What is Rooftop Solar? Explore Working and Installation Cost vs Savings

A rooftop solar system is an on-grid, off-grid, or hybrid PV system that captures sunlight and converts it to usable electricity, which can be supplied to homes, housing societies, and commercial buildings. Under ideal conditions, a 1 kW solar for rooftops can generate 1,400 to 1,450 units of electricity annually and offset 25,872 kgs of carbon dioxide from the air in 25 years of its lifespan.

The main components of a rooftop solar system are solar panels that convert sunlight into DC output, solar inverters that convert DC (direct current) output into usable AC (alternating current), solar mounting structures on which the solar panels are fixed, and a bidirectional net meter that allows electricity exchange between the utility grid and the rooftop solar system.

The cost of installing rooftop solar at homes in India in 2025 with a subsidy under the PM Surya Ghar Muft Bijli Yojana can range between ~Rs. 90,000* in Lucknow for a 2 kW solar system and ~Rs. 5.62 lakh* in Bengaluru for a 10 kW solar system.

In this blog, we’ll explain the components, working, types, benefits, and cost of installing solar for rooftops in India with and without a subsidy. We will also explain how much power rooftop solar systems generate, how to find the ideal rooftop solar system size for your home, and whether or not a rooftop on-grid solar system is better than off-grid solar systems.

TL;DR Summary Box: How Much kW Solar Panel System is Required for a Home?

The ideal solar system size for a home is something that can take care of all your energy requirements. Considering that a 1 kW solar system can produce 1,400 to 1,450 units of electricity annually, here’s a simple table that highlights the ideal rooftop solar system size for homes based on yearly power consumption:

Yearly Power Consumption	Ideal Rooftop Solar System Size Required for Homes
1,400 to 1,450 units	1 kW solar panel system
2,800 to 2,900 units	2 kW solar panel system
4,200 to 4,350 units	3 kW solar panel system
5,600 to 5,800 units	4 kW solar panel system
7,000 to 7,250 units	5 kW solar panel system
14,000 to 14,500 units	10 kW solar panel system

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

Main Topics	Quick Takeaways
What is a rooftop solar system?	A rooftop solar system is a PV device that contains multiple components, like solar panels and solar inverters, to convert sunlight into usable electricity.
How does solar for rooftops work?	Solar panels catch sunlight and convert it to direct current (DC). This direct current is converted to the usable alternating current (AC) by the solar inverter.
What are the types of rooftop solar systems?	On-grid rooftop solar system, off-grid rooftop solar system, and hybrid rooftop solar system.
What is the cost of installing on-grid rooftop solar panel systems for homes?	It can range between ~Rs. 90,000* in Lucknow for a 2 kW solar system to ~Rs. 5.62 lakh* in Bengaluru for a 10 kW solar system after you avail of a subsidy under the PM Surya Ghar Muft Bijli Yojana.
How much subsidy does the government offer for installing on-grid rooftop solar systems?	Homeowners get a maximum subsidy of Rs. 78,000 under the PM Surya Ghar Muft Bijli Yojana. The subsidy for housing societies is capped at Rs. 90 lakh.
What are the benefits of installing rooftop solar in India?	Rooftop solar systems can reduce electricity bills by 90% or more and offset carbon dioxide from the atmosphere.
On-grid vs off-grid, which is better and why?	On-grid rooftop solar systems are more cost-effective and better because the government offers a subsidy for their installation, and they do not require batteries, making them cheaper than off-grid solar.

What is a Rooftop Solar System?

A rooftop solar system is a photovoltaic marvel that uses multiple components to convert sunlight into electricity. It can be installed on the roofs of homes, housing societies, as well as commercial and industrial complexes.

Since rooftop solar PV systems use solar energy to produce clean electricity, they do not pollute the environment and, when sized appropriately, reduce reliance on the grid, cutting electricity bills by more than 90%.

What Are the Types of Rooftop Solar Systems?

