Updated January 2026
Solar Panel ROI Calculator 2026 – Payback, Savings & MNRE Subsidies for India
Instant, region-aware solar payback calculator with incentives, financing, and year-by-year savings. Works for all India states using 2026 benchmark costs, tariffs, MNRE subsidies, and state programs. No signup.
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📋Calculation Summary
💵Financing Comparison
Cash
MAX ROI- Payback: 3.3 yrs
- Total 25-yr savings: ₹2,517,209.39
Loan
POPULAR- Monthly: ₹3,790.11
- Interest: ₹98,369.29
- Payback: 1.0 yrs
Lease
LOW RISK- Monthly: ₹4,380.00
- Net annual savings: ₹13,140.00
PPA
LOW RISK- Monthly: ₹4,106.25
- Net annual savings: ₹16,425.00
📊Break-Even Analysis
📈Solar ROI vs Stock Market 2026
Is solar a better investment than S&P 500? Compare the internal rate of return (IRR) of residential solar against traditional stock market investments.
Investment in S&P 500
Taxable brokerage account
Investment in Solar
Residential solar with tax advantages
Solar vs S&P 500 (Post-Tax)
PM Surya Ghar Yojana Subsidy Assistant
Your Results Are Ready
Next Steps: Get Competitive Quotes from Installers
Pro tip: Bring this calculation to installer meetings. Most can beat these projections with equipment efficiency upgrades or additional state incentives.
Benchmark Comparison
See how your results compare to regional averages for Punjab, India
Data Source: Benchmarks based on MNRE and Solar Energy Association of India data
Year-by-year projection (first 5 years + milestones)
Visual trend
Green shows how cumulative savings climb; blue shows annual savings taper gently with degradation. Hover over the table to see exact values.
💡 Share these reports with solar installers to compare their quotes against your calculations
💡Key Takeaways: Why Solar ROI Calculations Matter
Understanding your payback period and 25-year savings helps you budget effectively and make informed financing decisions.
Accurate calculations ensure you maximize federal and state incentives, which can reduce system costs by 30-50%.
Solar panels typically generate positive returns for 20-30 years, providing energy security and property value appreciation.
Expert Insights: 2026 Tax Laws and Solar Investment Strategy
The 2026 tax landscape presents significant opportunities for solar investors, with the federal Investment Tax Credit (ITC) remaining at a robust 30% through 2032. This incentive structure, combined with state-level rebates and net metering policies, creates an optimal environment for residential and commercial solar adoption. Understanding these tax implications is crucial for maximizing your return on investment and making informed financial decisions.
The 30% federal ITC applies to the total system cost, including equipment, installation, and certain associated expenses. This credit directly reduces your federal tax liability dollar-for-dollar, meaning a $30,000 solar installation qualifies for a $9,000 tax credit. Importantly, if your credit exceeds your tax liability in the installation year, you can carry forward the unused portion to future tax years. This provision ensures that even if you're in a lower tax bracket initially, you can still fully benefit from the incentive over time.
Beyond federal incentives, many states offer additional rebates, tax credits, or performance-based incentives that can further reduce your net system cost. Some states provide upfront rebates that lower your initial investment, while others offer production-based incentives that reward you for the electricity your system generates. Additionally, net metering policies allow you to sell excess solar generation back to the utility at retail rates, effectively using the grid as a battery and maximizing the value of every kilowatt-hour your panels produce.
The 2026 tax code also includes provisions that benefit solar investors through depreciation benefits for commercial installations and potential property tax exemptions in certain jurisdictions. Furthermore, as electricity rates continue to rise—typically increasing 3-5% annually—your solar investment becomes more valuable over time. This rate escalation, combined with the long-term nature of solar panels (which typically maintain 80% efficiency after 25 years), means your ROI improves year-over-year even as your panels gradually degrade.
Strategically timing your solar installation to align with tax planning can optimize your overall financial benefit. For example, if you anticipate higher income in future years, you might accelerate your installation to claim the credit in a higher tax bracket year. Alternatively, if you're planning major renovations, bundling solar with other home improvements can create synergies in both financing and installation costs. Ultimately, the combination of federal incentives, state programs, rising utility rates, and long-term energy production makes solar a compelling investment in 2026, with typical payback periods of 5-8 years and 25-year returns often exceeding 200% of the initial investment.
