How to Calculate Solar ROI for Your Home in 2025

Understanding the return on investment (ROI) for your solar installation is crucial for making an informed decision. In this comprehensive guide, we'll walk through the exact calculations used by industry professionals. ## Key Factors Affecting Solar ROI 1. **System Cost**: The total installation cost including panels, inverters, mounting structures, and labor. In 2025, expect ₹65,000-₹71,000 per kW for residential systems. 2. **Government Subsidies**: PM Surya Ghar scheme offers up to ₹78,000 for systems up to 3kW, reducing your net investment significantly. Learn more about [solar financing options](/guides/solar-financing-india) including loans and subsidies. 3. **Electricity Savings**: Your current monthly bill and tariff rates determine how much you'll save. Average savings are 70% for properly sized systems. 4. **Net Metering Benefits**: Selling excess power back to the grid can add ₹2,000-4,000 monthly income. 5. **Maintenance Costs**: Typically 1-2% of system cost annually for cleaning and inspections. Check our [maintenance and AMC packages](/contact) for professional support. ## ROI Calculation Formula Simple ROI = (Total Savings over System Life - Total Costs) / Total Costs × 100 Payback Period = Net Investment / Annual Savings ## Real Example: 15kW Delhi Home - System Cost: ₹10,05,000 - Government Subsidy: -₹78,000 - Net Investment: ₹9,27,000 - Monthly Electricity Bill: ₹8,000 → ₹2,000 - Monthly Savings: ₹6,000 - Annual Savings: ₹72,000 - Net Metering Income: ₹36,000/year - Total Annual Benefit: ₹1,08,000 **Payback Period**: 9,27,000 / 1,08,000 = 8.6 years **25-Year ROI**: ((₹1,08,000 × 25) - ₹9,27,000) / ₹9,27,000 × 100 = 190% However, with electricity prices rising 5% annually, actual ROI exceeds 300%! ## Factors That Improve ROI - Higher electricity tariff in your area - Good sun exposure (south-facing roof) - Proper system sizing to avoid excess capacity - Quality components with longer warranties - Efficient net metering arrangement ## Online ROI Calculators Use our [Solar ROI Calculator](/calculator) for personalized estimates based on your location, roof size, and current electricity consumption. ## Conclusion With subsidies and rising electricity costs, residential solar typically pays for itself in 3-5 years, delivering 25+ years of nearly free electricity thereafter. The environmental benefits are an added bonus to the compelling financial case.