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On-Grid Solar System: A Complete Guide About Price, Benefits, Working and more

30 min read | By admin

On-grid solar systems are often the first choice for home solar systems as they are flexible and cost-effective. If you are looking for an efficient and green energy source to meet your power needs, consider going solar now. 

With an on-grid system, you have the flexibility to start with a primary energy-generating plant. Then, once you are satisfied with its performance, you can upgrade it. You also can add a battery bank to your solar system setup to tap into the maximum potential of solar technology. 

What Is an On-Grid Solar System?

On-grid refers to a type of solar system that is tied to the local grid. It is highly recommended for domestic use as household energy needs change, usually per diem. The system is designed to manage electricity when energy output exceeds or falls below your requirement. 

On-Grid Solar System

In this system, the grid acts as your battery bank. When the panels get less sunshine and fail to give standard energy output, you can switch to grid electricity instead of buying a battery. In addition, the on-grid system will automatically transfer excess and unused solar electricity to the grid, allowing you to build credit. These solar credits then can be used to purchase grid electricity, or you can cash them out by the end of the year. This arrangement works under the net metering system.

How Does an On-Grid Solar System for Home Work?

Like other types of solar plants, the panel generates electricity in an on-grid solar system. However, since the system is connected to the local grid, the net metering system plays an important role in your monthly electricity cost.

An on-grid solar power system provides your home with the electricity required during sunshine hours. As it is connected to the grid, you can draw power from the battery storage when electricity generation is low — primarily during the night and on cold and cloudy days. The arrangement of solar panels on the roof captures maximum sunlight and converts it into solar power. This energy generated in DC form runs through the inverter to transform into alternating current (AC). This solar electricity is suitable for running your home appliances and all electronic devices. 

When the solar energy generated is more than the requirements of your house, the unused power is fed to the national grid. Similarly, you can draw power from the grid when there is insufficient energy production. The meter box records the import and export of power and eventually tells you the net amount to be paid/received through monthly utility bills.

Components of a Grid-Connected Solar System

The main workhorses in an on-grid solar system for home are the roof-mounted solar panels that convert sunshine into solar energy and the bi-directional inverters that turn DC energy into AC electricity for domestic use. 

The key components that a working on-grid solar system requires are:

PV modules/panels

Solar panels are the key working component of a solar plant. Each solar panel comprises photovoltaic cells (PV cells) placed between semiconducting materials (like silicon). A current field is generated when photons in the sunlight fall on this material – a process called the photoelectric effect. This results in the generation of direct current or DC electricity.

Bi-directional inverter

The direct current of electricity passes through the inverter and comes out as alternating current (AC). Bi-directional inverters also work to stabilise the output voltage. If you choose to buy a battery bank, this type of inverter will facilitate AC to DC conversion for battery charging.

AC breaker panel with fuses

This type of panel provides a single platform for not only the domestic supply of electricity but also for inverter and filter connections.

Charge controller

It prevents overcharging of the battery and helps prolong the lifespan of your PV system.

Electric meters

The purpose of electric meters is to bill and quantify the energy generated and used. Two meters are required in the working of a PV generator.

Safety switches and cabling

Safety switches (isolation switching and control) are required to disconnect both the AC side and DC side of the bi-directional inverter during testing and maintenance. Also, cabling is used to connect the different solar components together.

Electricity grid

On-grid solar systems are connected to the utility grid for the two-way flow of electricity between the grid and your solar plant under net metering.

Benefits of an On-Grid Solar System

There are plenty of advantages of an on-grid solar system for homeowners beyond the fact that it costs less than other types of solar systems since fewer components are needed. Also, the financial benefits of solar for homes outweigh the cost of PV systems over time, not to mention the incredible environmental benefits solar offers.

  • Constant supply of power

A grid-connected solar system guarantees that your home always gets power, even when your solar system is undergoing repair or generates insufficient power on rainy and cloudy days. You can also opt for a battery bank when personalising your system to store some surplus energy to be used when the grid is down. As a result, you are not entirely dependent on the sun and can draw any additional energy, when needed, from the grid.