Why Solar ROI Calculation Is Critical (Beyond Simple Payback)
Simple payback only tells you when cumulative savings equal upfront cost. True ROI accounts for incentives, financing, degradation, export credit, and maintenance. A 5-year payback cash system can outperform a 3-year payback financed system once interest costs are included. This calculator shows both payback and ROI so you understand the full picture.
Incentives Transform ROI
40% MNRE subsidy can cut payback by 2-3 years. Example: ₹2.5L system → ₹1.5L after subsidy → payback improves from 3.7 to 2.6 years.
Net Metering Matters
With 1:1 export credits, savings may be ₹68k/year; without, only ~₹45k/year. That's a 30-40% swing in ROI.
Degradation is Real
Panels lose ~0.5-0.8% per year. Year 25 output is ~80-88% of year 1. This calculator applies degradation to long-horizon savings.
Financing Impact
Cash ROI can be 25-35% annually; a 10% loan may extend payback to 3-4 years but enables ₹0-down adoption.
Regional Variation
Sunny, high-tariff regions (CA, HI, AZ, NJ) see 3-6 year paybacks; low-tariff regions (FL, WA) trend 8-10 years but still strong over 25 years.
Hidden Costs
Roof work, permitting, and maintenance affect true cost. Budget ₹8k-15k/year O&M and ₹1.5L-3L inverter replacement around year 15-20.
How Solar ROI Is Calculated — Complete Breakdown
kW × peak sun hours × 365 × system efficiency × orientation/shade factors.
Example: 8 kW × 5.5 × 365 × 0.9 = 14,472 kWh/year
generation × tariff. With net metering: retail rate. Without: discounted export value (assumed 65%).
each year savings = prior year × (1 - degradation rate). The tool uses your input (0.5-0.8% default).
subtract ITC/subsidy from cost. US: 30% ITC + state rebates. India: 40-50% residential subsidies plus GST considerations.
effective cost ÷ first-year savings. Break-even occurs when cumulative savings ≥ effective cost.
annual savings ÷ effective cost. 14-18% is typical in high-rate regions.
loans subtract annual payments; leases/PPA compare discounted $/kWh vs tariff.
sums degraded savings for full life, showing total savings and environmental offsets.
Solar Technology Types & ROI Impact
Monocrystalline (18-22% efficiency) offers highest output per sq. ft. Polycrystalline (15-17%) reduces cost with similar payback in moderate climates. Thin-film excels in heat with lowest $/W but needs more roof area. Bifacial yields 10-30% bonus when ground-mounted with albedo. BIPV prioritizes aesthetics with longer payback.
| Technology | Efficiency | Cost/W | Annual Savings (5 kW) | Payback | Best Use |
|---|---|---|---|---|---|
| Monocrystalline | 18-22% | ₹38-45 | ₹68k | ~2.8 yrs (after subsidy) | Limited roof, hot climates |
| Polycrystalline | 15-17% | ₹32-38 | ₹65k | ~2.6 yrs | Budget, moderate climates |
| Thin-film | 10-14% | ₹25-32 | ₹58k | ~3.2 yrs (8 kW) | Hot climates, large roofs |
| Bifacial | 18-23% + bonus | ₹45-62 | ₹82k | ~2.6 yrs | Ground/commercial |
| BIPV | 12-18% | ₹50-75 | ₹61k | ~8.8 yrs | Aesthetic priority |
💡 Scroll horizontally to see all columns on mobile devices. Green = fast payback, Orange = longer payback
Central, State, and Local Incentives (India)
US homeowners get 30% ITC through 2032. States like NJ (SRECs), NY (NY-Sun), MA (performance-based), and MD rebates further cut cost. Property and sales tax exemptions apply in many states. India offers 40-50% rooftop subsidies (state-dependent) plus net metering; commercial systems benefit from accelerated depreciation.
India Subsidies
Central subsidy 20-40% plus state top-ups; GST ~13.8% considered in EPC quotes.
Net Metering Rules
Retail in many states; NEM 3.0 export credit in CA; DISCOM caps in India.
