What is a Hybrid Solar System? Explore Benefits, Disadvantages, Cost, and Subsidy Details

A hybrid solar system, also known as a hybrid PV system, is a photovoltaic solar energy system that is connected to the utility grid and batteries, and uses the photovoltaic effect to convert sunlight into electricity using solar panels. The solar electricity generated during the day is used to power loads and charge the batteries. If any excess power remains and the discom allows it, the net meter sends it to the electricity grid.

Unlike on-grid solar systems that are connected just to the grid and off-grid solar systems that are connected to just a lithium battery bank, a hybrid solar power system is connected to both. This not only makes a hybrid solar panel system the most expensive of the three types of solar systems, but also increases the payback period. 

The hybrid solar system price in India starts from ~Rs. 3 lakh* for a 2 kW hybrid solar system to ~Rs. 15 lakh* for a 10 kW hybrid solar panel system. The cost isn’t only higher upfront, but the maintenance cost of a hybrid solar system and the replacement cost of lithium batteries make the system overall expensive throughout its life. 

*Please note: The hybrid solar system price range mentioned above is based on standard market research. The actual final cost of a hybrid solar power system can significantly vary from the given range based on the panel type, inverter type, panel brand, inverter brand, etc. SolarSquare does not install hybrid solar systems. We only install on-grid rooftop solar panel systems at homes, housing societies, commercial buildings, and industries.

Due to its significant cost, most Indian homes with a reliable grid do not prefer a hybrid solar system for home. Instead, on-grid rooftop solar panel systems for homes, housing societies, and commercial complexes are most popular because they’re the least expensive, have the best ROI, and are simpler to install and maintain. 

In this blog, we will explain what a hybrid solar power plant is and how it exactly works, its benefits, disadvantages, and cost. We will also give a detailed comparison between the installation cost of hybrid and on-grid solar systems, and explain which of these is better as rooftop solar for housing societies and homes, and why.

TL;DR Summary Box: How Long Do Hybrid Solar Systems Last?

A well-maintained hybrid solar system can last for 25+ years. However, it’s important to understand that different components have different lifespans. For instance, solar panels can last for 20-25 years, while batteries require replacement every 5-10 years, depending on the type of battery.

Here are the main topics covered in this blog in detail:

*Please note: The hybrid solar system price range mentioned above is based on standard market research. The actual final cost of a hybrid solar power system can significantly vary from the given range based on the panel type, inverter type, panel brand, inverter brand, etc. SolarSquare does not install hybrid solar systems. We only install on-grid rooftop solar panel systems at homes, housing societies, commercial buildings, and industries.

What is a Hybrid Solar System?

A hybrid solar system is a photovoltaic system that connects solar panels to both a lithium battery bank and the utility grid. During the daytime, the solar electricity generated by the panels is used to keep the loads running. Excess energy is used to charge the lithium batteries through a built-in MPPT solar panel charge controller within the hybrid solar inverter. 

If any extra energy remains after the batteries are charged and the utility company allows it, it’s sent to the grid through the net meter.

The energy stored in the batteries is used to keep the load running at night or during a power outage.

What Are the Main Components of a Hybrid PV System?

A hybrid grid solar system comprises multiple components, including solar panels and mounting structures, that work in tandem to produce and supply electricity. Let’s check out all the major components that make a hybrid solar system functional, and their specific roles:

• Solar panels: These modules are responsible for capturing photons present in the sunlight and converting them into direct current (DC).
• Solar mounting structures: These are the mounts/stands on top of which the solar panels are placed. 
• Hybrid solar inverter: It converts DC to alternating current (AC), charges the batteries safely through built-in charge controllers, and if needed, converts AC from the grid to DC to charge batteries. However, in AC-coupled designs, a separate battery inverter/charger is used. 
• Battery bank: Batteries are used to store solar energy for later use at night or during power outages.
• Grid and net meter: Many hybrid solar systems are grid-connected. If the state DISCOM allows export, a bidirectional net meter records what’s taken from the grid and what’s sent back. If export is not allowed, the system can be set to zero export.
• Solar accessories: These include AC and DC combiner boxes, AC and DC cables, MC4 solar connectors, conduit trays and pipes, earthing wires, and a lightning arrestor. They’re all critical to ensure safety. 

How Does a Hybrid Solar Power System Work?

Hybrid solar panel systems work by utilizing the photovoltaic effect, which harnesses sunlight to generate electricity. 

