ROI & Finance

Solar ROI Benchmarks by System Size in India

Published ·Updated ·7 min read

Direct answer

On typical 2026 Indian assumptions a subsidised 3 kW residential rooftop pays back in about 3.5–4 years, a 5 kW in about 4.5 years, a 10 kW unsubsidised residential system in about 5 years, and a 50–100 kW commercial system in about 4–5 years before accelerated depreciation — driven mainly by the tariff being offset, not by system size.

The assumptions behind every number here

  • Specific generation: 1,480 kWh per kWp per year (≈4.05 kWh/kWp/day), typical of a 5.2–5.5 kWh/m²/day irradiance band at a 78% performance ratio.
  • Turnkey prices: ₹70,000/kW at 3 kW, ₹65,000/kW at 5 kW, ₹58,000/kW at 10 kW, ₹45,000/kW at 50 kW, ₹42,000/kW at 100 kW — GST inclusive.
  • Offset tariff: ₹7.50/kWh residential, ₹9.00/kWh commercial.
  • Central subsidy applied to residential 3 kW and 5 kW only (₹78,000 cap); no state top-up assumed.
  • Simple payback, no tariff escalation, no financing cost, no accelerated depreciation.

Benchmark table

SizeAnnual yieldNet cost after subsidyYear-1 savingSimple payback
3 kW residential4,440 kWh₹1,32,000₹33,300≈4.0 years
5 kW residential7,400 kWh₹2,47,000₹55,500≈4.5 years
10 kW residential14,800 kWh₹5,80,000₹1,11,000≈5.2 years
50 kW commercial74,000 kWh₹22,50,000₹6,66,000≈3.4 years
100 kW commercial1,48,000 kWh₹42,00,000₹13,32,000≈3.2 years
Indicative payback by system size, 2026 assumptions

Why commercial payback beats residential

Commercial systems offset a higher tariff (₹9.00 vs ₹7.50) at a lower cost per kW (₹42,000 vs ₹70,000) — a roughly 2× swing in economics that has nothing to do with panel efficiency. Accelerated depreciation shortens it further.

Tariff escalation changes the story

The table uses a flat tariff, which understates lifetime returns. At 5% annual tariff escalation, the 5 kW system's cumulative 25-year saving rises from about ₹13.9 lakh to roughly ₹26.5 lakh, and payback shortens by around six months. Every SolvSolar proposal renders this as a cumulative savings arc on the cover page so the client sees the escalation effect rather than a single flat number.

What moves payback most, in order

  • The tariff slab being offset — a consumer on ₹11/kWh pays back nearly twice as fast as one on ₹6/kWh at the same system size.
  • Self-consumption share under net billing — where exports are credited below retail, daytime consumption is worth far more than export.
  • Cost per kW, which falls roughly 40% from 3 kW to 100 kW purely on scale.
  • Subsidy eligibility, worth up to ₹78,000 but only for residential connections.
  • Shading and soiling losses — a 10% performance ratio gap adds roughly half a year to payback.

Use your own numbers

These are benchmarks, not quotes. The SolvSolar sandbox takes the client's actual monthly bill, tariff, roof type and state irradiance and returns the sized system, year-one saving and payback in about 45 seconds — then turns it into a branded four-page proposal with the same maths on the Financial Plan page.

Frequently asked

What is the payback period for 5 kW solar in India?

About 4.5 years on 2026 assumptions: ₹3.25 lakh turnkey less the ₹78,000 central subsidy, against roughly ₹55,500 of year-one savings at a ₹7.50/kWh tariff.

How much does a 5 kW solar system generate per year in India?

Roughly 7,400 kWh per year at 1,480 kWh per kWp, typical of a 5.2–5.5 kWh/m²/day irradiance band with a 78% performance ratio.

Is commercial solar a better investment than residential?

Usually yes on payback — commercial systems offset a higher tariff at a lower cost per kW, giving roughly 3.2–3.4 year paybacks before accelerated depreciation.

Put these numbers into a client-ready proposal

SolvSolar applies the subsidy slabs, DISCOM ruleset and ROI maths above automatically, and returns a branded four-page PDF in about 45 seconds. $0 per seat.

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