Six Complete Solar ROI Scenarios
Mumbai, Maharashtra
Type: Cash, 6 kW
Cost: ₹3L → ₹1.92L after subsidy
Generation: ~9,000 kWh/yr
Annual Savings: ₹81k/yr
Delhi NCR
Type: Loan, 5 kW
Cost: ₹2.5L → ₹1.78L after subsidy
Loan: 5 yrs @10.5%
Annual Savings: ~₹54k/yr
Chennai, Tamil Nadu
Type: Subsidy, 4 kW
Cost: ₹2L → ₹1.32L after subsidy
Annual Savings: ~₹41k/yr
Jaipur, Rajasthan
Type: Cash, 3 kW
Cost: ₹1.5L → ₹96k after subsidy
Annual Savings: ~₹32k/yr
Bangalore, India
Type: Subsidy, 5 kW
Cost: ₹18.5L → ₹11.1L (40% subsidy)
Annual Savings: ₹43k/yr
Regional Solar ROI Benchmarks (Based on Provided Data)
Benchmarks below use 2025 costs, tariffs, sun hours, and incentives from solar-data.json. Values are illustrative; utility programs may vary.
India States (sample)
| State | Cost/W (₹) | Tariff (₹/kWh) | Sun hours | Subsidy | Typical Payback |
|---|---|---|---|---|---|
| Andhra Pradesh | ₹55 | ₹6.5 | 5.4 | 20.0% | 19.1 yrs |
| Arunachal Pradesh | ₹62 | ₹6.0 | 4.2 | 20.0% | 38.5 yrs |
| Assam | ₹60 | ₹6.3 | 4.5 | 20.0% | 30.9 yrs |
| Bihar | ₹58 | ₹7.0 | 4.9 | 20.0% | 23.2 yrs |
| Chhattisgarh | ₹57 | ₹6.6 | 5.1 | 20.0% | 21.8 yrs |
| Goa | ₹60 | ₹8.0 | 5.2 | 20.0% | 18.6 yrs |
| Gujarat | ₹52 | ₹6.5 | 5.5 | 20.0% | 17.7 yrs |
| Haryana | ₹56 | ₹7.2 | 5.0 | 20.0% | 21.3 yrs |
| Himachal Pradesh | ₹60 | ₹6.8 | 4.6 | 20.0% | 28.0 yrs |
| Jharkhand | ₹59 | ₹7.0 | 5.0 | 20.0% | 21.7 yrs |
| Karnataka | ₹54 | ₹6.8 | 5.6 | 20.0% | 16.4 yrs |
| Kerala | ₹60 | ₹7.8 | 5.1 | 20.0% | 19.4 yrs |
| Madhya Pradesh | ₹56 | ₹6.8 | 5.3 | 20.0% | 18.9 yrs |
| Maharashtra | ₹58 | ₹8.0 | 5.0 | 20.0% | 18.7 yrs |
| Manipur | ₹62 | ₹6.3 | 4.5 | 20.0% | 32.0 yrs |
| Meghalaya | ₹62 | ₹6.5 | 4.3 | 20.0% | 34.7 yrs |
| Mizoram | ₹62 | ₹6.4 | 4.4 | 20.0% | 34.5 yrs |
| Nagaland | ₹62 | ₹6.4 | 4.4 | 20.0% | 34.5 yrs |
| Odisha | ₹58 | ₹7.0 | 5.0 | 20.0% | 21.4 yrs |
| Punjab | ₹56 | ₹7.5 | 5.0 | 20.0% | 19.3 yrs |
| Rajasthan | ₹55 | ₹7.0 | 5.7 | 20.0% | 15.9 yrs |
| Sikkim | ₹62 | ₹6.3 | 4.3 | 20.0% | 35.8 yrs |
| Tamil Nadu | ₹54 | ₹7.2 | 5.6 | 20.0% | 15.4 yrs |
| Telangana | ₹55 | ₹7.0 | 5.4 | 20.0% | 17.7 yrs |
| Tripura | ₹62 | ₹6.3 | 4.4 | 20.0% | 35.0 yrs |
| Uttar Pradesh | ₹57 | ₹7.2 | 5.1 | 20.0% | 20.0 yrs |
| Uttarakhand | ₹60 | ₹6.8 | 4.8 | 20.0% | 26.9 yrs |
| West Bengal | ₹58 | ₹7.0 | 4.9 | 20.0% | 23.2 yrs |
💡 Scroll horizontally to see all columns on mobile devices
20+ Solar ROI FAQs (Quick Answers)
Frequently Asked Questions
Solar Payback Period by State: Which Indian State Offers Best ROI?
