On Grid Solar System in India: Cost, Parts and Payback
An on grid solar system is a rooftop solar setup wired directly to your electricity distribution network, with no battery, so surplus generation is exported to the grid and credited against your bill through net metering. It costs roughly ₹55,000 to ₹85,000 per kW installed, it is the only configuration eligible for the ₹78,000 PM Surya Ghar subsidy, and it produces nothing at all during a power cut. That last point is not a defect and not a rare failure mode. It is how every grid-tied system is required to behave, and it is the thing most buyers discover after installation rather than before.
At a glance
Question | Short answer |
|---|---|
What it is | Rooftop solar wired to the grid, no battery |
Installed cost | ₹55,000 – ₹85,000 per kW |
Typical 3kW system | ₹1.5 – ₹2.4 lakh before subsidy (sources vary widely) |
PM Surya Ghar subsidy | Up to ₹78,000, on-grid and hybrid only |
Output, per kW | 4 – 4.5 units per day, 120 – 135 units per month |
Backup during outage | None. Anti-islanding shuts the inverter down |
Payback | Typically 3 to 5 years after subsidy |
Panel warranty | 25 years performance, 10 to 12 years product |
Roof needed | 80 – 100 sq ft per kW, shade-free |
What is an on grid solar system?
An on grid solar system is a solar power installation that operates in parallel with the utility grid instead of a battery bank. Panels generate DC, a grid-tied inverter converts it to AC synchronised with the grid's voltage and frequency, and that power feeds your home first. Anything left over flows out through a bi-directional meter to the grid, and anything you need beyond what the panels are making at that moment flows in.
There are three configurations sold in India, and the distinction decides everything else:
On grid | Off grid | Hybrid | |
|---|---|---|---|
Battery | None | Required | Optional, usually fitted |
Grid connection | Required | None | Required |
Power during an outage | None | Yes | Yes |
Subsidy eligible | Yes | No | Yes |
Cost per kW | ₹55,000 – ₹85,000 | Substantially higher | Higher |
Best for | Bill reduction with a stable grid | No grid available | Bill reduction plus backup |
If your goal is a lower bill and your grid is reasonably reliable, on grid is the correct choice and the cheapest route to it. If your goal is power during cuts, on grid is the wrong product and no amount of extra panel capacity fixes that. The full comparison is in the on grid vs off grid solar guide.
How does an on grid solar system work?
Five components, and the sequence matters more than the parts list.
- Solar panels on the roof convert sunlight to DC. A 3kW system is typically six 545W modules.
- A grid-tied inverter converts DC to AC and continuously matches the grid's voltage, frequency and phase. This synchronisation is the whole job.
- Your home's distribution board receives that AC. Solar supplies your load first, in real time.
- A bi-directional net meter records units flowing out (export) and in (import) separately.
- The grid absorbs your surplus by day and supplies you at night.
There is no storage anywhere in that chain. The grid is doing the job a battery would do, which is why the system is cheaper and why it stops working when the grid does. If you want to see the current paths and where each protection device sits, the on grid solar system diagram walks through the wiring.
Why does an on grid system stop working during a power cut?
Because it is required to, and understanding why prevents a very common and expensive misunderstanding.
When the grid fails, a lineman may be working on what he believes is a dead conductor. If rooftop systems kept exporting into that line, they would energise it. Grid-tied inverters therefore implement anti-islanding protection under IEC 62116: they detect the loss of grid reference and disconnect within milliseconds.
The consequences in practice:
Situation | What happens |
|---|---|
Bright afternoon, grid healthy | System generates fully, exports surplus |
Bright afternoon, grid fails | System shuts down. Zero output. Panels sit idle in full sun |
Grid restored | Inverter waits a set reconnection delay, then resumes |
You add a battery later to an on-grid inverter | Not possible. The inverter itself must be replaced, at ₹45,000 to ₹70,000 |
Bottom line: if your area sees two or more hours of unscheduled cuts on a typical summer day, a hybrid inverter is the right purchase even if you postpone the battery. The premium for a hybrid inverter with the battery port unused is roughly ₹20,000 to ₹35,000 at the time of purchase, against ₹45,000 to ₹70,000 to replace an on-grid inverter later. That arithmetic is worked through in the on grid solar inverter guide.
What does an on grid solar system cost?
Installed, turnkey, including panels, inverter, mounting structure, wiring, labour and net meter coordination: ₹55,000 to ₹85,000 per kW.
