Overview of on-grid solar systems
An on-grid solar system is also known as a grid-tied system since it is connected to the main utility grid. One of the best things about installing on-grid solar at home is the subsidy you get. The Indian govt. offers homeowners a subsidy for installing a rooftop on-grid solar system ranging between Rs. 30,000 and Rs. 78,000 (depending upon the installed system capacity).
The on-grid solar system price varies from city to city and, of course, depends on the size of the system. Let’s give you a price demonstration from two different cities to give you an idea about the on-grid solar system cost:
- 3 kW on-grid solar system price in Greater Noida with subsidy: ~ Rs. 1,25,000
- 5 kW on-grid solar system price in Chennai with subsidy: ~ Rs. 2,95,000
*Please note: The prices above are indicative as of 30th April 2025. The final on-grid solar system cost in India depends on your city, DISCOM charges, product variant opted for, panel type, system capacity, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Also, prices are subject to change without prior notice.
What is an On-grid Solar System?
An on-grid solar system (grid-tied) connects directly to the utility grid through a bi-directional meter (net meter). Most Indian homes with a reliable grid connection choose on-grid solar since this system is powerful enough to support all household energy requirements.
The on-grid solar system is a careful compilation of many components, listed below, arranged together to convert sunlight into electricity:
- Solar Panels
- A solar inverter
- Solar module mounting structures
- A bi-directional meter
- Solar accessories (AC and DC cables, AC and DC combiner boxes, conduit trays, lightning arrester, MC4 connectors) etc.
Let’s break it down further, for your easy understanding..!
What Are the On-Grid Solar System Components?
1. Solar Panels
Solar panels are the most visible part of the solar system. They’re installed on the rooftop, facing the South direction. When sunlight falls on these panels, they absorb that sunlight and convert it into electricity.
Solar electricity directly from the panels is DC power. Since homes require alternating current (AC), a solar inverter is needed to convert direct current into AC.
2. Solar Inverter
Without a solar inverter, the entire solar system would have been an impractical model. The solar inverter converts DC into AC.
This conversion is essential because that’s the only way to convert electricity generated from an on-grid solar system into a usable form (AC) that can run household appliances.
3. Solar Module Mounting Structures
These are the pillars that support solar panels. They must be of a standard grade so that they can withstand heavy winds during storms and cyclones and hold the weight of the solar panels for 25 years (that’s the life of a solar system).
The best solar module mounting structures are prefabricated in precision labs. They’re coated with hot-dip galvanizing on steel to make them rust-proof.
For instance, Prakash’s mounting structures can:
- Withstand wind speeds as high as 160 kmph
- Prevent rusting for years because they have a high-density galvanized iron (HDGI) coating of 80 microns to withstand corrosion.
4. Solar Accessories
They might not sound that important in the entire setup, but solar accessories are as important as a panel, an inverter, or a mounting structure. Let’s see how:
- AC and DC cables: They are required for wiring solar panels and connecting different parts to make the entire solar grid functional.
- DC combiner boxes: A DC combiner box works like an isolation box. All the cables carrying DC current from the panels are isolated in this box. DC power coming from the panels can be as high as 1,000 volts, even more. It’s dangerous (potentially lethal); hence, a DC combiner box is required. This box feeds the DC current into the solar inverter and the solar inverter produces alternating current.
- AC combiner boxes: The AC power from the solar inverter is fed into an AC combiner box (all cables carrying the AC current from multiple inverters are combined in this box).
- Earthing strips and wires: Once the entire on-grid solar system is set up, earthing is done using earthing strips and wires.
Please note : all the DC cable connections are made using MC4 connectors only.
5. Bi-directional Meter
Also known as a net meter, the bi-directional meter is basically designed to keep a track of:
- Electricity supplied to the grid
- Electricity imported from the grid
An on-grid solar system will not become functional until and unless the regular meter is replaced with a bidirectional meter. The net meter helps the discom track the power generated by the solar system, the power consumed, the power supplied to the grid, and the power imported.
At the end of every month, when the electricity bill is generated, the readings from the bidirectional meter give an account of:
- How many units were supplied to the grid
- How many units were taken from the grid
Here’s how this solar net metering process helps:
- If you supply more units to the grid than you consumed, those units will be deducted from your bill. It will reduce the bill further.
- If you use extra units from the grid in addition to what your solar plant generated, those units would be added to your bill.
How Does an On-grid Solar System Work?
Let us see how an on-grid solar system works and converts the sunlight into electricity:
- Solar Energy Capture and DC Power Generation: Solar panels, composed of photovoltaic (PV) cells, absorb photons from sunlight and free electrons within the cell’s semiconductor material. This movement of electrons generates a direct current (DC). The total DC output depends on factors such as panel efficiency, sunlight intensity, and shading. Needless to say, higher irradiance yields more current.
