Rooftop Solar in India: Cost, Subsidy, Savings, Net Metering and How to Get Started

Rooftop solar lets a home generate part or all of its electricity during the day, cutting the grid bill for 25 years or more. For many households the payback is four to six years, after which the electricity is nearly free. This guide explains how to size a system, what the central subsidy covers, how net metering works and how to avoid poor installers.

How much will you save?

In most of India, one kilowatt of panels generates about 4 to 5 units (kWh) of electricity on an average day, or roughly 1,400 to 1,600 units a year, depending on location, orientation and shading. A 3 kW system therefore produces around 4,380 units a year at a conservative 4 units per kW per day. At a tariff of ₹7 per unit, that is roughly ₹30,660 a year of avoided bills. Because tariffs differ by state and slab, and a higher bill means a higher saving per unit, test your numbers with the solar panel savings calculator and read your current charges with the electricity bill calculator.

Sizing your system

Look at your last twelve bills to find your average consumption, and size the system to cover most of it, not more, unless your state pays well for exported units. Shade from trees, tanks and neighbouring buildings can cut output significantly, so ask for a shadow analysis.

What does it cost?

Residential systems have been priced in the range of roughly ₹50,000 to ₹70,000 per kW before subsidy, though prices vary by brand, state and size. A 3 kW system may therefore cost around ₹1.8 to ₹2.1 lakh before subsidy. Treat any figure as indicative, collect at least three written quotes and compare them per kW, with the same panel and inverter specification.

The central subsidy: PM Surya Ghar

The PM Surya Ghar: Muft Bijli Yojana offers central financial assistance for rooftop solar on residential homes. As launched, the subsidy is ₹30,000 per kW for the first 2 kW and ₹18,000 for the third kW, capped at ₹78,000 for systems of 3 kW and above. The scheme also promotes concessional loans and aims at up to 300 units of free electricity a month for beneficiary households, in effect, by offsetting consumption. Some states add their own subsidy. The scheme has its own national portal where you register, choose a registered vendor, get the installation inspected and receive the subsidy in your bank account. Check the portal for the current rates and conditions before you commit.

Payback example

This example ignores tariff rises, panel degradation of around 0.5% a year and maintenance, which roughly offset each other in a basic estimate. If you pay for the system with a loan, compare the EMI and interest with your savings using the EMI calculator.

Net metering

With a grid-connected system, surplus electricity flows to the grid and you receive credit for it on your bill, according to your state's net metering rules. You need approval from your electricity distribution company, a bidirectional meter and a technical inspection. During a grid outage a standard grid-tied system shuts down for safety, so for backup power you need a hybrid inverter with batteries, which adds cost.

Choosing an installer

1. Use vendors registered on the national portal or with your state agency if you want the subsidy.
2. Ask for the design, shadow report and a written scope: panel make and wattage, inverter, structure, cables and protection.
3. Check panel certifications and whether the panels come from approved lists required by the scheme.
4. Compare warranties: panels usually carry 25-year performance and 10 to 12 years product warranties, and inverters 5 to 10 years.
5. Ask about installation time, who handles the discom paperwork, and the after-sales service plan.
6. Do not pay the full amount upfront. Stage payments against delivery, installation and commissioning.

Maintenance

Clean panels with water every few weeks, or more often in dusty areas, early in the morning. Check the inverter display or app for faults and output, and have the structure and wiring inspected once a year. Replace the inverter after about 8 to 12 years. Monitoring output against expectations helps catch problems early.

Is it worth it?

Solar is a strong investment for homes with a daytime electricity use, good roof exposure and a high tariff. It is a weaker one if your bill is small, your roof is shaded or you plan to move soon. Rules, subsidies and tariffs change, so confirm the latest terms with your electricity provider and the official scheme portal.

Frequently asked questions

How much subsidy is available for rooftop solar?

Under PM Surya Ghar, ₹30,000 per kW up to 2 kW and ₹18,000 for the third kW, with a cap of ₹78,000, subject to the scheme terms at the time.

How many units does a 3 kW system produce?

Roughly 4,000 to 5,000 units a year, depending on location and shading.

What is the payback period?

Commonly four to six years after subsidy, depending on cost and your tariff.

Will my solar work during a power cut?

A standard grid-tied system shuts off for safety. You need batteries and a hybrid inverter for backup.

What is net metering?

A billing arrangement where surplus power you send to the grid is credited against your consumption.

How do I choose an installer?

Pick a registered vendor, compare detailed written quotes per kW and check warranties and service support.

Last reviewed 8 November 2026. Rates, limits and rules change, so confirm figures with the official source before you act.