About the ROI Calculator
Solar ROI (Return on Investment) and payback period tell you how quickly a rooftop or commercial solar system recovers its cost through electricity-bill savings, and what it returns over its 25-year life.
Formula
Simple payback (years) = Net system cost ÷ Annual savings
- Net system cost
- Cost after PM Surya Ghar / any subsidy (₹)
- Annual savings
- Units generated per year × electricity tariff (₹)
ROI (%) = (Lifetime savings − Net cost) ÷ Net cost × 100
- Lifetime savings
- Cumulative bill savings over the system life (₹)
How to calculate it
- 1Estimate annual generation (system kW × your state's kWh/kW/year yield).
- 2Multiply by your electricity tariff to get annual savings.
- 3Subtract any PM Surya Ghar subsidy from the gross cost to get net cost.
- 4Divide net cost by annual savings for simple payback; for a true return, discount future savings to compute NPV and IRR.
Worked example
A 3 kW residential system costs ₹1,80,000 gross, minus ₹78,000 PM Surya Ghar subsidy = ₹1,02,000 net. Generating ~4,500 kWh/year at ₹7/kWh = ₹31,500/year savings → simple payback ≈ 3.2 years, after which the electricity is effectively free for 20+ years.
What you can calculate
- 25-year forecast
- NPV & IRR
- Payback period
- Tax benefits
Standards & references
Frequently asked questions
What is a typical solar payback period in India?
For residential rooftop solar with the PM Surya Ghar subsidy, payback is typically 3–5 years. Commercial and industrial systems (higher tariffs, accelerated depreciation) often pay back in 3–4 years. After payback, the system keeps generating for 20+ years at near-zero marginal cost.
Does the PM Surya Ghar subsidy change my ROI?
Significantly. The central subsidy (up to ₹78,000 for a 3 kW system) reduces your net cost by roughly 40%, which shortens payback by 1.5–2 years and lifts lifetime ROI proportionally.
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