Payback period in India varies by state depending on electricity tariffs, sun hours, and state subsidies. Southern states like Karnataka and Tamil Nadu offer the fastest payback (2-4 years) due to high tariffs and excellent sun hours. Use the calculator above with your state to see your exact payback timeline.
Fast Payback States (2-4 years): Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra (high tariffs ₹7-9/kWh + good sun hours)
Moderate Payback (3-5 years): Gujarat, Rajasthan, Madhya Pradesh, Punjab, Haryana (strong sun hours compensate for moderate tariffs)
Longer Payback (4-6 years): Kerala, West Bengal, Uttar Pradesh, Bihar (lower tariffs ₹5-6/kWh = longer timeline)
The good news: Even in longer payback states, solar still delivers ₹10L+ in lifetime savings over 25 years, plus MNRE subsidy reduces upfront cost by ₹50K-₹72K. The calculator automatically detects your state and applies accurate payback estimates.
Solar Loan vs Cash vs Lease vs PPA: Which Financing Path Saves the Most?
Your financing choice determines your total savings as much as your region does. A ₹2.5L system can result in ₹12L in 25-year savings (cash), ₹10L (loan with interest), or ₹3L (lease). Each option serves different goals. Cash buyers maximize ROI but require upfront capital. Loan buyers spread costs over time but pay interest. Lease and PPA buyers avoid upfront costs but sacrifice long-term savings.
💰 Cash Purchase
Best for: Homeowners with capital + planning to stay 10+ years
25-yr savings: ₹12L+ (highest ROI)
Incentive: 40% MNRE reduces cost by ₹72k
Trade-off: Requires ₹1.5L-2.5L upfront
📊 Loan (5-7 year term)
Best for: Homeowners wanting to spread cost + keep subsidy
Monthly payment: ~₹15k-28k (depends on rate/term)
25-yr savings: ₹9L-₹11L
Trade-off: Interest reduces ROI vs cash, but enables ₹0 down
🏠 Lease (₹6k-12k/month)
Best for: Renters or those wanting zero responsibility
Monthly payment: Fixed ₹6k-12k (locked in)
25-yr savings: ₹2L-₹4L
Trade-off: Installer keeps subsidy + production incentives
⚡ PPA (Power Purchase Agreement)
Best for: Those wanting lowest rates + zero capex
Your cost: Fixed ₹/kWh (usually 5-15% below grid rate)
25-yr savings: ₹3L-₹5L
Trade-off: No subsidy, no ownership, limited upgrade options
Bottom line: The calculator above shows exact monthly payments and 25-year totals for all four options. Use it to compare cash vs loan vs lease vs PPA for your exact situation, then request quotes from 2-3 installers.
🇮🇳 India MNRE Rooftop Solar Subsidy 2025: Get Up to 40% Off
The Ministry of New and Renewable Energy (MNRE) offers Central Financial Assistance (CFA) for residential rooftop solar installations. If your system costs ₹2.5 lakhs, you can receive up to ₹1 lakh in direct subsidy. This scheme is available across all Indian states and dramatically improves ROI.
MNRE CFA Subsidy Structure
- 1-3 kW systems: ₹18,000/kW (max ₹54,000 for 3 kW)
- Above 3 kW (up to 10 kW): ₹9,000/kW for additional capacity
- Example 5 kW: (3 × ₹18,000) + (2 × ₹9,000) = ₹72,000 subsidy
- Processing time: 30-90 days after installation & inspection
Karnataka 5 kW Example with Subsidy
| Metric | With MNRE Subsidy | Without Subsidy |
|---|---|---|
| System cost (5 kW) | ₹1.78L (after ₹72K subsidy) | ₹2.5L |
| Annual savings Year 1 | ₹68,000 | ₹68,000 |
| Payback period | 2.6 years | 3.7 years |
| 25-year savings | ₹14.2L | ₹13.5L |
State-Level Top-ups
Several states offer additional incentives on top of MNRE CFA:
• Gujarat: Additional 40% state subsidy (total 80% off!)