Let’s understand step-by-step how a hybrid solar power system transforms sunlight into electricity: 

• Step 1 – Solar panels absorb photons: Solar panels are composed of PV cells, mostly made of silicon. These silicon cells absorb photons present in the sunlight. Once absorbed, photons transfer their energy to electrons present in the solar cells.
• Step 2 – Electrons in the solar cells get excited: Once they get the energy of photons, electrons leave their place. The empty place they leave behind is called a hole, and holes are positively charged. Every photon that manages to knock an electron loose creates an electron-hole pair.
• Step 3 – The built-in electric field at the p-n junction keeps electrons from merging with holes: The built-in electric field pushes holes and electrons in opposite directions.
• Step 4 – Electrons flow in one direction: The unidirectional flow of electrons is known as direct current (DC). 
• Step 5 – Direct current flows into the hybrid solar inverter: The inverter converts DC to AC power to keep the loads running. If the batteries are discharged, the inverter uses a portion of DC to charge the batteries through a built-in solar panel charge controller. If it’s an AC-coupled design, the inverter doesn’t have a built-in charge controller. Instead, a separate charge controller is used to regulate the flow of DC to charge the batteries safely.
• Step 6 – Excess energy is sent to the grid: If the discom allows it, any excess energy that remains after the batteries are charged can be sent to the grid through the net meter. However, if the discom doesn’t allow unit export, the system can be set to zero export, ensuring no electricity from the system flows out to the grid.

What is the Cost of a Hybrid Solar System?

The hybrid solar system price in India starts from ~Rs. 3 lakh* for a 2 kW hybrid PV system to ~Rs. 15 lakh* for a 10 kW hybrid solar panel system. The cost of installing a hybrid solar system isn’t the only expense incurred. Hybrid solar systems are also expensive in the long run, as the batteries must be replaced every 5-10 years, depending on the battery chemistry.  

Let’s check out the estimated cost of a hybrid solar system in India in 2025:

*Please note: The hybrid solar system price range mentioned in the section above is based on standard market research. The actual final cost of a hybrid solar power system can significantly vary from the given range based on the panel type, inverter type, panel brand, inverter brand, etc. SolarSquare does not install hybrid solar systems. We only install on-grid rooftop solar panel systems at homes, housing societies, commercial buildings, and industries.

Which is Better, Hybrid or On-Grid Solar System?

An on-grid solar system is better for homes with a reliable grid connection because these systems are cheaper to install and maintain. Since the government does not impose any limits on exporting or importing energy to and from the grid in an on-grid rooftop solar system, it eliminates the need for batteries, as storage is not required. Plus, since most Indian cities have a reliable grid connection, power outages are rare. 

Let’s give you a simple cost comparison between hybrid and on-grid solar systems so you can compare the cost difference yourself:

*Please note: The above-mentioned solar plate price for on-grid solar systems is indicative as of 8th September 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Also, the hybrid solar system price range mentioned above is based on standard market research. The actual final cost of a hybrid solar power system can significantly vary from the given range based on the panel type, inverter type, panel brand, inverter brand, etc. SolarSquare does not install hybrid solar systems. We only install on-grid rooftop solar panel systems at homes, housing societies, commercial buildings, and industries.

Before we walk you through the details of the money an on-grid solar system can save for you in 25 years, here’s a table comparing on-grid and hybrid solar systems to make things simpler for you:

On-Grid Solar System Installation Cost vs Solar Savings in 25 Years

Most Indian homes prefer installing on-grid solar systems because these systems ultimately save tens of lakhs of rupees throughout their 25-year lifespan. Don’t believe us? Let’s talk some numbers then.

Here’s a side-by-side comparison of the estimated cost of installing a rooftop solar system in a city like Nagpur vs the money this system saves in 25 years of its life:

*Please note: The above-mentioned solar panel price of on-grid solar is indicative as of 8th September 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Additionally, while calculating savings, we have considered the annual tariff escalation at 3% and the annual degradation at 1%. The actual final savings from solar panel installation depend on the types of solar panels you’ve installed and their efficiency, intensity of sunlight your rooftop receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the roof, impact of dirt/dust, and how well you maintain your panels after installation.

If you’re not from Nagpur but are interested in checking how much money an on-grid solar system can save in your city, use SolarSquare’s solar roof calculator. 

What Are the Advantages of a Hybrid Grid Solar System?

A hybrid grid solar system offers bill savings as it produces solar electricity and backup when the grid goes down. It stores extra solar energy in a battery for nighttime use and power outages. Where the DISCOM allows it, the hybrid PV system can also export surplus to the grid through a net meter. 