Rooftop solar systems are of three main types: on-grid rooftop solar systems that are connected to the grid, off-grid rooftop solar systems that are connected to a lithium battery bank (not the grid), and hybrid rooftop solar systems that are connected to both the grid and batteries.

Although the purpose of all three is to convert sunlight into solar electricity to power loads, they still differ. Let’s check out the basic functioning of all three types:

On-grid rooftop solar system: This solar system is connected to the grid. When the panels produce more electricity than what can be consumed in real time, the additional power is exported to the utility grid through a bi-directional meter. At night, the meter imports power from the grid to keep loads running.
Off-grid rooftop solar system: This standalone system is not connected to the grid. Instead, it has a battery bank. Additional power generated by the panels during the daytime is used to charge the batteries through a solar panel charge controller within the inverter. This stored power keeps loads running at night or whenever needed.
Hybrid rooftop solar system: This system is connected to both the grid and the battery bank. During the daytime, the additional power generated is used first to charge the battery. If any excess is still left, it is transferred to the grid through the bidirectional meter. During a power outage or at night, the power stored in the battery can be used to keep the load running.

The most preferred type of rooftop solar for housing societies, homes, and commercial buildings in India is the on-grid system. It’s the cheapest of the three types, offers the best return on investment, and is extremely trustworthy in urban areas with a reliable grid.

How Does Rooftop Solar Work?

Solar panels in the rooftop solar system absorb sunlight and use the photovoltaic effect to generate DC electricity. This DC power goes to the solar inverter that changes DC to alternating current (AC).

There are multiple components in a rooftop solar system that make the conversion of sunlight to electricity possible. Before we explain the step-by-step working of rooftop solar panel systems, here’s a glimpse of the main components and their primary roles:

Solar mounting structures: Solar panels are mounted on top of the solar mounting structures. When these structures are strong, like SolarSquare’s WindPro Mount™ IIT-Bombay-approved mounting structures, they ensure the panels stay tall even when wind speeds reach as high as 170 kmph.
Solar panels: These panels capture sunlight and use the photovoltaic effect to produce direct current. High-efficiency solar panels, such as bifacial panels made with mono-PERC half-cut cells, can convert up to 22.5% of sunlight into electricity.
Solar inverter: Its main role is to transform direct current into alternating current.
Bi-directional meter in on-grid and hybrid systems: This meter allows the exchange of electricity between the rooftop solar system and the utility grid.
A lithium battery bank in off-grid or hybrid solar systems: The role of batteries is to store solar energy so it can be used to run the load at night or when sunlight is scarce under cloud cover.
Solar accessories: These include DC and AC cables, DC and AC combiner boxes, earthing wires and conduit pipes, and MC4 connectors. All these components are crucial for securely connecting the other parts of the rooftop solar system.

Step-by-Step Working of Rooftop Solar Systems

The power generation process begins as soon as sunlight falls on solar panels, which are the most visible part of a rooftop solar system. No matter they’re residential or commercial rooftop systems, they all follow the steps listed below to generate electricity:

Step 1 – Solar panels absorb sunlight: Solar panels are made of multiple solar cells. These photovoltaic cells, usually made of silicon, absorb photons present in the sunlight.
Step 2 – Photons transfer their energy to electrons present in the silicon solar cells: Energized electrons leave their places, leaving behind positively charged holes. Precisely, every photon that displaces an electron results in the production of an electron-hole pair.
Step 3 – The built-in electric field in the solar cells keeps charges separated: This built-in field pushes electrons and holes in the opposite directions.
Step 4 – The electrons flow in one direction: The unidirectional flow of electrons is nothing but direct current (DC) power generated at the panel’s end.
Step 5 – The DC power goes to the inverter: If it’s an on-grid system, the inverter simply changes DC to AC, which is taken to the bidirectional meter for further supply. However, if the system is off-grid, the inverter uses this DC power to charge batteries through a built-in MPPT charge controller. In a hybrid system, an inverter converts some DC to AC and uses it to run the load. Extra power is used to charge batteries. And if anything still remains, it’s sent to the grid through the bidirectional meter.
Step 6 – The inverter sends AC to the bidirectional meter in an on-grid rooftop solar system: This meter supplies power to all household appliances. If the system generates more electricity than can be consumed, the meter sends it to the grid. At night, the meter imports electricity from the grid to keep the loads running. It keeps a record of the electricity exchange to and from the grid. If your system supplies more electricity to the grid than what’s imported, you earn credits from the DISCOM. If you import more power, you just pay for the extra grid electricity you’ve used.

