Financial Comparison: Home Solar Installation Cost Versus Long-Term Savings

Home Solar Installation Cost Vs Long-Term Savings: A Financial Analysis

Homeowners are increasingly looking for sustainable and cost-effective ways to power their homes. With the increased demand for electrical energy, we need to find methods to generate clean energy. so that the scarcity of electrical energy does not affect the routine. We have coal-generated energy, but it emits toxic gas. We now know the alternate and evident fulfillment is solar energy. Though the sun provides abundant heat energy, converting solar heat energy to home-purpose power is a great process. With that said, many residential owners are concerned about the upfront home solar installation cost and wonder if the long-term savings are worth the investment. Solar energy for your home is definitely a money saver. This post will give you insight into how you are going to save your wallet from the regular electricity cost.

Home Solar Installation Cost Vs Long-Term Savings

Unlocking the Initial Investment: Understanding the Costs of Solar Panel Installation

Solar panels for home can be used as the entire source of electricity for your home. The power generated from the solar panels can be used as an alternative to the power supply from the grid. When considering a switch to solar energy for home, one of the primary concerns for homeowners is the initial investment required for solar panel installation. The installation is based on the unit requirement of the house. The size of the home and space available on the rooftop matter a lot in the installation. You will need to get an average usage of the last year when installing the solar panels for home. We see more solar power plants in India to provide the required amount of electricity.

Breaking Down the Initial Cost:

The initial cost of a solar panel installation can vary widely depending on several factors. Let’s look into the major factors.

  1. System Size: The system size varies between 1 kW to 10 kW based upon the requirement. The bigger the size of the system, the higher the cost of installation.
  2. Quality of Panels: There are polycrystalline and monocrystalline solar panels. The monocrystalline panels are considered to be more efficient. Once installed, the solar panels for home, last for 25 years or more. To measure the quality, a flash test will be conducted while installing. You will need to choose the panels from the best solar company in India. 
  3. Installation Costs: Home solar installation cost for generating 1 kWH electricity is Rs. 80,000 to 100,000 and this is calculated to be a standard price. The major factor when installing solar panels for home is energy consumption. The calculation must be done with the average of the previous usage of a year. This helps in deciding the size of the system.
  4. Location: The location of the home for which the solar panel needs to be installed matters based on the sunlight the solar panels receive. The scope for installation varies if the home is in a place where the sunlight is low. Hence the survey of the sight must be done.
  5. Financing Options: For Home solar installation costs, the homeowners can go for a loan with a bank or the solar panel company can also help them in purchasing and the money can be paid eventually to the solar panel company.

Long-Term Savings with Solar Panels:

While the initial investment may seem daunting, the long-term savings offered by solar panels can make the investment worthwhile.

  1. Reduced Energy Bills: The grid electricity bill will be increased by 2 to 5% year on year but with solar-generated electricity, you will not have this and you can sell the unused electricity to the grid.
  2. Net Metering: When the meter gets installed for the solar panel rooftop, it will be a two-way meter. One counts the amount of units that will be used by the homeowner and the other will be the amount of units that are returned to the grid. This way, homeowners can sell the unused electricity to the grid which is an earning.
  3. Reduced Maintenance Costs: It is only once the cost of the installation. Once all the panels are set and the meters are installed, the homeowners can just relax. The only care that must be taken is to clean the panels to make them dust-free.
  4. Increased Home Value: The solar energy for your home is uninterrupted and abundant. Once the homeowner puts the home for sale, he can add the cost of installed solar panels and the buyer will be happy with the solar panels installed as he never has to worry about the increasing electrical bills.

Calculating Your Payback Period with Freyr Energy: A Guide to Solar Investment Returns

Freyr Energy is the Best solar company in India. We can help you harness the power of the sun while reaping long-term financial benefits.

Understanding the Payback Period:

The payback period is the time it takes to recover your initial investment through energy savings and incentives. In general, the solar panels will take about 4 to 5 years to recover the money spent on installing them. This can be calculated in a simple way. You need to calculate the annual savings with reference to the initial electricity bill before installing the solar panels and below are the simple formulae for the same.

Payback Period (in years) = Total Initial Investment / Annual Energy Savings

Factors Affecting the Payback Period:

  1. Energy Consumption: If the electricity usage is high on unnecessary acts, this may affect the savings on electricity and may lead to delays in recovering the installation cost. 
  2. Electricity Rates: If the grid electricity rates decrease for a reason, this might cause the savings to be lesser and this might again lead to delays in recovering the installation cost. 
  3. System Size: If the average usage of the home is 5 kW and the homeowner installs it for 10 kW, then the cost of installation will be high and this will affect the payback period. With Net Metering the homeowner can sell the unused electricity but this option might not be available everywhere.


Investing in solar panels from Freyr Energy not only helps you reduce your carbon footprint but also offers a path to long-term financial savings. Home solar systems in India are a great concept for clean energy.

Asked Questions

Installing solar power definitely reduces electricity costs, as there will not be a hike, unlike the grid electricity bill.

Indeed, they are. Solar panels are more efficient and dependable.

Depends upon the system size. The Home solar installation cost for a 1 kW system can range from Rs. 85,000 to 100,000. The Solar panel price varies with each kW.

It is worth installing solar panels at home in India as India has the most sunlight available.

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