  • Energy Cost Savings

With solar powering your home, your monthly energy bill plummets, giving you the joy of small savings. These small portions add up to show significant savings. Additionally, solar investment also promises high returns. Every month you use solar electricity and don’t purchase any grid electricity, your bill will reflect a nominal charge. On days when your panels generate excess electricity, you can export it to the government grid for credit units, which will also reflect in your monthly utility bills. When your electricity exports exceed your imports, you will be paid at tariff rates fixed by the government. Your solar system not only reduces your electricity cost but also becomes a source of your income. These savings accumulate into a large amount over the years, just as enough even offset your initial solar cost in just 6-8 years.

  • Generate your own electricity

When you live in a solar-equipped home, you are nearly grid-independent and can generate the amount of electricity you need to function every day. Your solar company ensures that you get the right capacity of an on-grid solar system based on your electricity needs so that the days when you get to switch to the government grid are as few as possible. Moreover, today’s photovoltaic solar panels are more energy-efficient and give higher energy output against the amount of sunshine captured by each solar cell. As a result, less area and few panels are needed to meet your electricity requirements.

  • Environmentally-friendly

The environmental benefits of solar are a major reason why you should get rooftop solar and why the government is offering subsidies to make on-grid solar power systems more affordable for homes. By adopting solar, you reduce greenhouse gas emissions, lower the demand for fossil fuels, and eventually decrease your own carbon footprint.

On-Grid Solar System Prices in India

Here is a ballpark estimate of on-grid solar system prices in India. However, figuring out the exact cost for your household will require factoring in subsidy, the size and type of your system, and your location. Again, an experienced solar company will be able to help you. 

Most homeowners prefer on-grid systems as they offer flexibility and a high return on investment through net metering. Although multiple variables influence the final cost of solar for a household, a standard system ranges from Rs. Rs. 66,999 for a 1kW model to over Rs. 4 lakh for a 10 kW model.

Please note that: 

  • The on-grid solar system prices mentioned above are ballpark figures as per watt cost might vary due to location, availability, promotions, and solar brand.
  • The prices are exclusive of subsidies being offered. The subsidy is based on the buyer’s eligibility and the type of solar system setup.
  • Homescape can provide you with a more accurate estimate on your right-fit on-grid solar system in UP or anywhere in India.

Installation Cost of On-Grid Solar Systems In India

Typically, the total cost of your on-grid solar system is inclusive of the installation charges, which depend on factors like the number of panels in your solar plant and the complexity of the installation.

If you select an experienced solar company in India that provides one-stop solar solutions, their offerings are inclusive of all costs. Your solar provider will create a customised design for the on-grid solar system for your home, and the system will be topped with warranties and AMC maintenance packages. You will also receive an efficient installation service and a streamlined process for the commissioning of your solar plant. Your solar company should be able to provide a detailed breakup of the total cost of your plant.

However, a major chunk of your total installation cost is related to setting up the solar panels on your rooftop. A typical install takes 4-6 hours, depending on the design and size of your solar structure. Hence, the installation cost might fluctuate based on the time required to set up the entire solar panel plant and the complexity of the job.

Facts About On-Grid Solar Power Systems

Know more about what an on-grid solar system is and how you can benefit from it:

  • The primary 1 kW capacity solar system can generate an average of 4 units a day, which means 120 units a month – amounting to 1,440 units throughout a year.
  • In an on-grid solar system, the components are covered under product warranties. The solar arrays mounted on your roof will have 25 years of performance warranty. Other components like the inverter and batteries will have 5-10 years of warranty, depending on the manufacturer.
  • Several solar companies also provide exhaustive maintenance services under the solar AMC package to help homeowners maintain their solar systems throughout their 25 years of lifespan.
  • The benefits of net metering will apply to this type of solar system, meaning you will be able to draw energy from and transfer energy to the local grid.
  • The MNRE allows residential solar buyers to purchase their on-grid solar system from any vendor of their choice and get a 40% subsidy on the grid-connected solar system of up to 3kW capacity.