What is the PM Surya Ghar Rooftop Solar Scheme for a Subsidy in India in 2025?

The rooftop solar scheme that reduces the cost of solar installation in India is the PM Surya Ghar Muft Bijli Yojana. Homes and housing societies installing on-grid solar for rooftops are eligible to apply for this subsidy scheme. If you’re planning to install off-grid solar systems, ground-mounted solar systems, or rooftop solar for commercial purposes, you won’t be eligible to get this subsidy.

Let’s check out how much subsidy homeowners get in India under the PM Surya Ghar Muft Bijli Yojana:

On-Grid Rooftop Solar System Size	Solar Subsidy in All States Except UP	Total Solar Subsidy in UP
1 kWp	Rs. 30,000	Rs. 30,000 + Rs. 15,000 = Rs. 45,000
2 kWp	Rs. 60,000	Rs. 60,000 + Rs. 30,000 = Rs. 90,000
3 kWp	Rs. 78,000	Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000
4 kWp	Rs. 78,000	Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000
5 kWp	Rs. 78,000	Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000
10 kWp	Rs. 78,000	Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000

Please note: The central government caps the maximum subsidy for homeowners at Rs. 78,000. Also, the UP government offers an additional subsidy capped at Rs. 30,000 to homeowners on top of the subsidy offered by the central government.

Now, let’s check out how much subsidy housing societies get as part of the PM Surya Ghar rooftop solar scheme:

Solar System Size	Solar Subsidy for Housing Societies Under the PM Surya Ghar Muft Bijli Yojana
100 kW	Rs. 18 lakh
200 kW	Rs. 36 lakh
500 kW	Rs. 90 lakh

Please note: Group housing societies (GHS) receive a subsidy of Rs. 18,000 per kW in India up to 500 kW (@3 kW per house) for common facilities.

Who is Eligible for PM Surya Ghar Subsidy?

Homeowners and housing societies installing on-grid rooftop solar systems in India are eligible to apply for a subsidy under the PM Surya Ghar Muft Bijli Yojana.

If you’re a homeowner, you also need to meet the criteria listed below to be considered for the subsidy:

You own a home with a rooftop
Your solar panels are Made-in-India DCR Modules
You have a valid electricity connection in your name
You are an Indian citizen
You have never availed of a solar subsidy for up to 3 kW systems

How to Apply for a Rooftop Solar Subsidy Scheme?

Here’s a step-by-step walkthrough of how you can apply for a subsidy under the PM Surya Ghar Muft Bijli Yojana:

Access the national portal: Visit the PM Surya Ghar Muft Bijli Yojana Portal and click ‘Apply for Rooftop Solar’.
Register your account: Select your state, district, and DISCOM. Then, enter your ‘Customer Account Number’.
Complete installation form: Provide personal details (like your name and gender) and your latest electricity bill information.
Upload required documents: Submit Proof of Identity, Proof of Ownership, and your most recent electricity bill.
Submit bank details: After uploading the documents, enter your bank account information and upload a cancelled cheque on the portal.
Choose an approved vendor: Select a DISCOM‑approved solar installer like SolarSquare to install rooftop solar at your home.
Net meter installation: Once installation is complete, your DISCOM will fit a bi‑directional net‑meter to track imported and exported units.
Obtain commissioning certificate: Your DISCOM issues a Solar Commissioning Certificate confirming the system is live.
Apply for subsidy: Log back into your customer account on the portal and submit your Commissioning Certificate to claim the subsidy.
Receive subsidy: The approved subsidy amount is transferred to your bank account within 30 days of claim approval.