System size | Before subsidy | Subsidy | After subsidy | Monthly output | Roof needed |
|---|---|---|---|---|---|
1 kW | ₹55,000 – ₹85,000 | ₹30,000 | ₹25,000 – ₹55,000 | 120 – 135 units | 80 – 100 sq ft |
2 kW | ₹1.1 – ₹1.7 lakh | ₹60,000 | ₹50,000 – ₹1.1 lakh | 240 – 270 units | 160 – 200 sq ft |
3 kW | ₹1.5 – ₹2.4 lakh | ₹78,000 | ₹72,000 – ₹1.62 lakh | 360 – 450 units | 250 – 300 sq ft |
5 kW | ₹2.75 – ₹4.25 lakh | ₹78,000 | ₹1.97 – ₹3.47 lakh | 600 – 675 units | 400 – 450 sq ft |
10 kW | ₹5.5 – ₹8.5 lakh | ₹78,000 | ₹4.72 – ₹7.72 lakh | 1,200 – 1,350 units | ~800 sq ft |
A caution on those ranges, stated because the industry generally does not state it: published prices for the same system size vary by close to 100% across reputable installers. Reported 3kW on-grid figures in 2026 run from about ₹1.2 lakh to ₹2.4 lakh. Panel technology, inverter brand, mounting height, DISCOM charges and after-sales terms all move the number legitimately, but a spread that wide means you cannot price a system from an article. Use the per-kW band to sanity-check the quote you actually receive. The on grid solar system price breakdown shows what sits inside a quote line by line.
How much subsidy do you get, and what disqualifies you?
PM Surya Ghar Muft Bijli Yojana pays ₹30,000 for the first kW, ₹30,000 for the second and ₹18,000 for the third, capped at ₹78,000. A 3kW system reaches the cap, and a 5kW or 10kW system receives the same ₹78,000.
Four conditions, and applicants fail on the last two far more often than the first two:
Condition | Requirement |
|---|---|
Residential rooftop | Valid domestic electricity connection and rooftop rights |
Grid-connected with net metering | On-grid or hybrid, DISCOM net meter commissioned |
Empanelled vendor | Installer registered on the PM Surya Ghar portal |
Certified components | Panels and grid-tied inverter carrying the required certification, with model numbers matching the approved listing |
The component condition costs people real money. Installers sometimes quote a brand that holds ALMM listing on some models but not the exact unit being fitted, and the application is rejected at DISCOM verification. That is up to ₹78,000 forfeited over a model number. Get the exact panel and inverter model written into the quotation and verify the listing yourself. The PM Surya Ghar eligibility guide covers the rejection reasons in detail.
Subsidy is a reimbursement, not a discount. You pay the installer in full and the amount reaches your bank account roughly 30 to 45 days after DISCOM inspection.
How net metering actually settles
Net metering is what makes an on grid system worth building, and its terms are set by your state regulator rather than nationally, so the details vary.
Mechanism | How exports are treated | Who it suits |
|---|---|---|
Net metering | Solar serves your load first; surplus exported and credited, usually at retail tariff | Almost all residential rooftop |
Net billing | Exports credited at a lower rate than you pay for imports | Where the state has moved away from 1:1 |
Gross metering | All generation exported at a fixed feed-in tariff; you buy everything you use | Larger installations in states that mandate it above a size threshold |
Most states run an April to March settlement cycle. Credits earned in sunny months bank forward against high-consumption months, and any surplus remaining at year end is typically paid out at a rate set by the regulator, often well below retail, in the range of ₹2 to ₹4 per unit.
Three things to confirm with your DISCOM before sizing:
- The system size cap, often 90 to 100% of your sanctioned load
- Whether settlement is monthly or annual, which changes how much banking helps you
- Whether your state credits exports at retail or at a lower rate
Oversizing a system in a state that pays ₹2.50 per exported unit against a ₹8 retail tariff is how a good payback calculation turns into a mediocre one.
What is the real payback?
Take a 3kW system in a household consuming 400 units a month at ₹8 per unit.
Line | Amount |
|---|---|
System cost before subsidy | ₹1,90,000 |
Less PM Surya Ghar subsidy | ₹78,000 |
Net investment | ₹1,12,000 |
Monthly generation | ~400 units |
Monthly bill offset at ₹8 | ~₹3,200 |
Annual saving | ~₹38,400 |
Simple payback | ~35 months |
Remaining useful life after payback | ~22 years |
Three honest adjustments to that figure. Generation drops 15 to 25% if panels are not cleaned during the dry season, which pushes payback out by months. Any exported units settled below retail reduce the offset. And rising grid tariffs, typically 3 to 5% a year, work in your favour and make the real payback slightly better than a static model suggests.
