Cost of solar power systems in India for domestic installation

In this article, I will explain how economical it is to install a household solar power system in India. Details about the expenses involved in installing solar panels on their rooftops will also be brought out.


Solar power is the power generated through solar photovoltaic cells. A solar panel will have a number of solar photovoltaic cells in it. The power generated by the solar panels is Direct Current(DC) power, which can not be connected directly to our household electric appliances. So, it needs to be converted into Alternating Current(AC) power before it could be used for different electric appliances. For converting the solar power from DC to AC, we need an inverter and batteries along with solar panels.

Cost of solar installation

The main components used in solar power systems are solar panels, batteries and an inverter having charge controller circuit in it. The charge controller circuit is useful in making the battery life longer. The other accessories include mounting equipment for solar panels, wires, switches, etc. Solar panel is the main component, which generates the required power in the system. Sometimes, panels can be directly connected to DC operated appliances but not the AC operated appliances. Cost of solar panels varies from manufacturer to manufacturer. If ordered in bulk quantities, they can be any where between Rs.30 and Rs.60 per watt. If we take the average price to be Rs.50 per watt, the total price of solar panels may come around Rs. 1,50,000 for a 3 Kilo Watt(KW) system. A 3KW system can be used for powering a house and replacing the domestic grid connection. As we already know that the solar panels are not enough for powering a house, we need to purchase an inverter and sufficient batteries for it. The cost of solar inverter can be any where between Rs.30,000 and Rs.40,000 for a 3KW system. Similarly, the cost of batteries will vary depending on its ampere-hour capacity. More ampere-hour capacity means more back up time. So, for a battery to sustain power for the whole day, we may need to invest at least Rs. 60,000 to Rs. 80,000. All the above mentioned prices are approximate values. Their real prices may depend on the manufacturer. If we take the average cost of the inverter to be Rs. 35,000 and the average cost of batteries to be Rs. 70,000, then the total solar installation setup will cost us around Rs. 3,00,000, which includes expenses of other accessories and installation charges. We can manage a 3 KW inverter with less than 3KW panels also. But for safe side, we have taken 3KW panels as there will be less sunlight during winter season. Here, a 3KW system has been taken up because, except air conditioners, we can connect almost all types of domestic electric appliances to it at a time. If the power requirement is more, we can go for higher Kilo Watt systems, which can cost us further.

Government subsidy availability

Previously through NABARD, Government of India was providing a maximum of 30 per cent subsidy on the total capital outlay for the off-grid solar installations under the program Jawaharlal Nehru National Solar Mission. Now, the Government is providing a maximum of 40 per cent subsidy on the total capital outlay for the off-grid solar installations from 15/03/2012. But the Government provides subsidy for only those models, which are approved by Ministry of New and Renewable Energy(MNRE). Benchmark price per watt, which the Government provides, is Rs. 190 for a 3KW system. This value changes depending on the Kilo Watt rating of the system. For each watt, if the installed system costs more than the benchmark price, Government provides subsidy only for Rs. 190 and if it costs less than the benchmark price, the Government provides 40 percent of the total costs incurred. The benchmark prices are revised every year. The percentage of subsidy is more for some special category states.

Update - According to the Government of India notification dated on 4th March, 2016, the Government is providing subsidy up to 30 percent of benchmark price for general category states and up to 70 percent of benchmark for special category states. According to the notification, there won't be any subsidy for industrial and commercial entities in the private sector. The benchmark cost per watt for a 3 KW system without battery is Rs. 90 whereas with battery, it is still remained at Rs. 190.

Comparing with utility power

Though the system requires lot of initial investment, it is eco friendly in nature. Generally in India, the electric units are billed in slabs. The slab rates can vary from Rs.1.50 for initial slab units to Rs.9.00 for final slab units depending on the slab rates of different states. If we take the average unit cost of electricity to be around Rs. 4 and taking 300 units of power is what an average Indian household consumes per month, the monthly electricity bill will be Rs. 1200. With the 3KW system, the generated power per month will be approximately 450 KWH units, depending on the availability of the sunlight. Though we can generate 300 units of power with a 2KW system, by doing so the higher powered domestic appliances can not be connected to the system and it is also not guaranteed that you will consume only 300 units per month. Hence we considered a higher powered system. With the system, the average monthly savings on your electric bill is Rs. 1200. So, per year you will save Rs. 14,400. From the above calculations, you need to wait up to 21 years to recover your initial capital outlay of Rs. 3,00,000, provided you didn't avail the Government subsidy. Sometimes, you may have to forgo the Government subsidy because, getting subsidy is a tedious process and you have to buy the system only from the MNRE approved manufacturers, who may quote more compared to other manufacturers. Battery maintenance is also a big issue in solar systems and you have to continuously replace your batteries, which will add up extra cost and your recovery time.


So, from the above analysis, we can conclude that Government is spending lot of money to generate electricity and providing us at cheaper rates. So, it is our responsibility to save the power to the maximum extent. If you are in a position to afford a solar power system, you can go for it. Others, who are not in a position to afford that much money, can simply go for solar panels, DC fans and LED lights with battery back up. During day times, solar panels can directly be connected to DC fans, but depending on the sunlight the fans will rotate with variable speed. You have to make sure that the maximum output voltage of the solar panel does not exceed the maximum voltage rating of the fan. Similarly, also make sure that the power rating of fan does not exceed the power rating of the solar panel. If the fan is turned off for some time, the battery of the LED lights can be charged during that time and these lights can be used in the nights.