What is the Cost of Installing On-Grid Solar For Rooftops at Homes?

Installing on-grid solar for rooftops at homes in India in 2025 can cost somewhere between ~Rs. 90,000* in Lucknow for a 2 kW solar system and ~Rs. 5.62 lakh* in Bengaluru for a 10 kW solar system after you avail of a subsidy under the PM Surya Ghar Muft Bijli Yojana.

*Please note: The above-mentioned solar panel price is indicative as of 22nd August 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.

Let’s take you through the solar rooftop price list in India with and without a subsidy:

Solar System Size	Solar Rooftop Price List in India Without Subsidy (Starting Price – Indicative for Base Variant)*	Solar Panel Price in India With Subsidy (Starting Price – Indicative for Base Variant)*
2 kWp solar system	~Rs. 1.8 lakh in Lucknow to ~Rs. 2 lakh in Bengaluru	~Rs. 90k in Lucknow to ~Rs. 1.40 lakh in Bengaluru
3 kWp solar system	~Rs. 2.10 lakh in Lucknow to ~Rs. 2.35 lakh in Bengaluru	~Rs. 1.02 lakh in Lucknow to ~Rs. 1.57 lakh in Bengaluru
4 kWp solar system	~Rs. 2.55 lakh in Lucknow to ~Rs. 2.85 lakh in Bengaluru	~Rs. 1.47 lakh in Lucknow to ~Rs. 2.07 lakh in Bengaluru
5 kWp solar system	~Rs. 3.10 lakh in Lucknow to ~Rs. 3.70 lakh in Bengaluru	~Rs. 2.02 lakh in Lucknow to ~Rs. 2.92 lakh in Bengaluru
10 kWp solar system	~Rs. 5.80 lakh in Lucknow to ~Rs. 6.40 lakh in Bengaluru	~Rs. 4.77 lakh in Lucknow to ~Rs. 5.62 lakh in Bengaluru

Rooftop Solar Installation Cost vs Solar Savings in 25 Years

The rooftop solar installation price for on-grid PV systems is recovered in 3-5 years. After that, you no longer need to pay for electricity for as long as the system lasts, and well-maintained systems can last for more than 25 years. Since you won’t be paying for electricity, you won’t be bothered by the tariff inflation, which annually happens in India at 3-6%.

End result? Lakhs of rupees saved that you would have otherwise paid in electricity bills. And just how much do we mean when we say lakhs of rupees are saved? Let’s give you a simple table comparing the cost of installing on-grid solar for rooftops in Nagpur vs the money that the system will save for you in 25 years:

Solar System Size	Solar Panel Price in Nagpur With Subsidy (Starting Price – Indicative for Base Variant)*	Solar Savings in Nagpur in 25 Years*
2 kWp	~ Rs. 1.15 lakh	~ Rs. 11.05 lakh
3 kWp	~ Rs. 1.32 lakh	~ Rs. 16.58 lakh
4 kWp	~ Rs. 1.77 lakh	~ Rs. 22.11 lakh
5 kWp	~ Rs. 2.27 lakh	~ Rs. 34.43 lakh
10 kWp	~ Rs. 5.02 lakh	~ Rs. 68.86 lakh

*Please note: The above-mentioned rooftop solar price list is indicative as of 22nd August 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.

You can use SolarSquare’s free solar rooftop calculator to calculate the money you can save in your city by choosing an on-grid rooftop solar system.

What Factors Affect the Rooftop Solar Cost in India?

Your system size (kWp), the panel and inverter you choose, the roof and structure requirements, and DISCOM and government charges are a few factors that can impact the final price for rooftop solar in India.