The honest downsides
- Zero output during outages, the point worth repeating because it is the most common regret.
- Net metering approval is often the slowest step, and the timeline is your DISCOM's, not your installer's.
- State rules can change after you have installed. Export credit rates and settlement periods are regulatory decisions.
- Panels need cleaning. Skipping it through a dusty season costs 15 to 25% of generation.
- Shade is disqualifying, not merely reducing. A single obstruction across a string can cut output disproportionately.
- Roof access and structural load matter, and a 25-year asset on an ageing roof means dismantling it when the roof is repaired.
- You are locked to the inverter class you chose. Adding storage later means replacing the inverter.
Who an on grid system suits
Fit | Profile | Reasoning |
|---|---|---|
Strong fit | Own the roof, bill above ₹2,500 a month, grid stable, cuts under an hour a day | Fastest payback, full subsidy, no storage cost |
Strong fit | Consumption 300 to 450 units a month | Matches a 3kW system, which reaches the subsidy cap exactly |
Marginal fit | Bill under ₹1,000 a month | A 1kW system is subsidised but payback stretches past seven years |
Marginal fit | State credits exports well below retail | Still works, but size to self-consumption rather than to roof area |
Not a fit | Two or more hours of daily cuts | You need hybrid. On grid gives you nothing in exactly those hours |
Not a fit | Primary goal is backup | This is a storage requirement, not a generation one |
Not a fit | Shaded, structurally weak or rented roof without consent | Feasibility will fail, correctly |
Frequently asked questions
What is an on grid solar system?
An on grid solar system is a rooftop solar installation connected directly to the utility grid with no battery. Solar power serves your home first, surplus is exported through a bi-directional meter and credited via net metering, and you draw from the grid when panels are not generating. It is the cheapest solar configuration and the only one besides hybrid that qualifies for subsidy.
Does an on grid solar system work during a power cut?
No. Grid-tied inverters carry anti-islanding protection and disconnect within milliseconds of losing the grid, so the system produces nothing during an outage even in full sunlight. This protects utility line workers from a live conductor. Backup during cuts requires a hybrid system with a battery.
How much does an on grid solar system cost in India?
Roughly ₹55,000 to ₹85,000 per kW installed, so a 3kW system runs ₹1.5 to ₹2.4 lakh before subsidy and ₹72,000 to ₹1.62 lakh after the ₹78,000 PM Surya Ghar subsidy. Published figures vary widely between installers, so use the per-kW band to check any quote rather than treating a single published price as the market rate.
How much electricity does an on grid solar system generate?
About 4 to 4.5 units per day per kW in Indian conditions, so roughly 120 to 135 units a month per kW. A 3kW system generates 360 to 450 units monthly, which covers a typical 3 to 4 BHK running fans, lights, a refrigerator and a split AC for part of the day.
Is an on grid solar system eligible for the PM Surya Ghar subsidy?
Yes, and it is one of only two eligible configurations along with hybrid. The subsidy is ₹30,000 per kW for the first two kW and ₹18,000 for the third, capped at ₹78,000. Off-grid battery-based systems are excluded entirely, as is battery storage within a hybrid system.
What is net metering and how does it settle?
Net metering credits the surplus you export to the grid against the units you import, measured by a bi-directional meter. Most states settle annually on an April to March cycle, banking credits from sunny months against heavy-consumption months. Surplus remaining at year end is usually paid out at a regulator-set rate, often ₹2 to ₹4 per unit rather than retail.
How long does an on grid solar system last?
Panels carry 25-year performance warranties and 10 to 12 year product warranties. The inverter is the shorter-lived component, typically warranted 5 to 12 years depending on brand, and is the part you should expect to replace once within the system's life. Budget for that replacement rather than treating the system as maintenance-free.
Can I add a battery to an on grid solar system later?
Not to the existing inverter. An on-grid inverter has no battery management or charging circuit, so adding storage means replacing it with a hybrid unit at ₹45,000 to ₹70,000. If there is any realistic chance you will want backup within five years, buying a hybrid inverter at the outset costs ₹20,000 to ₹35,000 more and avoids the replacement entirely.
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