Investing in solar energy is not just about reducing your carbon footprint; it’s also a smart financial decision. Understanding the cost and return on investment (ROI) of different solar system sizes can help you make an informed choice. In this blog post, we’ll delve into the average cost and ROI of 1KW to 10KW solar systems in India, providing valuable insights to aid your decision-making process.
Calculating the Return on Investment (ROI) for a solar system involves comparing the upfront cost of installing the system with the savings generated over its lifetime. Here’s a format to calculate the solar ROI:
- Upfront Cost: The initial investment required to purchase and install the solar system. This includes the cost of solar panels, inverters, mounting equipment, installation labor, permits, and any additional components.
- Yearly Savings: The amount of money saved on electricity bills each year due to using solar power instead of purchasing electricity from the grid. This can be calculated by multiplying the system’s annual energy generation (in kWh) by the cost per kWh of electricity from the grid.
- Lifetime Savings: Multiply the yearly savings by the number of years the solar system is expected to operate effectively. This is typically around 25 years, but it can vary depending on the system’s warranty and maintenance.
- ROI Calculation:
- ROI = (Lifetime Savings – Upfront Cost) / Upfront Cost
- Express ROI as a percentage.
Here’s an example format for calculating solar ROI:
- Upfront Cost: ₹5,00,000
- Yearly Savings: ₹30,000 (based on energy savings of 20,000 kWh per year and a cost of ₹1.50 per kWh from the grid)
- Lifetime Savings: ₹7,50,000 (₹30,000 yearly savings x 25 years)
- ROI Calculation:
- ROI = (₹7,50,000 – ₹5,00,000) / ₹5,00,000
- ROI = ₹2,50,000 / ₹5,00,000
- ROI = 0.5 or 50%
In this example, the solar system has a ROI of 50%, meaning that the savings generated over its lifetime are 50% greater than the upfront cost of installation.
| Solar System Size (KW) | Average Cost (₹) (10% reduction) | Yearly Savings (₹) | Lifetime Savings (₹) | ROI (%) | Years for 100% ROI |
|---|---|---|---|---|---|
| 1 | ₹63,000 – ₹90,000 | ₹4,500 – ₹6,000 | ₹1,12,500 – ₹1,50,000 | 125% – 150% | 7 – 10 |
| 2 | ₹1,26,000 – ₹1,80,000 | ₹9,000 – ₹12,000 | ₹2,25,000 – ₹3,00,000 | 160% – 200% | 6 – 9 |
| 3 | ₹1,89,000 – ₹2,70,000 | ₹13,500 – ₹18,000 | ₹3,37,500 – ₹4,50,000 | 170% – 200% | 5 – 8 |
| 4 | ₹2,52,000 – ₹3,60,000 | ₹18,000 – ₹24,000 | ₹4,50,000 – ₹6,00,000 | 160% – 200% | 5 – 8 |
| 5 | ₹3,15,000 – ₹4,50,000 | ₹22,500 – ₹30,000 | ₹5,62,500 – ₹7,50,000 | 160% – 200% | 5 – 8 |
| 6 | ₹3,78,000 – ₹5,40,000 | ₹27,000 – ₹36,000 | ₹6,75,000 – ₹9,00,000 | 160% – 200% | 5 – 8 |
| 7 | ₹4,41,000 – ₹6,30,000 | ₹31,500 – ₹42,000 | ₹7,87,500 – ₹10,50,000 | 160% – 200% | 5 – 8 |
| 8 | ₹5,04,000 – ₹7,20,000 | ₹36,000 – ₹48,000 | ₹9,00,000 – ₹12,00,000 | 160% – 200% | 5 – 8 |
| 9 | ₹5,67,000 – ₹8,10,000 | ₹40,500 – ₹54,000 | ₹10,12,500 – ₹13,50,000 | 160% – 200% | 5 – 8 |
| 10 | ₹6,30,000 – ₹9,00,000 | ₹45,000 – ₹60,000 | ₹11,25,000 – ₹15,00,000 | 160% – 200% | 5 – 8 |
Conclusion: Make Your Investment Renewable with Immortals Solar
By understanding the cost and ROI of solar systems, you can confidently make the switch to renewable energy. Immortals Solar is here to guide you every step of the way, ensuring a seamless transition to a greener future.
Ready to reap the benefits of solar energy? Contact Immortals Solar today and start saving while making a positive impact on the environment!