Here’s a detailed snapshot of all key factors that affect the final rooftop solar cost in India:

Type of solar panel you choose: Different solar panels have different efficiencies. A higher efficiency panel converts more sunlight into electricity, but it also costs more.
Solar system size: A 5 kW solar system will naturally cost more than a 3 kW solar system. The higher the system’s capacity, the pricier it will be.
Type of solar inverter you choose: Solar inverters that use the MPPT algorithm are able to ensure solar panels generate maximum possible electricity at any given point during the day. Naturally, they cost more since they ensure maximum power generation even when sunlight is scarce or shadows afflict the roof.
Height of the mounting structure: The higher the structure, the more the installation cost. Wind zone and roof type also matter. Bear in mind that stronger structures cost more.
Types of after-sales services you purchase: The final cost also depends on whether or not you choose an after-sales service plan provided by the installer. It’s strongly recommended to choose an after-service plan because solar systems need to be maintained after installation. Panels and inverters must be cleaned and checked periodically to ensure their efficiency isn’t hampered by dust, dirt, pollution, moisture, and bird droppings.
Whether or not you get a subsidy: If you are eligible for a subsidy, naturally, your system will cost less.
DISCOM and net-metering charges: You might have to pay application/registration, inspection/testing, and net meter charges. These vary by state/DISCOM.

What Are the Benefits of Installing Rooftop Solar Systems?

Installing solar on rooftops can reduce your electricity bills by more than 90%, save lakhs of rupees throughout the system’s life, and offset carbon dioxide from the air, tackling India’s air pollution problem.

Let’s understand all the benefits in detail.

#1. It Reduces Electricity Bills by 90% or More

The initial installation cost is recovered in 3-5 years. After that, the solar system continues to generate free solar electricity right from your rooftop. This reduces your reliance on expensive grid electricity. A properly-sized solar system can reduce electricity bills by 90% or more. Many customers also report zero bills after they go solar.

#2. It Saves Lakhs of Rupees in 25 Years

Installing a rooftop solar as small as 3 kW in a city like Nagpur at an investment of ~ Rs. 1.32 lakh* after a subsidy will end up saving ~ Rs. 16.58 lakh* in 25 years of the system’s life.

*Please note: The above-mentioned solar plate price is indicative as of 22nd August 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.

#3. It Can Tackle India’s Air Pollution Problem

Installing something as small as 1 kW rooftop solar has an impact of planting 39 full-grown trees that can offset 25,872 kg of carbon dioxide from the air. That rooftop solar system on your rooftop can, therefore, work like a natural air purifier, making the air breathable again. Imagine the impact when all homes in India are solar-powered.

Here’s a snapshot of how much carbon different capacity solar systems can offset:

Solar System Size	Equivalent to Planting How Many Trees?	Carbon Dioxide They Offset in 25 Years
1 kW	39	25,872 kg
2 kW	78	51,744 kg
3 kW	118	77,616 kg
4 kW	157	1,03,488 kg
5 kW	196	1,29,360 kg
10 kW	392	2,58,720 kg

How to Calculate Rooftop Solar Capacity?

You can calculate the estimated size of the solar system that will be able to take care of your energy requirements without falling back on grid power by estimating how much electricity your household consumes yearly.

Here’s what you can do:

Review your electricity bills from last year
Calculate the average number of units consumed in a year
Divide the yearly units consumed at your home by the number of units a 1 kW solar system generates (1,400* units/year).

*On average, a 1 kW solar system produces 1,400-1,450 units per year.

Here’s a tabulated snapshot of the estimated solar system size based on the units consumed:

Number of Units Consumed Yearly	Calculation	Right Solar System Size
1,400 to 1,450 units	1,400 ÷ 1,400	1 kW
2,800 to 2,900 units	2,800 ÷ 1,400	2 kW
4,200 to 4,350 units	4,200 ÷ 1,400	3 kW
5,600 to 5,800 units	5,600 ÷ 1,400	4 kW
7,000 to 7,250 units	7,000 ÷ 1,400	5 kW
14,000 to 14,500 units	14,000 ÷ 1,400	10 kW

On-Grid Rooftop Solar vs Off-Grid Solar Systems, Which is Better For Homes?

