The Savings Equation
Solar savings come from one simple mechanism: generating your own electricity instead of buying it from the grid. The basic calculation is:
For community solar or Virtual Net Metering (VNM), the applicable credit rate is determined by the relevant regulatory framework. For rooftop net metering, the value of exported electricity depends on the applicable DISCOM rules.
Key Factors That Determine Your Savings
Electricity Consumption
The total kilowatt-hours your household or facility consumes each billing cycle helps determine an appropriate solar allocation.
Applicable DISCOM Tariff Slab
Higher consumption slabs in some Indian states can have higher per-unit tariffs, which can affect the value of solar bill offsets.
Solar Allocation (kW)
The capacity of your solar system or community-solar allocation influences the amount of electricity your solar share can generate.
DISCOM & VNM Regulations
State-specific rules determine credit accounting, rollover, settlement cycles, export treatment, and other important billing conditions.
India-Wide Solar Savings Scenarios
Example assumptions: 4.5 kWh/kW/day generation, ₹7.50/unit tariff, 5% annual tariff escalation, 0.5% annual degradation, and a 25-year system life. These figures are illustrative and are not a savings guarantee.
These examples use a general India-wide savings model and are separate from Lumifly's interactive calculator methodology, which uses its own tariff, subsidy and project assumptions. See the interactive calculator methodology.
| System | Monthly Gen | Year 1 Savings | Assumed Net Cost | Payback | 25-Yr Savings |
|---|---|---|---|---|---|
| 2 kW | 270 kWh | ₹24,300 | ₹1.26L | 5.2 yr | ₹10.8L |
| 3 kW | 405 kWh | ₹36,450 | ₹1.75L | 4.8 yr | ₹16.2L |
| 5 kW | 675 kWh | ₹60,750 | ₹2.73L | 4.5 yr | ₹27.0L |
| 10 kW | 1,350 kWh | ₹1,21,500 | ₹5.10L | 4.2 yr | ₹54.0L |
Calculation basis: Monthly generation is capacity × 4.5 kWh/kW/day × 30 days. Year-1 savings are monthly generation × ₹7.50/kWh × 12. Simple payback is assumed net cost ÷ year-1 savings. The 25-year figures sum nominal annual savings using 5% tariff escalation and 0.5% annual generation degradation; they are not discounted to present value.
Disclaimer: These are general India-wide planning scenarios, not Lumifly calculator outputs. Actual outcomes depend on tariff, location, generation, project structure, financing, maintenance and regulation.
Managed Solar Savings Model
With Lumifly managed solar, the economics can shift from capital investment to subscription value.
Subscription Model
- • Monthly subscription fee
- • Monthly VNM or solar credits
- • Difference between credits and subscription can represent savings
- • Potentially lower upfront cost than purchasing a rooftop system
Lifetime Value Comparison
- • Rooftop solar requires upfront capital or financing
- • Community solar can reduce the upfront barrier
- • Rooftop systems may provide higher absolute lifetime savings
- • Community solar can provide a simpler, lower-maintenance model
Note: VNM credit rates and subscription fees vary by project, DISCOM, and state regulation. Any example should be treated as illustrative.
Lifetime Value: The 25-Year View
Solar is a long-term investment. Looking only at the first year's bill reduction can hide much of the potential lifetime value.
Tariff Escalation Protection
If grid electricity prices increase over time, the value of electricity generated by a solar system can also increase.
Panel Degradation
Solar modules gradually lose generation capacity over time. Modern modules are designed to retain a substantial portion of their original output after decades of operation.
Inverter Replacement
Depending on the equipment and warranty, an inverter may need replacement during the system lifetime. Include this potential cost in a long-term ROI calculation.
Maintenance
Cleaning, inspections, repairs, insurance, and monitoring can affect the total cost of ownership and should be included in a realistic calculation.
Property Value
A rooftop solar installation may contribute to property value, although the effect varies by location, property type, system ownership, and market conditions.