- DC-to-AC Conversion via the Solar Inverter: The inverter is the heart of your solar system. It takes the panel-generated DC and inverts it into alternating current (AC), matching the frequency (50 Hz in India) and voltage of the local grid. Modern inverters also perform maximum power point tracking (MPPT) to continually adjust voltage/current inputs, extracting the highest possible power from your panels.
- Bidirectional Meter Integration Once converted to grid-compliant AC, the electricity flows through a bi-directional (net) meter. This meter precisely records both incoming units drawn from the grid and outgoing units exported from your solar system, ensuring you’re billed only for the net energy you consume.
- Household Consumption of Solar-Generated AC: During the day, your home’s appliances, such as lights, fans, fridges, air conditioners, and electronics, draw AC power directly from the inverter output. Because solar power is typically the first source used, it reduces or altogether replaces the need to import electricity from the grid.
- Exporting Excess Solar Power: If your panels produce more electricity than your household consumes at any moment, the surplus AC automatically travels back through the bi-directional meter into the grid. Your meter records these exported units, which may earn you financial credit or feed-in benefits under your local net-metering policy.
- Importing Grid Power When Needed: After sunset or during low-sunlight periods when it’s cloudy, the bi-directional meter switches to import mode if your solar output drops below your home’s demand. It draws the shortfall from the grid, using up any previously accrued credits first, so your appliances continue running seamlessly without interruption.
Solar Subsidy For On-grid System
The Indian government offers a subsidy when you install an on-grid solar system for home. This subsidy remains the same for all states in India.
Here are the subsidy breakdown details:
| Solar System Size | Solar Subsidy Offered Under PM Surya Ghar Muft Bijli Yojana |
|---|---|
| 1 kWp | Rs. 30,000 |
| 2 kWp | Rs. 60,000 |
| 3 kWp and higher | Rs. 78,000 |
Please note : The subsidy is capped at Rs. 78,000 for on-grid rooftop solar systems that are 3 kWp or higher.
The state government of UP offers an additional subsidy to homeowners on top of the subsidy provided by the central government. Here are the state subsidy details for UP homeowners:
- State subsidy for 1-2 kW solar systems: Rs. 15,000/ kW
- State subsidy for systems >=2 kW: Rs. 30,000
Based on the details above, here’s a breakdown of the on-grid solar system subsidy for different capacity solar systems:
| On-grid Solar System Size | On-grid Solar System Subsidy in All States Except UP | Total On-grid Solar System Subsidy in UP |
|---|---|---|
| 1 kWp | Rs. 30,000 | Rs. 30,000 + Rs. 15,000 = Rs. 45,000 |
| 2 kWp | Rs. 60,000 | Rs. 60,000 + Rs. 30,000 = Rs. 90,000 |
| 3 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 4 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 5 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 10 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
On-Grid Solar System Price in India in 2025
The solar system price in India is not fixed. It changes based on multiple factors, including:
- Your city
- Solar system size
- DISCOM charges
- Product variant opted for
- Panel type
- Inverter type
- Mounting structure height
- Type of after-sales service
- Savings guarantee
- Roof height
What’s the ROI On On-grid Solar Panel Installation?
The return on investment depends on a lot of factors, including:
- The type of solar panels and the inverter you chose
- The amount of sunlight your house receives
Let’s give you an example of ROI on installing a 3 kW on-grid solar system in Nagpur.
Here are a few factors we’ve considered:
- The electricity tariff in your city is Rs. 8.50 per unit
- The electricity rates increase by 2-4% every year
- The annual degradation rate of a well-maintained solar system is 1%
Based on the factors listed above, you will save ~ Rs. 12.75 lakhs in 25 years by installing a 3 kW system that costs ~ Rs. 1,25,000* in Lucknow to ~ Rs. 1,60,000* in Chennai today. The initial investment cost will break even in 3-5 years, after which you’ll benefit from free electricity throughout your system’s life.
*Please note : These prices are indicative as of 30th April 2025. The actual final on-grid solar system cost depends on your city, DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc.
