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A simple formula, the right inputs and a fully worked 3 kW example so that you can test any quote yourself.
Image: Euro Changeover Board of Ireland calculator 1 by ZICO, CC BY-SA 4.0, via Wikimedia Commons.
The most useful number in any solar quote is the payback period, and the easiest to inflate. A sound installer shows the arithmetic and lets you verify it. This guide gives you the formula, the inputs that matter in solar in Raipur, a fully worked example and the traps that make a quote look better than the reality.
Quick answer: payback equals net cost after subsidy divided by annual saving. For a 3 kW home in Raipur, that is typically about three to four years, and the system keeps producing for 25 years.
Simple payback (years) = Net cost after subsidy / Annual saving.
In Raipur, one kilowatt of well-installed capacity produces about 1,400 to 1,500 units a year. For a 3 kW system, that is about 4,200 to 4,500 units, or 350 to 375 a month on average.
The unit price is not a single number. Domestic tariffs rise by slab, so the units you offset are the most expensive ones at the top of your consumption. Your twelve-month bills show how much you pay in total, and your installer can calculate the average value per unit you avoid. A rough check is to divide your monthly bill by your monthly units and treat the result as the average rate, remembering that the true marginal rate is higher.
The central subsidy is Rs 78,000 for 3 kW and above. Chhattisgarh has announced a state top-up for domestic consumers, reported at up to Rs 30,000 for 3 kW and above; confirm the current order. Use only the amounts you are sure of when you calculate.
| Input | Low case | High case |
|---|---|---|
| System price (3 kW, tier-1) | Rs 1,65,000 | Rs 1,90,000 |
| Central subsidy | Rs 78,000 | Rs 78,000 |
| Net cost | Rs 87,000 | Rs 1,12,000 |
| Annual generation | 4,200 units | 4,500 units |
| Average value of units saved | Rs 7 per unit | Rs 8 per unit |
| Annual saving | Rs 29,400 | Rs 36,000 |
| Simple payback | About 3.8 years (Rs 1,12,000 / 29,400) | About 2.4 years (Rs 87,000 / 36,000) |
The range of roughly 2.4 to 3.8 years is consistent with the three to four years quoted across our guides. If the state top-up applies, the net cost falls further and payback shortens again.
| Item | Typical treatment |
|---|---|
| Inverter replacement | One replacement in 25 years, perhaps Rs 25,000 - 40,000 at today's prices |
| Cleaning and maintenance | Small annual cost, or your own time |
| Panel degradation | Allow a small yearly decline in output |
| Tariff increases | Raise the saving over time, or ignore for a conservative estimate |
| Inflation of costs | Adjust if you want a real-terms result |
After allowing for inverter replacement and degradation, a 3 kW system in Raipur still returns several times its net cost over 25 years even if tariffs never rise. Our solar savings guide shows the 25-year arithmetic.
Households in higher slabs save more per unit and see shorter paybacks. A household using 150 units a month has a lower average rate and a longer payback than one using 500 units. Commercial users pay higher tariffs and often see paybacks around four to five years even without a subsidy. If your installer assumes one flat rate, ask how it compares with your actual bill.
Payback tells you when you break even. Return on investment, expressed as an annual percentage of net cost, tells you how well money works over time. A 3 kW system with a net cost of Rs 1.0 lakh and an annual saving of Rs 33,000 returns about 33 per cent a year on the simple measure, before allowing for degradation and inverter replacement. Lifetime saving, which adds up the whole 25 years, is the figure that shows the scale of the benefit.
For a business, the effective cost of the plant is lower than the sticker price if accelerated depreciation applies, because it reduces taxable income in the early years. The size of the benefit depends on the depreciation rate, your tax rate and the year of purchase, so ask your accountant for the figure. As an illustration, if a business pays Rs 8 lakh for a 15 kW plant, claims depreciation at 40 per cent in year one and is taxed at about 25 per cent, the first-year tax saving is about Rs 80,000. That brings the effective net cost down and shortens payback by several months. Always confirm current rules with a qualified professional.
| Change | Effect on payback |
|---|---|
| Tariff rises 5% a year | Payback shortens, since each unit saved is worth more |
| Generation 10% below estimate (shade, dust) | Payback lengthens by roughly 10% |
| Cost 10% higher | Payback lengthens by a similar percentage |
| State top-up applies | Net cost falls and payback shortens |
| Inverter replaced in year 12 | Lifetime return slightly lower, simple payback unchanged |
Run these scenarios on your own figures. If a system still pays back in under five years on pessimistic assumptions, it is a robust investment.
| Line | Your figure |
|---|---|
| System price including GST | Rs ______ |
| Subsidy you are certain to receive | Rs ______ |
| Net cost | Rs ______ |
| Annual generation (kW x 1,450) | ______ units |
| Average value per unit saved | Rs ______ |
| Annual saving | Rs ______ |
| Simple payback (net cost / annual saving) | ______ years |
Fill it in for every quote you hold. It takes ten minutes and it forces each installer's numbers into a common frame. If an installer's own payback figure is much shorter than yours, ask which assumption differs. Often it is the unit value or the generation estimate, and discussing it is how you find out whether the quote is realistic.
Use this formula on the quotes you hold. Read solar in Raipur for cost and savings, ask a solar company in Raipur to show its assumptions, and check PM Surya Ghar Yojana in Raipur for subsidy slabs. Our rooftop solar installation in Raipur team shows all inputs in writing, and the best solar installer in Raipur checklist adds the other questions. For the state context, read solar in Chhattisgarh, how to choose a solar company in Chhattisgarh, PM Surya Ghar Yojana in Chhattisgarh, the steps for solar subsidy apply online in Chhattisgarh and what rooftop solar installation in Chhattisgarh involves.
For a home system with the central subsidy, about three to four years is typical. With a state top-up it can be shorter, and for businesses with depreciation it is often around four to five years.
Divide the net cost after subsidy by the annual saving. For a 3 kW system with a net cost of Rs 1.0 lakh and an annual saving of Rs 33,000, payback is about three years.
A simple payback does not. A fuller calculation adds the cost of replacing the inverter once in 25 years and routine maintenance.
Yes. If tariffs rise, each unit you avoid becomes more valuable, so actual payback is usually shorter than a calculation at today's tariff.
Panels degrade slowly, typically a fraction of a percent per year, and warranties guarantee a minimum output after 25 years. Include a small degradation allowance in a long-term calculation.
Send us twelve months of bills and we will return a net cost, annual saving and payback with every assumption shown. Visit C-29, Sector 3, Devendra Nagar, Raipur, Chhattisgarh 492001, call 083051 31420 or request your calculation.
Looking for the best solar company in Raipur? See how solar in Raipur works, check the solar Raipur locality guide and book solar installation in Raipur with a trusted solar company in Raipur. Our checklist for the best solar company in Raipur shows what to ask. Browse every article on the solar blog, or see PM Surya Ghar Yojana in Raipur and our solar services.
Every input and assumption written down, from a Raipur solar team that shows its arithmetic.