On-Grid Solar System in India: Price, Benefits, Subsidy, and Installation Costs

As India continues to embrace sustainable energy solutions, on-grid solar systems have become increasingly popular. These systems, connected to the electricity grid, offer a practical and efficient way for residential and commercial users to harness solar energy. Here we will provide all useful information about on-grid solar system prices, benefits, subsidies, and installation costs in India.

What is a Grid-tied Solar Power System?

An on-grid solar system that generates electricity and is directly connected to the Government’s electricity. It allows users to consume the generated solar power and export the excess to the grid, which can be credited or compensated in the electricity bill.

Price of Grid-tied Solar Power System in India

The price of an on-grid solar system in India varies based on several factors, including the system size, quality of components, and installation location. The Prices for Grid Solar Power System typically ranges between INR 50,000 to INR 60,000. This price includes solar panels, inverters, mounting structures, wiring, and installation charges.

For a typical household installation of a 3 kW Solar system, the total cost would be around INR 1.4 lakh to INR 1.8 lakh. Larger systems, such as those for commercial or industrial purposes, will have a higher upfront cost but can benefit from economies of scale, potentially reducing the per-kW price.

Benefits of Grid-Connected Solar Systems


  1. Cost Savings: One of the most significant advantages is the reduction in electricity bills. By generating their electricity, users can significantly cut down on their monthly energy expenses.
  2. Net Metering: With net metering, excess electricity generated is fed back into the grid, and users receive credits or payments, further reducing costs.
  3. Environmental Impact: Solar power is a clean and renewable source of energy. Using on-grid systems helps reduce carbon footprint and dependence on fossil fuels.
  4. Low Maintenance: On-grid systems require minimal maintenance compared to other renewable energy solutions. Routine cleaning of panels and periodic inspections are usually sufficient.
  5. Increased Property Value: Installing a solar system can increase property values due to the long-term energy savings it provides.

Subsidies and Government Support

The Indian government offers various incentives to promote the adoption of solar energy:


  1. Subsidies: The Ministry of New and Renewable Energy (MNRE) provides capital subsidies for residential solar installations. These subsidies can cover up to 40% of the cost for systems up to 3 kW and 20% for systems above 3 kW and up to 10 kW.
  2. Net Metering Policies: State governments have implemented net metering policies to facilitate the sale of excess solar power back to the grid.
  3. Tax Benefits: Businesses can benefit from accelerated depreciation, which allows them to depreciate solar assets at a higher rate, providing significant tax savings.
  4. Soft Loans: Various financial institutions offer loans at reduced interest rates for solar installations, making it easier for consumers to invest in solar power.

Which Component used to install on the grid solar system

Installing a solar system involves several key components that work together to convert sunlight into usable electricity. Here’s a detailed breakdown of the components used in an on-grid solar system:

Solar Panels – Solar panels are the most critical component of a solar power system. They capture sunlight and convert it into direct current (DC) electricity.

Inverter — The inverter converts the DC electricity generated by the solar panels into alternating current (AC) electricity, which is used by household appliances and fed into the grid. Modern Home Solar inverters come with advanced features such as maximum power point tracking (MPPT) to optimize the energy harvest from the solar panels.

Mounting Structures — These structures support and secure the solar panels in place. They ensure the panels are positioned at the optimal angle for maximum sunlight exposure.

Net Meter: The net meter measures the electricity generated by the solar system and the electricity consumed by the grid. It facilitates net metering, where excess power sent to the grid is credited back to the user.


On-grid solar systems are a financially and environmentally beneficial investment for both residential and commercial users in India. With government subsidies, net metering policies, and decreasing costs, the adoption of solar power is becoming more accessible and attractive. By understanding the prices, benefits, subsidies, and installation costs, consumers can make informed decisions to harness the power of the sun, contributing to a greener and more sustainable future.

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