Calculate the full financial case for rooftop solar — payback period, annual ROI, net profit, and 25-year earnings. Includes PM Surya Ghar subsidy and maintenance costs.
Solar Investment Economics in India
Solar is one of the few investments that combines government subsidies, rising electricity tariffs (5%+ per year), and 25-year warranties — making it consistently attractive.
What Drives ROI?
Tariff rate & escalation — Higher tariffs mean more savings. India's electricity tariffs have risen 5–8% annually. Our calculator accounts for this escalation.
PM Surya Ghar Subsidy — ₹30,000/kW for first 2 kW + ₹18,000 for third kW (max ₹78,000). This directly reduces your investment cost and improves ROI.
Commercial solar advantage — Businesses get 40% accelerated depreciation in Year 1, reducing tax liability. This can improve effective ROI by 5–10%.
Net metering — Exporting surplus to the grid earns additional credits, especially on weekends or holidays when consumption is lower.
Residential vs Commercial Solar ROI
Residential: 15–25% annual ROI, 4–7 year payback. Lower tariffs but government subsidies help.
Commercial/Industrial: 20–35% annual ROI, 3–5 year payback. No residential subsidy, but higher tariffs, accelerated depreciation, and higher daytime usage.
Frequently Asked Questions
Residential solar in India typically delivers 15–25% annual ROI and 4–7 year payback. Commercial solar delivers 20–35% ROI with 3–5 year payback due to higher tariffs and daytime consumption. These are among the best risk-adjusted returns available for a physical asset.
A 5 kW system costing ₹2 lakh after subsidy saving ₹4,000/month (growing 5%/year with tariff escalation) accumulates ₹18–22 lakh in lifetime savings. Net profit after all costs is ₹15–20 lakh — a 750–1000% total return over 25 years.
Solar needs minimal maintenance. Annual cleaning costs ₹500–2,000 for a 3–5 kW system. The inverter (5–10 year warranty) may need replacement once (₹20,000–50,000) over the 25-year life. AMC contracts typically cost ₹2,000–5,000/year and cover inverter servicing and monitoring.
Yes. PM Surya Ghar scheme offers collateral-free loans up to ₹2 lakh at subsidised rates. Many banks (SBI, Canara, Union Bank) and NBFCs offer solar loans at 9–12% p.a. with 5–7 year tenure. Even with a loan, EMI is typically lower than electricity bill savings from Day 1.