Let’s check out all the advantages in detail:

• Backup during outages: When there’s a power cut, the battery keeps essential appliances running.
• Use solar day and night: During the daytime, solar energy charges the battery. That stored solar power can be used at night.
• Bill savings with flexibility: Solar energy first powers the loads. Then, if the batteries are discharged, solar energy charges the batteries. If DISCOM permits, excess power after batteries are charged can be exported to the grid. If export isn’t allowed, the system can still prioritize self-use.
• Clean, quiet backup: Hybrid solar systems do not use fossil fuel to generate electricity. Instead, they use solar radiation, which is completely green. Unlike a diesel generator, they don’t emit fumes or noise while operating.
• Protects sensitive loads: Many hybrid solar inverters smooth out voltage dips and switch over quickly during power cuts, which helps protect electronics.

What Are the Disadvantages of a Hybrid Solar System?

Hybrid solar power plants are useful, but they aren’t the right fit for homes, housing societies, and commercial buildings where the grid is reliable. Not only will you pay a substantial cost for batteries and added hardware, but the rules on exporting power also vary by state, which can change the savings you see. 

Here’s a detailed list of major disadvantages of hybrid solar systems that you must know:

• Higher upfront cost: Batteries and a hybrid inverter make the hybrid PV system a lot pricier than on-grid solar systems in India.
• Longer payback period: Because the system costs more, it takes longer to recover your money through bill savings.
• Battery replacement cost: While solar panels last 20-25 years, batteries don’t. Expect battery replacement every 5-10 years during the system’s life.
• Energy loss in charging: Some energy produced by solar panels is lost every time while charging and discharging the battery. Hence, total savings are a bit lower in hybrid grid solar systems.
• Limited backup duration: Backup runs only as long as the battery lasts. Heavy use or many appliances will drain it faster.
• The entire home doesn’t have a backup during grid failure by default: Most installs back up only essential circuits. Big loads like ACs, heaters, or solar pumps may be excluded unless you size the system for them.
• More parts add more complexity: Extra wiring, settings, and approvals mean a longer install and more things to check over time.
• Policy dependence: Net metering rules for hybrid rooftop solar systems change by state. If export is capped or disallowed, savings can decrease, and the battery may cycle more frequently.
• Added space and ventilation needs: Batteries and the hybrid solar inverter need safe wall space, airflow, and proper protection from heat and moisture.
• Heat can hurt battery life: Very high temperatures can reduce performance and shorten battery life if the area isn’t well ventilated.
• Not ideal with a very reliable grid: If outages are rare and the state allows easy net metering, an on-grid system gives the best ROI, not hybrid systems.

Conclusion 

A hybrid solar system connects PV panels to both the utility grid and a battery through a hybrid solar inverter. During the day, solar generation runs the loads first. Excess energy can charge the battery. Most hybrid inverters have built-in MPPTs, but some AC-coupled designs use a separate battery inverter. If the batteries are fully charged and the DISCOM permits export, surplus energy flows to the grid through the net meter, or the system is set to limit/zero export as required. 

At night or during outages, the battery can supply power to critical loads, subject to the inverter settings and the battery’s available state of charge. Despite this, a hybrid solar panel system is not ideal for Indian homes and housing societies with a reliable grid connection, as it is not only expensive to install but also expensive to maintain, given that the batteries incur replacement costs every 5-10 years.

For any further questions on what makes on-grid rooftop solar the better option in terms of investment, performance, and ROI, book a free solar consultation call with SolarSquare today.

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FAQs

Q1. What is the difference between hybrid and off-grid solar?

Ans. While a hybrid solar system is connected both to the grid and a battery bank, an off-grid solar system is connected just to a battery bank, not the grid.

Q2. What is the subsidy for a hybrid solar system?

Ans. While homes can get MNRE subsidy for grid-connected hybrid rooftop systems under the PM Surya Ghar Muft Bijli Yojana, you must use the approved equipment as listed on the National Portal. Final eligibility will depend on your DISCOM’s approval and metering setup. Some states restrict export or treat battery/behind-the-meter hybrid grid solar systems differently. So, not every hybrid system will qualify for a subsidy automatically.

Q3. What is a hybrid solar inverter?

Ans. A hybrid solar inverter works as both a solar inverter and a battery inverter. It converts direct current (DC) from solar panels as well as the battery bank into AC, charges the battery when there’s surplus solar power, uses the battery to keep the load running when solar energy is low, and, when the discom allows, exports excess power to the grid.

Q4. Can I convert on-grid solar to hybrid?

Ans. Yes, it’s possible. You can add a battery with an AC-coupled storage inverter to your existing system, or replace the current inverter with a hybrid model. However, you must check local DISCOM/permit requirements first.