Calculator

Solar Payback and Savings Calculator

Most payback calculators divide cost by first-year savings and stop. That ignores two things: panels get weaker every year, and electricity gets costlier every year. This one works out all 25 years, one at a time.

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Payback on a 3 kW system

5 years 5 months
net cost ₹1,17,000 after ₹78,000 subsidy
Year 1 saving₹19,650
25-year savings₹8.51 lakh
Net gain₹7.34 lakh
Tariff used₹6
0k 2.3L 4.6L 6.9L 9.2L You paid ₹117,000 Paid back in year 6 Now Yr 5 Yr 10 Yr 15 Yr 20 Yr 25
Blue area is the money you have saved so far. The dotted orange line is what the system cost you after subsidy. Where they meet, your solar has paid for itself.
Most calculators would tell you something different. They divide the cost by your first year saving. That gives 6 years and ₹4.91 lakh in lifetime savings. Ours says ₹3.6 lakh more, because electricity will not cost the same in 2050 as it does today.
Applied each year: 0.6% panel degradation and 4% tariff escalation. Generation falls from 5,055 units in year 1 to 4,375 in year 25, while the tariff rises from ₹6 to ₹15.38.

Year by year

YearGenerationTariffExportedNet savingCumulative
1 5,055 ₹6 1,455 ₹19,650 ₹19,650
2 5,025 ₹6.24 1,425 ₹20,514 ₹40,164
3 4,995 ₹6.49 1,395 ₹21,413 ₹61,577
4 4,965 ₹6.75 1,365 ₹22,347 ₹83,924
5 4,935 ₹7.02 1,335 ₹23,319 ₹1,07,243
6 4,905 ₹7.3 1,305 ₹24,330 ₹1,31,572
7 4,876 ₹7.59 1,276 ₹25,381 ₹1,56,953
8 4,846 ₹7.9 1,246 ₹26,474 ₹1,83,427
9 4,817 ₹8.21 1,217 ₹27,611 ₹2,11,038
10 4,788 ₹8.54 1,188 ₹28,794 ₹2,39,832
11 4,760 ₹8.88 1,160 ₹30,023 ₹2,69,855
12 4,731 ₹9.24 1,131 ₹31,302 ₹3,01,157
13 4,703 ₹9.61 1,103 ₹32,632 ₹3,33,790
14 4,675 ₹9.99 1,075 ₹34,016 ₹3,67,805
15 4,647 ₹10.39 1,047 ₹35,454 ₹4,03,259
16 4,619 ₹10.81 1,019 ₹36,950 ₹4,40,210
17 4,591 ₹11.24 991 ₹38,506 ₹4,78,716
18 4,563 ₹11.69 963 ₹40,125 ₹5,18,841
19 4,536 ₹12.15 936 ₹41,808 ₹5,60,649
20 4,509 ₹12.64 909 ₹43,558 ₹6,04,206
21 4,482 ₹13.15 882 ₹45,378 ₹6,49,585
22 4,455 ₹13.67 855 ₹47,271 ₹6,96,856
23 4,428 ₹14.22 828 ₹49,240 ₹7,46,096
24 4,402 ₹14.79 802 ₹51,288 ₹7,97,384
25 4,375 ₹15.38 775 ₹53,417 ₹8,50,802

The highlighted row is the year cumulative savings overtake the net cost. An inverter replacement, usually needed somewhere between years 10 and 15, is not included above.

The formula

Net cost = System cost - Subsidy For each year from 1 to 25: Generation = Year 1 generation x (1 - 0.006) ^ (year - 1) Tariff = Today's tariff x (1 + 0.04) ^ (year - 1) Saving = Generation x Tariff Payback = the first year total savings cross net cost Panels lose about 0.6% output every year. Electricity tariffs rise about 4% every year.

What this assumes

  • Panel ageing is taken as 0.6% a year, which matches most manufacturer warranties.
  • Tariff rise is taken as 4% a year, based on how Indian tariffs have moved historically. Nobody can promise the future.
  • Inverter replacement around year 12 to 15 is NOT included. Budget Rs 25,000 to Rs 50,000 for it.
  • Assumes you use most of what you generate. If your state does net billing, your savings will be lower.
  • Cleaning and maintenance costs are not included. They are small but not zero.

Common questions

How many years does solar take to pay back?

For a normal home system with subsidy, usually 4 to 6 years. After that the electricity is effectively free for another 20 years. Your exact number depends on your tariff and how much sun your area gets.

Why is your answer different from other calculators?

Most of them multiply your first year saving by 25. That treats electricity in 2050 as costing the same as today, which it will not. We work out each year separately. The difference is usually 15 to 20%.

Do panels really stop working after 25 years?

No. They keep working, just at lower output, usually around 80 to 85% of new. Twenty five years is the warranty period, not the death date.

What about inverter replacement?

The inverter usually needs replacing once, around year 12 to 15. Budget Rs 25,000 to Rs 50,000. We do not include it in the projection, so subtract it mentally from the 25 year figure.

Data last reviewed August 2026 Full methodology Disclaimer