Subsidies Offered on On-Grid Solar Systems

Eligible homeowners can get a 40% subsidy for rooftop solar installations of up to 3 kW capacity model. The subsidy rate is capped at 20% for on-grid solar system models ranging from 3 kW to 10 kW. There is no subsidy for plants of over 10 kW capacity, which is suggested for large homes with high electricity requirements.

The government of India is encouraging residential solar installations across states by offering subsidies to individual homeowners and housing societies. The solar subsidy is only applicable to grid-connected solar systems (without battery backup). Most homeowners consider the upfront prices of on-grid solar systems in India a great financial burden. However, subsidies can reduce the overall cost of your solar plant, while the rest of the cost is offset by the financial benefits of solar electricity.

Here is the typical rate of subsidy that is applicable on the benchmark cost or cost arrived through tender (whichever is lower) for RTS systems of different capacities.

System Capacity (kW) Solar Subsidy (in %)
1kW to 3kW 40%
4kW to 10kW 20%
More than 10kW No subsidy

Unlike earlier, the choice of solar vendors available for households is not limited to the channel partners of your local DISCOMs. Under the revised solar scheme issued by MNRE, individual solar buyers have the free will to select their own solar company in India and still be eligible for subsidy. Your solar company will customise an on-grid solar power system based on your power requirements and budget. To avail solar subsidy, you can apply with your local DISCOM and inform them about the details of your intended solar installation. 

Remember that both the Central Government and State Nodal Agencies (SNAs) are providing subsidy schemes for getting rooftop PV systems. As a result, the overall financial assistance might vary for you depending on the location of the solar installation. The other perks offered by the government include generation-based incentives, wherein the consumer receives some monetary incentive for each unit of electricity generated. Furthermore, the consumers can also transfer excess electricity to the government grid and receive credit per the regulated tariffs set under net metering.

FAQs about On-Grid Solar Systems

How much area do I need to install a 1 kW system?

Installing a basic 1 kW on-grid solar system requires a ten sq. metres area, getting no shadow from trees or adjacent buildings. However, the exact requirement may vary based on the efficiency of solar panels, the mounting structure, etc.

Does the area have to be shadow-free for solar module installation?

Unfortunately, yes. The solar cells within panels need unhindered and continuous sunlight to generate electricity at their peak efficiency level. Therefore, the shadow cast on even a small area on the panels will impact the on-grid system’s total capacity. Moreover, if some cells constantly receive shadow, this reduces the lifespan of your solar panels substantially, rendering them useless over time.

Is my roof suitable for installing a grid-connected solar system?

Yes. Generally, a rooftop solar plant can be easily installed on any type and size of the roof, given that the structure is strong enough to bear the weight of a solar plant. A roof assessment by your solar company will help you rule out all the major roadblocks to getting solar. 

Will my RTS generate the same amount of energy output all year round?

No. Several factors determine the daily energy production from on-grid solar systems for homes. The temperature during different weathers, solar radiance, location, and many other parameters can reduce and even increase the daily output beyond the standard range.

Will my on-grid solar power system give the same annual energy for all 25 years?

No. Your solar modules suffer degradation, and eventually, their peak generation capacity is compromised due to constant exposure to sunlight and daily wear. However, you can expect them to stay in their best condition for the maximum duration of their lifespan. Nevertheless, you can rest assured as your installer will cover your solar panels under a performance warranty.

Is maintaining an on-grid solar system for home costly?

Solar PV technology is the most suitable power generating system for homes as it’s affordable and easy to maintain. You can keep your solar plant in its best condition throughout its 25 years of lifespan with little maintenance and servicing. Your solar company should also be ablse to offer ongoing packages to take the hassle out of your system’s regular maintenance needs.

I live in a rented house. Is on-grid solar system installation beneficial for me?

Yes, renters too can go solar. Even if you don’t own the house, you can still leverage solar benefits. You can either convince your landlord to transition to solar, invest in community solar, or lease your solar plant that comes with zero or no upfront cost or maintenance hassle.

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