How Much You Save with Investment on Home Solar Installation?

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Is rooftop solar panels worth the investment? Should you consider rooftop solar instalments as an investment option? The answer is yes. You can generate around 120-150 units of electricity with a 1 kW solar system which costs Rs.90,000 to Rs. 1,30,00. Learn the amount of money that you can save annually with an investment in home solar installation.

Saving Money with Home Solar Panel Installation

Solar panel installation on your home rooftop paves an avenue to increase savings. Here are the ways you can save with solar panel installation:

1) Reduced Electricity Bills after Solar Installation

A solar panel of 1 kW on your rooftop generates approximately 4-5 units of electricity each day. An on-grid solar system requires net metering for monitoring net exports or imports to and from the grid. You will get a bill after calculating how much you import to the grid and export from the grid.

The provision of net import/export helps reduce your monthly electricity bills. You can learn about the monetary value of savings in the sections below.

2) Government Subsidy to Reduce Installation Cost

The Indian government provides subsidies on solar panel installation under the PM Surya Ghar Muft Bijli Yojana. You can avail of subsidies up to Rs. 78,000 for installing solar panels of different capacities.

As a result, solar panel installation helps you save on the total installation cost. To know about the costs and savings, continue reading the sections below.

3) Savings Against Utility Inflation

The per unit electricity cost in India is between Rs.6.29 (it varies across states). The cost of each unit of electricity is increasing with every passing year. Installing a solar panel will help you pay for net imported units of electricity at an inflated cost.

You will have to pay for all the imported electricity units at an inflated rate if you do not have an on-grid solar system at your house. With a solar panel, you can increase your future savings effectively.

How Much Does a Home Solar Panel Save on Monthly Electricity Bills?

In a month, a solar panel of 1 KW generates around 4×30 = 120 units of electricity. Similarly, in a year, it generates 12×120 units = 1440 units of electricity.

If the cost of electricity is Rs. 8 per unit, you will save Rs. 8×120 units = Rs. 960 per month. As a result, your annual savings with a 1 kW solar system will be Rs 960 * 12 = Rs. 11,520.

The table below illustrates your annual savings for various capacities of solar panels:

Solar Plant’s Capacity

Annual Electricity Production (Units)

Annual Savings (Rs)

1 kW



2 kW



3 kW



5 kW



8 kW



10 kW



How Much Can You Save on Solar Panel Installation?

As per Pradhan Mantri Surya Ghar Muft Bujli Yojana, the government increased the subsidy from Rs. 18,000 per kW to Rs. 30,000 per kW. The consumer receives Rs. 60,000 on a 2 kW plant. The maximum subsidy goes up to Rs. 78,000 for a solar plant of  3 kW or more.

This solar panel installation subsidy helps you save on the total solar panel installation cost of your residential rooftop solar system.

Return on Solar Investment in 2024

Return on investment in solar panels is relatively higher than other market instruments. Consider the example below to understand the return on investment:

The cost of a 3 kW solar system before subsidy= Approximately Rs. 2,00,000

Subsidy = Rs. 78,000

The cost of the 3 kW solar system after subsidy = Rs. 1,22,000

Electricity generated by a 3 kW solar system annually = 4320 units

Savings = Rs. 4320×8 = Rs. 34,560

Annualised return on investment = (Rs. 34,560 / Rs. 1,22,000) x 100 = 28.32%

Thus, solar system installation not only increases your savings but also helps you earn high returns on your investment.

If you want to install a home solar system installation at the best price, what you should ideally do first is to get quotations from your local installers and compare them. This process may seem time-consuming.

Das Energie Private Limited makes this quotation collection and comparison process seamless with its online platform. Plus, the partnered vendors of Das Energie and empanelled at DISCOM and follow all the government-directed installation guidelines so that you can get the solar subsidy.

Rooftop solar investment helps you save in multiple ways. Reduced monthly electricity bills, reduced total home solar installation cost and protection against utility inflation are the prominent ways to save money with residential solar systems.


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