When homeowners and businesses think about installing a solar power system, the most important question they ask is:
“How much will I save, and how soon will I get my money back?”
That’s where ROI (Return on Investment) comes in. At VMJ Solar, we believe in giving 100% clarity with real calculations, so customers know exactly what to expect before they go solar.
Let’s break down the ROI of a 5 kW on-grid solar system with accurate numbers.
Investment & Subsidy
System Cost (before subsidy): Rs3,40,000
Government Subsidy: Rs78,000
Net Customer Cost: Rs2,62,000
Power Generation & Savings
We use a conservative but realistic assumption of 4 units/day per kW.
- System Size: 5 kW
- Daily Generation: 20 units/day
- Annual Generation (Year 1): ≈ 7,300 units (kWh)
- Average Electricity Tariff: ₹8 per unit
Annual Savings (Year 1): 7,300 × 8 = Rs58,400
Monthly Savings: ≈ Rs4,867
Payback Period (ROI)
- Net Investment = Rs2,62,000
- Annual Savings = Rs58,400
- Simple Payback = 2,62,000 ÷ 58,400 ≈ 4.5 years
This means your solar system pays for itself in less than 5 years.
Annual ROI
- (Annual Savings ÷ Net Cost) × 100
- (58,400 ÷ 2,62,000) × 100 ≈ 22.3% ROI
That’s far higher than what most banks, FDs, or even mutual funds deliver — with much lower risk.
Long-Term Savings (25 Years)
Solar panels are designed to last 25 years. With an average 0.5% degradation per year, here’s what you can expect:
- Total Energy in 25 Years: ≈ 1,71,958 units (kWh)
- Lifetime Bill Savings @ Rs8/unit: ≈ Rs13,75,668
- Net Lifetime Gain (after deducting Rs2.62 lakh cost): ≈ Rs11,13,668
That’s 4X return on your investment over the system’s life.
Why Solar ROI is So Attractive
- Electricity tariffs keep rising — your savings grow every year.
- Government subsidy lowers your upfront cost.
- Net metering ensures you earn credits for extra power.
- No risk of market fluctuations like in stocks or mutual funds.
Solar is not just an eco-friendly decision — it’s a smart financial investment.
Solar ROI Snapshot – As of Today (5 kW On-Grid System)
Thinking about going solar? Here’s the quick summary of numbers you need to know today before diving into the detailed ROI analysis.
| Parameter | Value (5 kW On-Grid Solar System) |
| System Cost (Before Subsidy) | Rs3,40,000 |
| Government Subsidy | Rs78,000 |
| Net Customer Cost | Rs2,62,000 |
| Annual Power Generation | ~7,300 kWh |
| Average Tariff (Per Unit) | Rs8 |
| Annual Savings (Year 1) | ~Rs58,400 |
| Monthly Savings | ~Rs4,867 |
| Payback Period | ~4.5 years |
| Annual ROI | ~22.3% |
| Lifetime Savings (25 Years) | ~Rs13.75 lakh |
| Net Lifetime Gain | ~Rs11.14 lakh |
| if we invest same 5k / month for 25 years (Post Payback) | ~Rs96 lakh @12% return, ~Rs1.7 crore @15% return |
VMJ Solar Advantage
When you choose VMJ Solar, you get:
- Accurate ROI projections before installation
- End-to-end service (survey, subsidy, installation, net metering)
- Tier-1 panels & premium inverters for consistent generation
- Lifetime support and monitoring
FAQs
1: What is the payback period for a 5 kW on-grid solar system?
Around 4.5 years at Rs8/unit tariff, after subsidy.
2: How long will the system generate electricity?
Solar panels last 25 years or more, with gradual output reduction.
3: What happens after ROI is achieved?
For the remaining 25+ years, you enjoy free electricity and net savings of over Rs11 lakh.
4: Do businesses get better ROI than homes?
Yes, because commercial tariffs are higher (Rs9–12/unit), payback is faster — often in 3–4 years.
Conclusion
A 5 kW on-grid solar system is not just about reducing power bills — it’s about transforming your financial future.
- In just 4.5 years, the system pays for itself.
- Over 25 years, it saves you more than Rs11 lakh net.
- If you reinvest these savings smartly, your solar decision can turn into a Rs1 crore+ wealth-building opportunity.
With VMJ Solar, you’re not only choosing green energy — you’re choosing financial freedom, family security, and a smarter lifestyle.