Solar Payback & ROI Calculator
Cost after subsidy, the year the system pays for itself, and what it earns for the twenty years after that — with tariff escalation and module degradation both carried through the cash flow rather than assumed away.
System
Tariff and yield
The red line is what you spent. Everything right of the green mark is return — 22 years of it.
Subsidy rates and net-metering terms change, and state top-ups vary. Confirm both before quoting.
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Solar Payback & ROI Calculator · Rooftop subsidy · net metering · 25-year cash flow · EnergyCalcHQ · energycalchq.com
Preliminary calculation. The figures behind it are representative values for the stated conditions, not a substitute for the current edition of the standard or the manufacturer's published data. Verify before issuing for construction. Not a substitute for a qualified engineer or a protection study.
For page numbers, keep Headers and footers ticked under More settings in the print dialog.
Why simple payback is wrong, and in which direction
Divide the cost by the first year’s saving and you get a number that is easy to quote and always too pessimistic. It assumes the tariff never moves. Indian retail tariffs have risen at roughly 3–5 % a year for two decades, which means every unit the array generates in year ten is worth substantially more than the same unit in year one.
Degradation pulls the other way — modules lose about 0.5–0.7 % of their output annually — but it is the smaller effect. Run both year by year and payback typically lands a year or more earlier than the simple figure. Both numbers are shown so you can see the gap.
Not every generated unit is worth the same
A unit consumed while it is being generated displaces one you would have bought at the retail tariff. A unit exported to the grid earns whatever the discom pays under the net-metering or net-billing arrangement, and in most Indian states that is meaningfully less than retail.
The split matters more than people expect. A household that is empty all day exports most of its generation and sees a longer payback than the same system on a house with a daytime load — identical hardware, different economics. Set the self-consumption share honestly.
The subsidy figure
The default follows a residential subsidy slab — ₹30,000 per kW for the first 2 kW, ₹18,000 for the third, capped at ₹78,000 for any system above 3 kW. Schemes of this shape typically apply to residential connections using approved modules, claimed through a national or regional portal.
Confirm it before you quote it. The field is editable because rates are revised, regions add their own top-up, and commercial and multi-dwelling installations follow entirely different rules. If you are outside the region these defaults were written for, clear the field and enter your own figure — everything downstream follows from it. The number here is a starting point, not an authority.
Cost per unit generated
The most useful single figure on the page is the cost per unit over the system’s life: net capital plus upkeep, divided by everything it will generate in twenty-five years. After the subsidy it usually lands between ₹1.30 and ₹2.00, against a retail tariff of ₹7–10 — and nearer ₹2.50 to ₹3.50 on a system too large to qualify for one.
That comparison is the honest way to judge a quote. It is immune to tariff assumptions, it exposes an overpriced installation immediately, and it is the same calculation a utility uses to compare generation sources. If a quote pushes the figure above your tariff, the system will never pay for itself no matter how the escalation is argued.
What is not modelled
Financing cost, inverter replacement at around year twelve, and any accelerated depreciation benefit on a commercial connection are all left out. The first two make the return slightly worse, the third makes it considerably better for a business. Add them yourself for anything beyond a residential rooftop.