Author: Kailash Kumar13 Apr 2016 Member Level: Platinum   Points : 4

Before going for installation of domestic solar power systems, perhaps one should look into following aspects -
1. Reduction of usage or increasing efficiency - replacing regular lamps with CFLs and LEDs and using energy star rated equipment can bring huge energy savings.
2. Find out how much space i.e. sq.ft of roof/balcony area is available in order to install a solar panel.
3. Estimate as to how much electricity you require per day by looking at your last month's electricity bill.
4. The average life of a solar panel is 25 years and in absence of any moving parts or electronics practically no maintenance is required provided equipments of only good quality are installed initially.
5. Always buy a good battery of a reputed brand.

Author: Natarajan07 Sep 2017 Member Level: Gold   Points : 3

Great article, as we, in India, with our ever increasing population, the need for energy source is also shooting up.
Right now we are depending more on non-renewable and eco-unfriendly methods of energy. Take the LPG gas cylinders for instance, the government subsidy is being withdrawn and we are voluntarily giving it up. In a similar way traditional means of generating electricity is going to be more and more expensive and we may end up paying more.

Government is making people more aware of alternative energy, energy saving lighting etc. Once we start harnessing solar power, wind power and rain water harvesting we can make an impact on our carbon footprint, green environment targets and ease up the demand for non-renewable energy sources.

Author: Umesh09 Sep 2017 Member Level: Diamond   Points : 3

The solar energy installations are now picking up in our country mainly because of Govt subsidy.
As far as maintenance of these systems are concerned, batteries are a big issue and the set of batteries may require replacement over a period of 3-4 years and that is one big expenditure which the person going for it has to incur every time after 3-4 years.

Anyway, in the long run it is a viable and clean energy option for us.

Author: T.M.Sankaran20 Sep 2017 Member Level: Gold   Points : 7

Changing over to solar system of power production will be definitely advantageous, not only because it will help in cutting the electricity bill, but also because it will help to preserve the nature. Initial cost, especially the price of batteries will be a bit high. And the life length of batteries is limited to six or seven years. Replacement of batteries after that again invite additional cost. These cost factors are discouraging many people for a change over to solar energy.
In Kerala, the Electricity board has introduced a scheme whereby the consumers who opt for solar energy need not go for batteries (which are for preserving the current produced during day time when Sun is present for the use during night), but can transfer the power generated to the grid of the electricity board. They will in turn supply back the necessary power for the consumer. There will be a different type of meter connected which will indicate how much unit of power is transferred to the grid and how much the consumer has produced and transferred to the grid. If consumer's consumption is more he may have to pay to the Board. Otherwise the Board will pay the consumer for the units of power transferred. Perhaps the same will be adjusted in the next bill. Many people have started going in for this option.

Guest Author: firoz ahmad18 Mar 2018

comment on domestic use / government offer

Author: Neeru Bhatt10 Sep 2018 Member Level: Gold   Points : 0

Due to the hassles of maintenance of the solar power generator and replacement of costly batteries, this area is not picking up fast. Still, with Govt subsidies and longtime perspective, it is a good idea to install solar power in our houses.

Author: Reena Upadhya15 Sep 2018 Member Level: Gold   Points : 8

Each passing day, electricity seems to be becoming more and more expensive. Thus, using solar energy in order to meet the requirements of electricity is indeed a great approach. It is a very detailed article that will give readers useful information related to solar equipment installation and charges pertaining to the equipment.

Indian solar panels and imported ones do not have much difference when it comes to price. If you are interested in seeking subsidy, panels made in India is the only option left. If you want to cut down on price, go for modules which have high Watt power instead of those modules which have a low capacity of Watt power.

Polycrystalline and Monocrystalline are the two different types of solar PV cells. Polycrystalline or multi-crystalline is made from many crystals. Only one silicon crystal is used to make monocrystalline solar PV cells. However, monocrystalline solar PV cells work more efficiently than polycrystalline to convert solar energy into electrical energy per sq meter area. When compared to polycrystalline, required space for the similar amount of wattage is relatively less in case of monocrystalline. Thus, monocrystalline is expensive than polycrystalline. Most of the solar panels that are available in India are polycrystalline.

Panel efficiency percentage in India is 13-19%. If the efficiency is low, you will require more panels in order to convert solar energy into electrical energy. It will take up more rooftop space. Get a grid connector solar PV system if power cuts in your area are not frequent and you want to cut down on your electricity bill. Go for Off-grid solar PV system if power cuts in your area are very frequent.

Author: K Mohan18 Sep 2018 Member Level: Platinum   Points : 3

I would thank the author for giving in-depth details about the importance and usage of solar power for the domestic use and its growing popularity. Normally the middle-class society feels that solar power is for the rich and affluent class of the society as it is a costly affair to afford. Moreover, most of the middle-class families are living in rented houses and they cannot install solar panels on the roof without the permission of the owners or the apartment consent. And coming to the cost point of view, there is no awareness created by the government as to the loans available for installing solar panels in the homes as also what interest the banks would charge?

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