With the decline in the average cost per watt of the solar power system, the demand for solar installations is gradually increasing in the residential sector and people are inquiring about it.
However, there is a lack of knowledge about its financial benefits among people which is preventing them from taking a step further.
The cost is a very important factor in the success of any product.
The benefits have to be substantial enough to justify its cost.
The cost of the solar power system depends on:
Let us take the cost of 5 kW system as a reference under different configurations.
Cost of On-Grid System
We all know that an On-Grid system is connected to the grid supply but it has no battery back-up.
One can enjoy solar electricity in the daytime when sunlight is good but during night or under bad weather conditions, one has to rely on grid supply because there is no battery backup.
The on-grid system is preferable in locations with good sunlight and where grid supply is regular.
What is the use of solar electricity when the grid supply is regular?
In many metropolitan and other major cities where grid supply is regular but is very costly.
Installing the solar power system and using it in the day time can save you money and is an attractive proposition.
If you are living in such places as mentioned above then the Grid-tied system configuration is suitable for you.
The average cost of 5 kW grid-tied solar power system is around 3,10,000, making it an average price of Rs. 62 per watt
Net-Metering is another feature that can be utilized under this configuration.
In Net-Metering, you have an option to feed the extra units generated by the solar power system to the Grid and you are monetary compensated by the Grid for those extra units.
Cost of Off-Grid System
As the name suggests, the Off-Grid system is not connected to the grid-supply.
So, it depends on solar electricity and the battery backup when there is no sunlight.
This kind of system is suitable in remote locations like mountainous terrain where it is difficult to provide electricity through grid-supply.
You need a strong battery backup in this kind of configuration.
This makes the configuration costly.
The average rate of 5 kW off-grid solar power system is Rs. 4,75,000 with 2 days of battery backup, making it an average of Rs. 95 per watt.
The price will go up when your backup (days) increases.
The batteries not only increase the overall cost of the system but also require good maintenance.
It is better to keep optimum days as the battery backup.
Cost of Hybrid System
The system in this configuration is connected to the grid supply and also has a battery backup.
In this configuration, one can switch among 3 options namely Solar Electricity, Battery Backup, and Grid supply any time according to her/his convenience.
It preferred to use solar electricity during the day and in the night when the grid supply goes down, the battery backup takes the lead.
This type of configuration is suitable where Grid-supply is erratic.
One can also utilize the Net-Metering feature in this type of configuration.
The average cost of 5 kW Hybrid system with 1 day as the battery backup is 4,20,000, an average of Rs. 84 per watt.
The Cost Summary
The cost can further vary depending on the quality and the brand of the components.
The average cost per watt is summarized below:
The Average Annual Return of the System