Chandigarh: Despite govt subsidies and incentives under the PM Surya Ghar: Muft Bijli Yojana (PMSGMBY), adoption of rooftop solar power plants among private households in Chandigarh remains limited.
This prompted the Chandigarh Renewable Energy, Science & Technology Promotion Society (CREST) to release a detailed cost-benefit analysis showcasing substantial financial advantages.
According to the CREST study, a typical rooftop solar plant with a capacity of 2 kWp to 3 kWp can reduce monthly electricity bills by Rs 1,000 to Rs 2,000, translating to annual savings of Rs 13,000 to Rs 14,000, depending on the size of the system and power consumption of the household.
The analysis further indicates that such systems typically achieve payback within four to five years. Over the remaining lifespan of the plant (often 20 to 25 years), homeowners could realise net profits of up to Rs 4 lakh, making solar a highly lucrative long-term investment.
In a specific example, CREST examined a 2 kWp system assuming average monthly consumption of 700 kWh. Without a loan, the system delivers monthly savings of approximately Rs 1,156 on power bills and reaches payback in under five years. Post-payback, it generates pure annual savings of Rs 13,800 to Rs 14,000. Over the full utility period, this results in roughly Rs 2.86 lakh in net profit.
Even when financed through a loan (available at low interest rates under the scheme), the benefits remain attractive. During the loan repayment period, households enjoy immediate monthly savings of about Rs 490, with total profits over the plant's life reaching around Rs 2.66 lakh.
The central govt's PMSGMBY scheme provides subsidies of up to Rs 78,000 for systems up to 3 kWp, along with access to collateral-free loans at preferential rates (around 5.75% to 6%), single-window support, and direct benefit transfers.
Progress in Chandigarh shows good results in the govt sector, where CREST achieved 100% coverage across all eligible 6,606 govt houses. In contrast, among approximately 43,000 eligible private houses, only 4,352 have installed rooftop solar systems so far, including 1,034 under the PMSGMBY scheme.
BOX – Graphics
Two cases for a 3 kWp rooftop solar plant with 700 kWh monthly consumption
Case 1: Without Loan (Full upfront payment after subsidy)
— Rooftop area required: 18 to 22 sqm
— Electricity bill without solar: Rs 3,295
— Monthly generation from 3 kWp plant: 321 kWh
— Monetary value of generated power (as per tariff): ₹1,733
— Surplus units/month: 0 (no net export/credit assumed in this scenario)
—Total cost of plant (including all expenses/GST): Rs 1,80,000.
—Central financial assistance (CFA)/subsidy: Rs 78,000.
— Net cost to consumer after subsidy: Rs 1,02,000
— Electricity bill after solar offset: Rs 1,562 per month
— Monthly savings: Approximately Rs 1,733 (offset value)
— ROI/Payback period: 4.9 years
— Pure annual profit from 5th year onward (up to 25 years, ie, over 19 years): Rs 20,500 to Rs 21,000 per year
— Total profit over 20 years: Rs 4.17 lakh
Case 2: With Loan (EMI financing, zero upfront net investment)
— Electricity bill without solar (for 700 kWh monthly, as per tariff): Rs 3,255 (slight variation noted in data)
— Monthly generation from 3 kWp plant: 321 kWh
— Monetary value of generated power (as per tariff): Rs 1,733
— Total cost of plant (including all expenses): Rs 1,80,000
— Loan amount (90% of project cost at 6% interest): Rs 1,62,000
— Consumer upfront/initial payment (10% of project cost): Rs 18,000.
— CFA/Subsidy: Rs 60,000 (adjusted in loan processing)
— Actual effective loan amount after subsidy adjustment (subsidy partly recovers initial payment): Rs 1,02,000.
— Net total investment by consumer: 0 (subsidy and loan structure cover full cost)
— Monthly EMI (for 10 years): Rs 1,133
— Electricity bill after solar offset: Rs 1,522 per month
— Monthly profit after paying EMI (during loan period, years 1 to 10): Rs 600 (net savings after EMI deduction)
— Annual profit during loan period (years 1 to 10): Rs 7,200
—ROI: Not applicable (due to 0 upfront investment)
— Pure annual profit from year 11 onward (up to 25 years, i.e, over 15 years): Rs 20,500 to Rs 21,000 per year
— Total profit over 25 years: Rs 3.81 lakh
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