• Karnataka: 30% extra for solar + battery systems
• Rajasthan: Fast-track approvals + net metering within 30 days
• Tamil Nadu: Free grid connection + generation-based incentive
How to apply: Register on the National Portal for Rooftop Solar (solarrooftop.gov.in), select your DISCOM, and follow the online application process. The calculator above automatically includes MNRE subsidy in your results when you select an Indian state.
Best States for Solar ROI in India: Karnataka, Tamil Nadu, Rajasthan Comparison
Solar ROI in India varies significantly by state due to differences in sun hours, electricity tariffs, state subsidies, and net metering policies. Southern states like Karnataka and Tamil Nadu offer the fastest payback (2-4 years), while northern states like Punjab and Haryana range from 3-5 years despite lower sun hours due to higher tariffs.
Regional Comparison: 5 kW System
| State | Avg Tariff | Sun Hours/Day | Payback Period | 25-Yr Savings |
|---|---|---|---|---|
| Karnataka | ₹7.5/kWh | 5.8 hrs | 2.6 years | ₹14.2L |
| Tamil Nadu | ₹6.8/kWh | 5.5 hrs | 3.1 years | ₹12.8L |
| Rajasthan | ₹6.2/kWh | 6.2 hrs | 2.8 years | ₹13.5L |
| Maharashtra | ₹9.0/kWh | 5.3 hrs | 2.2 years | ₹16.5L |
| West Bengal | ₹5.5/kWh | 4.8 hrs | 4.2 years | ₹9.8L |
Why Karnataka & Maharashtra Lead
- High tariffs: ₹7-9/kWh means every kWh generated saves more money
- Good sun hours: 5-6 hours/day = consistent generation year-round
- Strong net metering: 1:1 export credit (no restrictions)
- Fast approvals: Installation to grid connection in 30-60 days
- MNRE subsidy: ₹72,000 for 5 kW system (applied automatically)
Bottom line: Even in lower-tariff states like West Bengal (₹5.5/kWh), solar still pays back in under 5 years and delivers ₹10L+ in lifetime savings. Use the calculator above to see YOUR exact ROI based on your state and monthly electricity bill.
How to Use This Solar ROI Calculator (5-Minute Guide)
Step 1: Select Your State
Choose your US state or India state. The calculator auto-fills your region's electricity rate, sun hours, and available incentives (30% ITC for US, state subsidies for India).
Step 2: Enter Your Monthly Bill
Find your electricity bill and enter your monthly average. This tells the calculator how much you currently spend, so it can estimate how much you'll save with solar.
Step 3: Adjust System Size & Cost
If you have quotes, enter your system size (kW) and total cost. Otherwise, the calculator suggests an optimal size to cover ~90% of your bill based on your region's sun hours.
Step 4: Choose Financing
Select Cash, Loan, Lease, or PPA. For loans, enter your interest rate (typical: 4-7%) and term (typical: 5-7 years). See which option maximizes YOUR savings.
Step 5: Review Results
See your payback period, annual savings, ROI%, and 25-year total. The year-by-year table shows exactly how much you'll save each year, accounting for panel degradation.
Step 6: Request Quotes
Take a screenshot of your results and share with solar installers. Get 2-3 quotes to lock in 2025 pricing. Compare their offers against your calculator results.
How to Use This Calculator (Step-by-Step)
- Pick your region (US or India state) to auto-fill tariffs, sun hours, and incentives.
- Enter monthly bill, system size, and cost if you have quotes. Adjust tariff or incentives if custom.
- Toggle net metering to see impact of export credit policies.
- Select financing: cash, loan (add rate/term), lease, or PPA to compare monthly impact.
- Review results: payback, ROI, break-even, 25-year savings, and environmental offsets.
- Use year-by-year table and comparison cards to decide the best path (cash vs loan vs lease vs PPA).
- Export or screenshot results for installer conversations; request quotes to validate assumptions.