Rooftop solar is an upfront cost that pays you back through smaller electricity bills. Whether it is worth it comes down to three things: what the system costs after any subsidy, how many units it saves you, and what each of those units is worth.
A made-up example
Take a 3 kW system costing ₹1.8 lakh with no subsidy, on a home that uses 300 units a month at an average of ₹7 a unit. Assume each kW produces 4 units a day and the panels lose 0.5% of their output a year. These are illustrative numbers, not a quote or a forecast.
- The system makes about 3 × 4 × 365 = 4,380 units in the first year, against 3,600 units used.
- So it covers the whole bill: ₹300 × 7 × 12 = ₹25,200 a year.
- ₹1.8 lakh ÷ ₹2,100 a month = about 86 months, or 7.2 years, to pay back.
- Over 25 years it saves about ₹6.3 lakh in bills: a net gain of ₹4.5 lakh, a return of about 14% a year.
- Bill savings so far, less the system’s cost
Years from installing
See the numbers
| Years from installing | Bill savings so far, less the system’s cost |
|---|---|
| Today | −₹1.80 lakh |
| Year 1 | −₹1.55 lakh |
| Year 2 | −₹1.30 lakh |
| Year 3 | −₹1.04 lakh |
| Year 4 | −₹79,200 |
| Year 5 | −₹54,000 |
| Year 6 | −₹28,800 |
| Year 7 | −₹3,600 |
| Year 8 | ₹21,600 |
| Year 9 | ₹46,800 |
| Year 10 | ₹72,000 |
| Year 11 | ₹97,200 |
| Year 12 | ₹1.22 lakh |
| Year 13 | ₹1.48 lakh |
| Year 14 | ₹1.73 lakh |
| Year 15 | ₹1.98 lakh |
| Year 16 | ₹2.23 lakh |
| Year 17 | ₹2.48 lakh |
| Year 18 | ₹2.74 lakh |
| Year 19 | ₹2.99 lakh |
| Year 20 | ₹3.24 lakh |
| Year 21 | ₹3.49 lakh |
| Year 22 | ₹3.74 lakh |
| Year 23 | ₹4.00 lakh |
| Year 24 | ₹4.25 lakh |
| Year 25 | ₹4.50 lakh |
₹1.8 lakh, no subsidy; 300 units a month at ₹7; 4 units a kW a day, 0.5% less each year. Above zero, the system has paid for itself.
Units beyond your own use
In that example the panels make about 22% more than the house uses. Those extra units are only worth something if your electricity company credits them. If it does not, a smaller system could pay back faster. The tool has a field for the credit per exported unit; leave it at zero if you get none.
| System | Costs | Saves in year 1 | Pays back | After 25 years |
|---|---|---|---|---|
| 2 kW | ₹1.20 lakh | ₹20,440 | 6 years | ₹3.61 lakh |
| 2.5 kW | ₹1.50 lakh | ₹25,200 | 6 years | ₹4.51 lakh |
| 3 kW | ₹1.80 lakh | ₹25,200 | 7 years 2 months | ₹4.50 lakh |
| 4 kW | ₹2.40 lakh | ₹25,200 | 9 years 7 months | ₹3.90 lakh |
Each size priced like the example, at ₹60,000 a kW, on the same 300-unit bill, with no credit for exported units.
Your top slab matters more than your average
Many tariffs bill in slabs, where later blocks of units cost more than earlier ones. Solar cuts the units you buy from the top down, so the first units it saves are your most expensive ones. That is why households with high bills tend to see faster paybacks than the average rate suggests. Once your state’s tariff is verified in our data, the tool will bill slab by slab; until then, use your average price per unit from a recent bill.
What can change the answer
- The subsidy. It comes straight off the cost. Check what applies to you before deciding; we have not verified the current amounts yet.
- Generation. Shade, roof direction and dust all lower it. Use your installer’s estimate for your roof, and be cautious.
- Tariff rises. If electricity gets dearer, solar saves more each year. The tool starts at no rise and lets you change it.
- Inverter replacement. If you expect to replace the inverter within the period, add the year and the cost your installer quotes.
Try it
Your roof, your bill
- Saves in the first year
- ₹25,200
- Pays back
- 7 years 2 months
- Ahead after 25 years
- ₹4.50 lakh
4 units a kW a day, 0.5% less each year, no credit for exported units, no tariff rise. The full calculator lets you change all of these.
Run your own numbers in the tool. The “what would flip the answer” list will tell you the system price and generation at which solar stops paying back.
For education only. Not investment, tax or insurance advice. Examples use the figures stated in the guide; check your own before you act.