 1,642 units**
- Assuming 80% days with Sunlight = **1,168 to 1,314 units**
- Warranty of 25 years & 80% performance degradation
- For simplicity, assuming 85-90% efficiency throughout the life = **24,820 to 29,565 units** during lifetime
- Cost of 1kW ranges from **Rs. 50,000 to 75,000**
- Adding Rs. 1000 per year (total Rs. 25,000) for maintainance **Rs. 75,000 to 1,00,000**
- Net Cost of electricity = **Total Cost / Total Units** i.e. **~Rs. 2.54 to 3.38 per unit**

(savings on taxes paid for 25 years extra + benefits from government subsidy)

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