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Solar Investment Analysis

DescriptionValueCalculation
Average Cost of 1 kW of grid connected solar rooftop₹ 70,000
Considering government subsidy of 30%, installation cost of 1 kW₹ 40000₹ (70000-30000)
Average Down payment required for taking loan₹ 800020% of ₹ 40000
Loan to be taken for 1 kW₹ 32000₹ 40000 -  ₹ 8000
Monthly EMI payable (considering payback period of 4 years and interest rate of 10% )₹ 811
Avg cost of electricity per kWh₹ 6.29
For 150 units of monthly electricity consumption, total monthly electricity bill₹ 943.5150 * ₹ 6.29
Solar panel of 1kW provides 4.5kWh approx electricity per day. Monthly electricity produced135 kWh4.5*30

Insights

Electricity bill reduction:

  • Electricity bill reduces from ₹ 943.5 to ₹ 94.35 monthly.
  • Breakeven received within 5 years.

Yearly savings after breakeven:

  • After breakeven, yearly savings of roughly ₹ 10,000 for the remaining 20 years.
  • Considering the lifespan of solar panels to be 25 years.

If you have cash and invest the amount in any mutual fund,

  • Average interest per year in mutual fund: 14%.
  • Interest you pay as solar loan: 10%.

"Choose solar: because the Sun never sends a bill.”