8 things you should know before setting up Rooftop Solar (RTS) Panels

Switching to solar energy can be a commendable step towards sustainability and reducing electricity bills, but there are several important factors to keep in mind before setting up rooftop solar (RTS) panels. Here are 8 things to keep in mind before you take a shine to RTS: 

1) Mind the Cost
The initial investment for rooftop solar can be significant. The price includes the cost of panels, inverters, installation, and maintenance. It's crucial to budget wisely and consider the long-term savings on electricity bills. “There is an initial fixed cost involved. For example, for a 1 kW connection, the set-up costs around Rs 90,000, for 2 kW the expenditure is around Rs 1.5 lakh, and for 3 kW, the cost is Rs 2 lakh,” says says Sandeep Sahoo, Partner at Odisha-based Prakruti, Energy, a wholesaler of solar panels.

2) Eligibility for Subsidy
If you plan to instal rooftop solar panels for a residential household, you can apply for a subsidy under the PM Surya Ghar Muft Bijli Yojana. Under the scheme, there is a subsidy of Rs 30,000 per kW up to 2 kW and Rs 18,000 per kW for additional capacity up to 3 kW. However, the total subsidy for systems larger than 3 kW is capped at Rs 78,000.

A consumer can apply for the subsidy through either discom-tendered projects or the National Portal of India, as stated by then Minister of New and Renewable Energy R.K. Singh in a written response to a Lok Sabha query last year. “On the national portal, consumers have the option to select any vendor and choose the brand and quality/efficiency of the solar equipment.” 

Moreover, to benefit from subsidies, your installation should not exceed 85% of your sanctioned load. Additionally, the subsidies are only applicable to solar panels manufactured in India. Verify these conditions to avoid any financial disappointments.

3) Long-Term Investment
Installing rooftop solar panels is a long-term investment. While the initial setup costs can be high, the potential reduction in electricity bills and environmental benefits make it a worthwhile consideration. Considering that 1 kW produces 120 kWh of energy, total yearly savings from a 3 kW solar plant, assuming an average price of Rs 7 per unit, amount to Rs 30,240.

Additionally, factors such as increasing grid electricity tariffs, availability of financial incentives, and net metering also influence the total long-term savings. However, it is important to note that a 3 kW solar system costs around Rs 2 lakh without subsidy. After accounting for subsidy, the cost reduces by 39%—to approximately Rs 1.2 lakh. Hence, it typically takes around four years to achieve the break-even point before benefits from solar energy.

4) Type of solar panels

Apart from the sanctioned load, the cost of setting up also depends on the type of solar panels. For instance, the primary types are poly panels, mono panels, and bifacial solar panels.
Polycrystalline or poly panels feature multiple crystals in each cell, giving them a blue look. They
are made by melting raw silicon, which results in several crystals forming in each cell. Therefore, they have a lower efficiency compared to monocrystalline panels as the presence of many crystals can inhibit the movement of electrons. This reduces the panel’s energy output. However, they offer a more affordable solution and are ideal for large roofs without any space constraints. Mono panels are recognised by their dark black colour and uniform appearance. They are built with a single silicon wafer and are more expensive than poly panels. Lastly, bifacial solar panels can absorb sunlight from both sides. They are designed to generate power from the front side while capturing reflected sunlight from the rear side. This dual action can significantly increase the total energy yield. “Each type of solar rooftop panel offers unique advantages. The choice ultimately depends on your budget, space constraints, amount of sunlight received, and electricity needs,” says Sahoo.

5) Ownership and Documentation

Your current electricity connection must be in your name to qualify for government benefits. Moreover, ensure that the names on your bank account, electricity bill, and Aadhaar card are consistent. This consistency is essential for smooth processing of subsidies and other formalities.

6) Dependence on Grid Power

Solar panels alone cannot power your home without grid electricity. During power outages, an inverter is required to use the energy stored in the solar panels. This dependency should be a key consideration in your planning. Choose the inverter capacity wisely based on your home’s power requirements.

7) Space Requirement

A shadow-free space is essential for the efficient functioning of solar panels. For instance, installing a 1 kW requires 100 sq. ft and 3 kW solar plant requires about 300 sq. ft. of open area. Evaluate your rooftop space before deciding on the system size.

8) Net Metering

This net metering initiative enables you to lower your electricity bills during sunnier days and even sell surplus energy back to the grid, offering an opportunity to have an additional income. It helps in feeding the excess units back into the grid when more energy is produced than consumed. The energy meter essentially ‘nets’ out the power that was consumed and the power that was generated. In practical terms, a homeowner might use a certain amount of electricity during peak sun hours and then feed the same or a greater amount of solar-generated electricity back into the grid. “The excess units generated in a month get adjusted in the next bill. Then at the end of the financial year, the discom pays you for surplus units generated in the last 12 months at 75% of the existing rates,” says Vikas Agarwal, CoFounder and Chief Business Officer of Credit Fair, a consumer lending fintech start-up. 

Understanding these factors will enable you to make an informed decision when setting up a rooftop solar system, ensuring a smoother and more effective transition to solar energy.