Solar Panel Breakeven Calculator

Calculate your solar investment ROI, payback period, and 25-year savings. Includes PM Surya Ghar subsidy calculations.

Your Solar Investment Analysis

Note: Actual generation varies by location, roof angle, shading, and weather conditions. Results are estimates for planning purposes.

Savings vs Investment

What is a Solar Panel Breakeven Calculator?

A Solar Panel Breakeven Calculator is an essential financial planning tool that helps you determine when your rooftop solar investment will pay for itself. It calculates the payback period—the time it takes for your electricity savings to equal your initial investment—and projects your total savings over the 25-year lifespan of solar panels.

In India, with the government's PM Surya Ghar Muft Bijli Yojana offering substantial subsidies (up to Rs 78,000 for residential rooftop solar), solar energy has become an increasingly attractive investment. Our calculator factors in these subsidies along with electricity price inflation and panel degradation to give you accurate financial projections.

Why Go Solar in India?

India receives abundant sunshine throughout the year, making it one of the best countries for solar power generation. Here's why solar panels are a smart investment:

  • Rising Electricity Costs: Grid electricity prices increase by 5-8% annually. Solar locks in your electricity cost for 25 years.
  • Government Subsidies: PM Surya Ghar scheme offers 30-40% subsidy on rooftop solar installations up to 3kW.
  • Net Metering: Export excess power to the grid and earn credits on your electricity bill.
  • Property Value: Homes with solar panels command 3-4% higher resale values.
  • Environmental Impact: A 5kW system offsets approximately 6-8 tonnes of CO2 annually.

How Solar Breakeven is Calculated

The breakeven calculation considers multiple factors:

  1. Net Investment Cost: Total system cost minus government subsidies
  2. Annual Generation: System capacity x Average units per kW per month x 12
  3. Annual Savings: Units generated x Current electricity rate
  4. Panel Degradation: Solar panels lose 0.5-1% efficiency per year
  5. Electricity Inflation: Future electricity rates (typically 5-7% annual increase)

Understanding Key Inputs

System Capacity (kW)

The size of your solar system determines how much electricity it can generate. A typical Indian household with Rs 2,000-4,000 monthly bills needs a 3-5 kW system. Each kW generates approximately 100-130 units per month depending on your location and roof orientation.

Solar Generation per kW

This varies significantly by location in India:

  • Rajasthan, Gujarat: 140-160 units/kW/month (highest solar radiation)
  • Maharashtra, Karnataka: 120-140 units/kW/month
  • Tamil Nadu, Andhra: 110-130 units/kW/month
  • North India (Delhi, UP): 100-120 units/kW/month
  • Coastal/Humid Areas: 90-110 units/kW/month

Panel Degradation

All solar panels degrade over time. Tier-1 panels typically degrade at 0.5% per year, while lower quality panels may degrade at 1-2%. After 25 years, a good panel still produces 87.5% of its original capacity.

Electricity Price Inflation

Historical data shows Indian electricity prices increase 5-8% annually. This is crucial for calculating future savings—as grid electricity becomes more expensive, your solar savings grow proportionally.

PM Surya Ghar Muft Bijli Yojana - Government Subsidy Details

The Indian government offers substantial subsidies under PM Surya Ghar scheme for residential rooftop solar:

  • Up to 1 kW: Rs 30,000 subsidy
  • 1-2 kW: Rs 30,000 + Rs 18,000/kW for additional capacity
  • 2-3 kW: Rs 78,000 total (maximum subsidy for general households)
  • 3-10 kW: Rs 78,000 (subsidy capped at 3kW equivalent)

Additional state subsidies may be available depending on your location, further reducing the net investment cost.

Real-World Solar ROI Example

Scenario: 5 kW rooftop solar system in Mumbai

  • System Cost: Rs 4,00,000 (at Rs 80,000/kW)
  • Government Subsidy: Rs 78,000 (PM Surya Ghar)
  • Net Investment: Rs 3,22,000
  • Monthly Generation: 600 units (120 units x 5 kW)
  • Current Savings: Rs 4,800/month (at Rs 8/unit)
  • Breakeven Period: ~5.5 years
  • 25-Year Savings: Rs 25+ lakhs
  • ROI: 700%+ over system lifetime

Environmental Impact

Beyond financial benefits, solar panels significantly reduce your carbon footprint:

  • 5 kW system: Offsets ~6.5 tonnes of CO2 annually
  • 25-year impact: Equivalent to planting 200+ trees
  • Grid emission factor: 0.82 kg CO2 per kWh in India

Tips for Maximizing Solar Returns

  1. Optimal Roof Angle: South-facing panels at 15-25 degree angle maximize generation in India
  2. Avoid Shading: Even partial shading dramatically reduces output
  3. Choose Tier-1 Panels: Higher initial cost but better long-term performance
  4. Regular Cleaning: Dust reduces efficiency by 15-25% if not cleaned monthly
  5. Monitor Performance: Use inverter apps to track daily generation
  6. Right-size Your System: Match system capacity to your actual consumption

Frequently Asked Questions

How long do solar panels last in India?
Quality solar panels have a lifespan of 25-30 years with proper maintenance. Most manufacturers offer 25-year performance warranties guaranteeing at least 80% output at end of life. The inverter typically needs replacement once in 10-15 years.
What is net metering and how does it work?
Net metering allows you to export excess solar electricity to the grid and earn credits. Your bi-directional meter tracks both import and export. At month-end, you only pay for net consumption (import minus export). Some states pay for excess units exported at grid tariff rates.
How much roof space do I need for solar panels?
Approximately 100 square feet of shadow-free roof space is needed per kW of solar capacity. A 5 kW system requires about 500 sq ft. East-West facing roofs can also be used with slightly lower generation (10-15% less).
Do solar panels work during monsoon or cloudy days?
Yes, solar panels work on cloudy days but at reduced efficiency (20-30% of peak). During monsoon months, expect 40-60% of normal generation. The annual average factors in seasonal variations, so breakeven calculations remain accurate.
Can I get a loan for solar installation?
Yes, several banks and NBFCs offer solar loans at attractive rates (8-12%). SBI, HDFC, and others have specific green energy loan products. Your monthly EMI is often lower than your electricity savings, making it a cash-positive investment from day one.
What maintenance is required for rooftop solar?
Solar systems require minimal maintenance: (1) Monthly panel cleaning with water to remove dust, (2) Annual electrical inspection, (3) Inverter monitoring for errors. Total annual maintenance cost is typically Rs 2,000-5,000 for a residential system.
How do I apply for PM Surya Ghar subsidy?
Register on the official PM Surya Ghar portal (pmsuryaghar.gov.in) with your consumer number and ID. Choose an empaneled vendor, complete installation, and submit net metering application through your DISCOM. Subsidy is credited directly to your bank account after inspection.

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