Advantages and Disadvantages of On-Grid Solar System
Installing solar at home comes with a unique set of advantages (and a few limitations). Let’s get started with the many benefits you’ll reap by installing a rooftop on-grid solar system at home:
- Energy Production Monitoring: It’s easy to keep a track of the units of electricity that your solar system generated
- Simplified Solar Billing: It’s easier to understand the solar electricity bill
- Rapid Payback & Decades of Free Power: Once the solar on-grid system’s price breaks even in 3 to 5 years, you get free solar electricity for the next 20-22 years
- Significant Monthly Savings: The monthly electricity bill reduces substantially
- There’s no Battery Requirement: Your grid plays the role of the battery. The system will directly supply excess units to the grid and take them back when needed
- No Battery Replacement Costs: Since there’s no battery, there are no battery replacement charges involved
- Most Affordable Solar Option: Out of the 3 types of solar systems, the on-grid solar system for homes is the most affordable option
- Exclusive Solar Subsidy: The government offers a subsidy only on an on-grid solar system for residential homes (that use DCR panels)
We have learn about the advantages, let’s also talk about the limitation of installing on-grid solar: power outages:
Although connection with the grid is a sure benefit, it’s also a limitation. When there’s a power cut from the grid, the on-grid solar system automatically shuts down. This interruption in the supply of power is known as a power outage.
The main reason an on-grid solar inverter is designed to automatically shut down if the grid fails is to eliminate safety risks. This particular feature that differentiates on-grid inverters from all other types is called Anti-Islanding Protection.
- During power outages, an on-grid inverter will stop generating AC power immediately.
- Otherwise, the electrical maintenance personnel working directly with the wiring at the location of the electrical fault may suffer from electric shocks.
So, which is better: off-grid or on-grid solar systems?
Hands down, on-grid solar systems in urban areas with a reliable grid are unbeatable for meeting a home’s power requirements.
- You don’t have to worry about costs related to battery upkeep
- It’s more affordable than an off-grid solar system
- The government offers a subsidy on on-grid systems, not off-grid systems
So, if your power grid is reliable, investing money in an on-grid solar system is the smarter choice!
How to Install an On-Grid Solar System at Home?
Installing rooftop solar is not a DIY task. It must be carried out by the experts because it’s critical to:
- Identify whether or not your rooftop can support the weight of a solar system
- Determine there’s enough shadow-free area on your roof that’ll maximize your ROI
- Set the tilt angle and panel direction that’ll expose your solar panels to maximum sunlight
- Carry out the installation safely with the right protective gear
None of the above mentioned factors can be executed to perfection if you do it yourself, and all these factors impact the final power generation.
Here are the simple steps Prakash’s professionals follow to install an on-grid solar system at your home:
- Step 1: Rooftop inspection and Site Assessment: A trained engineer surveys your rooftop to map shadow-casting objects and determine the optimal panel orientation (usually south in India) and tilt angle (approximately equal to your latitude). This analysis maximizes sunlight exposure and long-term energy yield.
- Step 2: Roof Mounting and Panel Clamping: Mounting structures are securely fixed to your roof using corrosion-protected rails and fasteners. Panels are then clamped onto these rails, following the manufacturer’s torque specifications to prevent damage.
- Step 3: Inverter Installation & Electrical Wiring: Solar strings (series-connected panels) are routed to the DC combiner box, then to the inverter, which converts DC into grid-compatible AC. AC output is channeled through an AC combiner box to your bi-directional meter, with all cables protected in conduit or trays.
- Step 4: Earthing & Lightning Protection: Dedicated earthing rods and cables bond both DC and AC components to the ground, safeguarding against electrical faults. A lightning arrester mounted above the panels intercepts strikes and diverts surge energy safely to the earthing grid.
- Step 5: System Commissioning & Monitoring Setup: Technicians verify string voltages, phase sequence, and inverter settings before energizing the system. Finally, the inverter is linked to your Wi-Fi for real-time performance monitoring, ensuring any issues are spotted and resolved by Prakash’s team promptly.
Why Choose Prakash as Your Solar Company?
Here are a few reasons that make Prakash India’s most-trusted solar rooftop company:
- Zero-investment Solar Scheme: We offer homeowners easy loans and financing options where your government subsidy offsets the initial down payment. So, you’re starting from Rs. 0 out of your own pocket. You can choose an EMI schedule from 3 to 60 months, aligning payments with your budget and monthly cash flow.
- Swift Installation: There’s no middleman involved. The entire process to set up your solar system will be executed by our team in 8 hours.
- Solid After-sales Support: We offer a minimum of 45 maintenance visits over 5 years for deep cleaning and preventive checks.
Conclusion
Installing an on-grid solar system is a big decision, and it’s your right to be critical about it. When you choose the right quality components, a system you install today can last for at least 25 years.
The solar panel installation cost in India varies from city to city, and you should trust a company that’s highly rated by customers.
Moreover, the Indian government is offering homeowners a subsidy to install on-grid solar panels. This subsidy will be offered only till the government meets its target of solarizing 1 crore homes under the PM Surya Ghar Muft Bijli Yojana. So, why the wait now? Go solar and get freedom from paying for electricity now!
FAQs
Q. Does on-grid solar need a battery?
Q. Do solar panels work at night?
Q. What is the difference between on-grid and hybrid solar systems?
Q. What is the on-grid solar panel price in India?