Installing on-grid solar for rooftops at homes, housing societies, and commercial complexes is a lot more affordable than going off-grid for two reasons:

Homeowners and housing societies get a subsidy for installing on-grid rooftop solar systems: The government offers a subsidy only for on-grid rooftop solar, not off-grid systems.
There’s no additional cost for batteries: Lithium batteries are expensive to install, maintain, and replace. They make off-grid solar systems a lot more expensive than on-grid solar systems because the latter do not require batteries.

Unless you live in rural areas with a very unreliable grid power or no grid supply at all, choose on-grid rooftop solar panel systems. They will reduce your electricity bills by at least 90% and you’ll also get financial assistance in the form of a subsidy.

Why Choose SolarSquare to Install Rooftop Solar at Your Home?

SolarSquare is India’s first and only rooftop solar installation company that offers a money-back guarantee. If the solar system we install on your rooftop fails to deliver the power we promised, we will compensate you for the deficit at Rs. 8 per unit.

But, that’s not the only reason 7,000+ customers have rated us 4.8 on Google. Here are the many reasons that customers all across India trust us with their rooftops:

Our WindPro Mount™ IIT-Bombay-approved mounting structures are storm-proof: Our mounting structures are built to withstand cyclonic winds up to 170 kmph. They boast an HDGI 80-micron coating, which makes the mounts rust-proof.
We offer a zero-investment plan and solar loans: Once you book a solar system with SolarSquare, your down payment will be zero rupees. How? The subsidy you receive will offset the initial down payment. It means, there won’t be any upfront out-of-pocket expense. Moreover, the loan we offer has customizable EMI options. You can choose an EMI between 6 to 60 months. Design them to match your electricity bills so your monthly budget doesn’t get affected.
We offer a 360° power boost maintenance plan: This is a comprehensive 5-year after-sales plan that ensures we pay a minimum of 45 maintenance visits to maintain your solar system’s health. These include deep cleaning services, panel maintenance, 24×7 support, and inspections to check the electrical, structural, and mechanical strength of your rooftop solar system.

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Conclusion

Installing on-grid rooftop solar in India can reduce your electricity bills by 90% because the system on your rooftop will generate free solar electricity for you throughout the 25 years of its life. An on-grid rooftop solar system can be scaled up or down depending on the power requirements. It’s handy for homes, housing societies, as well as commercial or industrial buildings.

Compared to ground-mounted systems, which occupy a large area of your land, cost significantly more, and are not eligible for subsidies, on-grid rooftop solar offers a much better ROI. For any further information, you can book a free solar consultation with SolarSquare today.

FAQs

Q1. How much roof space is needed for a 5 kW solar system?

Ans. As a thumb rule, a 1 kW solar system requires 100 square feet of shadow-free area on the roof. So, a 5 kW solar system will require around 500 square feet of shadow-free area for rooftop installation.

Q2. How many solar panels are required for a 3 kW solar system?

Ans. Suppose you’re using SolarSquare’s 540-watt bifacial solar panels, then you would require ~6 solar panels to install a 3 kW solar system. Here’s the formula we’ve used to make the calculation: Number of solar panels required = Solar system’s capacity in watt-peak ÷ the capacity of the module.

Q3. How many ACs can run on a 3 kW solar system?

Ans. A 3 kW solar system can generate 4,200 to 4,350 units of electricity annually. This is enough to support a single 1.5-ton AC alongside appliances like a washing machine, an LED TV, a refrigerator, a few fans, and lights. However, if you want to install more than 1 AC, you will most likely require a 5 kW solar system.

Q4. Does rooftop solar work during power cuts?

Ans. On-grid rooftop solar systems do not work during power cuts. This is an in-built safety feature known as anti-islanding. It’s crucial that the system automatically shuts down when grid power is lost, preventing linemen working on faulty sites from getting electrocuted. An off-grid or hybrid system can supply power during an outage using the energy stored in the batteries.