Solar ROI Calculator — How to Achieve 18%–25% Annual Returns
Introduction
Thinking about switching to solar but unsure about profitability?
A rooftop solar system is not just an environmental upgrade — it is one of India’s highest-return investments, outperforming FDs, mutual funds, and gold.
While fixed deposits deliver 6–7% returns, rooftop solar consistently delivers 18–25% annual ROI, driven by electricity savings, rising tariffs, and government subsidies.
This guide breaks down ROI, payback period, cost structure, generation, and the exact math you need before investing.
Solar ROI (Return on Investment) in India (2026)
Solar ROI refers to the annual financial gain you receive through savings on your electricity bill.
Average Solar ROI in India:
18%–25% per year
(High-consumption homes may see 30%+ ROI)
Why solar gives high returns:
- Zero fuel cost
- Tariffs rise annually
- Subsidies lower upfront cost
- 25-year panel life ensures long-term savings
Cost Structure of a Typical 3 kW On-Grid Solar System
| Component | Budget System (Mono PERC) | Premium System (TOPCon) | Notes |
|---|---|---|---|
| Solar Panels | ₹90,000 – ₹1,10,000 | ₹1,20,000 – ₹1,35,000 | 450–575W |
| Inverter | ₹25,000 – ₹35,000 | ₹40,000 – ₹55,000 | High-efficiency inverters |
| Mounting Structure | ₹12,000 – ₹18,000 | ₹18,000 – ₹25,000 | HDGI or aluminum |
| BOS & Wiring | ₹10,000 – ₹18,000 | ₹15,000 – ₹22,000 | ACDB/DCDB, surge protection |
| Installation | ₹15,000 – ₹22,000 | ₹20,000 – ₹28,000 | Labor + testing |
| Total Pre-Subsidy Price | ₹1,80,000 – ₹2,40,000 | — | Varies by brand |
Net Cost After Subsidy (CFA)
The PM Surya Ghar subsidy offers:
- ₹30,000 per kW up to 2 kW
- ₹78,000 maximum for 3 kW and above
Example Calculation (3 kW):
| Item | Amount (₹) |
|---|---|
| Pre-Subsidy Price | ₹2,10,000 |
| CFA Subsidy | -₹78,000 |
| Net Cost After Subsidy | ₹1,32,000 |
Delhi users get an additional ₹30,000 state subsidy →
Net cost drops to ₹1,02,000.
Solar Electricity Generation & Savings (3 kW System)
Daily Generation: 12–14 units
Annual Generation: 4,300–5,000 units
Annual Savings:
- ₹22,000 – ₹30,000
- Up to ₹45,000/year in Delhi with GBI
Lifetime Savings:
₹6,00,000 – ₹8,00,000+
Solar ROI Calculator – Example (3 kW System)
| Metric | Value |
|---|---|
| Net Cost After Subsidy | ₹1,32,000 |
| Annual Savings | ₹36,000 |
| ROI = (Savings ÷ Net Cost) × 100 | 27% |
| Payback Period | 3.6 years |
Delhi ROI example:
| Metric | Value |
|---|---|
| Net Cost After CFA + Delhi Subsidy | ₹1,02,000 |
| Annual Savings (with GBI) | ₹38,000 – ₹45,000 |
| ROI | 37%–44% |
| Payback Period | 2.3–2.7 years |
Solar ROI Comparison With Other Investments
| Investment | Avg. Returns | Risk Level | Notes |
|---|---|---|---|
| Fixed Deposit | 6–7% | Very Low | Low growth |
| Mutual Funds | 12–15% | Moderate | Market-linked |
| Gold | 8–10% | Moderate | Long-term asset |
| Real Estate | 6–9% | High | Requires high capital |
| Solar Energy | 18–25% | Very Low | Guaranteed bill savings |
Solar is the only investment that pays you back through reduced monthly expenses.
Payback Period (3 kW System)
| Scenario | Net Cost (₹) | Annual Savings (₹) | Payback |
|---|---|---|---|
| With CFA (India) | 1,32,000 | 36,000 | 3.6 years |
| With CFA + Delhi Subsidy | 1,02,000 | 38,000–45,000 | 2.3–2.7 years |
| High-Bill Homes | — | Higher savings | Faster payback |
Best Technology for Maximum ROI
| Technology | Efficiency | Degradation | Good For |
|---|---|---|---|
| Mono PERC | 19–22% | 0.5–0.7% | Budget installations |
| TOPCon | 22–24% | 0.25% | Higher generation & ROI |
| HJT | 24–26% | <0.2% | Long-term performance |
Higher efficiency = more units generated = faster ROI.
Inverter Reliability, Warranty & Replacement
- Efficiency: Up to 99%
- Warranty:
- Panels: 25 years
- Inverter: 5–10 years
- Replacement expected: Year 10–15
- Cost of replacement: ~15–20% of total system value
Operational & Maintenance Tips for Maximum ROI
- Clean panels every 15–20 days
- Ensure no shading (trees, walls, water tanks)
- Perform annual health checks via professional service
- Monitor using the inverter mobile app
- Tighten wiring and check earthing every 12–18 months
Regulatory Requirements for ROI-Eligible Systems
- System must be on-grid (net metering)
- Install only MNRE-approved vendors
- Use ALMM/DCR-compliant solar panels
- Apply through the official portal:
👉 https://pmsuryaghar.gov.in/
Documents Required:
- Latest electricity bill
- Aadhar ID
- Property proof
- NOC if tenant
Who Should Use a Solar ROI Calculator?
- Homes with monthly bills >₹2,000
- Households using 200–800 units/month
- Anyone planning for long-term savings
- Families wanting energy independence
- Homeowners planning a 25-year, low-risk investment
Solar ROI in Delhi (2026)
| Parameter | Value |
|---|---|
| Base Cost (3 kW) | ₹1,90,000 – ₹2,20,000 |
| Net Cost After CFA + State Subsidy | ₹1,02,000 – ₹1,15,000 |
| Payback | 2.3–2.8 years |
| Annual Benefit (With GBI) | ₹38,000 – ₹45,000 |
Delhi remains India’s highest-return solar market.
Conclusion
Solar is one of the smartest financial decisions you can make in 2026. With high returns, government backing, and reduced dependency on DISCOM bills, a rooftop solar system pays for itself within a few years and continues to generate savings for 25+ years.
Using the Solar Squad ROI Calculator helps you get a precise, personalized estimate of cost, subsidy, savings, and payback period.
Get a Free ROI Report from Solar Squad
Ready to calculate your ROI and get a customized solar plan?
👉 Request a Free ROI Analysis: https://solarsquad.in/contact
FAQs
Typically 18–25% annually, depending on usage and sunlight availability.
Typically 3–4 years, and 2–3 years in Delhi.
Yes — subsidy lowers net cost, reducing payback time significantly.
12–14 units/day, ~4,500 units/year.
On-grid systems with net metering provide the highest returns.
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