Introduction: What Is an On Grid Solar System?
In today’s world of rising electricity costs and increasing environmental awareness, homeowners and businesses alike are turning toward solar energy as a smart and sustainable solution. One of the most popular and cost-effective choices is the on grid solar system—a setup directly connected to your local electricity grid.
Unlike off-grid systems that rely entirely on battery storage, an on grid solar system allows you to generate your own electricity, use what you need, and send the surplus back to the grid. In return, you receive credits through a process called net metering, significantly reducing your monthly electricity bill.
As India moves aggressively toward its solar adoption goals, on-grid systems have emerged as the most widely adopted model, especially in urban and semi-urban regions. From residential homes in Surat, Ahmedabad, and Pune, to commercial buildings and educational institutions—on-grid solar is powering the clean energy movement across the country.
But how does it actually work? What are the real savings? And is it the right fit for your energy needs?
This detailed guide will walk you through everything you need to know about the on grid solar system—how it functions, what it costs, benefits, and why it’s the first choice for most solar adopters in India.
Table of Contents
How On-Grid Solar Systems Work: Components & Process
An on grid solar system works in sync with your local electricity grid. It’s the most efficient and commonly used solar system in India, especially for homes and businesses that have access to continuous power supply.
Let’s understand how it works step-by-step and what components make it function seamlessly.
Main Components of an On-Grid Solar System:
- Solar Panels
These are installed on your rooftop and capture sunlight, converting it into Direct Current (DC) electricity. - Solar Inverter (On-Grid Inverter)
The DC power generated by the panels is converted into Alternating Current (AC) by the inverter so it can be used to run household or commercial appliances. - Bi-Directional (Net) Meter
This special meter tracks both the electricity you consume from the grid and the excess electricity your solar system sends back. This process is known as net metering. - Main Grid Connection
Your system is synced with the DISCOM (electricity board) grid, so you can import and export power based on your consumption and generation levels.
How the On-Grid Solar Process Works
- During the day, when your system generates more power than you consume, the excess electricity is sent back to the grid.
- At night or during low sunlight, you can draw power from the grid as usual.
- The net meter calculates your final bill after adjusting for the power you exported vs. imported.
Key Benefit: You only pay for the net electricity consumed from the grid—this could be almost zero if your system is well-sized.
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Benefits of On-Grid Solar System for Indian Homes & Businesses
Installing an on grid solar system is more than just an environmental decision—it’s a smart financial investment that pays back over time. Whether you’re a homeowner in Pune or a factory owner in Surat, this type of solar setup offers unmatched benefits in terms of cost-efficiency, scalability, and reliability.
Here are the top benefits that make on grid solar systems the most widely adopted model across India:
1. Significant Cost Savings on Electricity Bills
The primary advantage of an on-grid solar system is the drastic reduction in electricity bills. By generating your own power and using the net metering system to export excess energy back to the grid, users often witness a 40%–90% cut in their monthly energy costs.
2. Zero Battery Maintenance
Unlike off-grid or hybrid systems, on-grid systems do not require batteries, which are expensive and have recurring replacement costs. This makes your overall solar investment more economical and maintenance-free in the long run.
3. Eco-Friendly Power Source
Since solar panels produce clean and green energy, switching to an on-grid system can reduce your carbon footprint significantly. A typical 5 kW on-grid system can offset nearly 6 tons of CO₂ emissions every year.
4. Best for Urban & Commercial Setups
On-grid solar systems are ideal for areas with stable electricity supply—making them perfect for cities like Mumbai, Surat, Bangalore, and Ahmedabad. Businesses, housing societies, schools, and factories can all benefit from customized on-grid solutions.
5. Easy Government Subsidy Eligibility
Under the PM Surya Ghar Yojana and other MNRE programs, only on grid solar systems are eligible for residential subsidies. This can reduce your installation cost by ₹30,000–₹78,000 or more.
Cost Breakdown of On-Grid Solar Systems in India
One of the most common questions people ask when considering an on grid solar system is: How much does it cost? The answer depends on the system size, location, panel brand, and installation complexity. But don’t worry—we’ve simplified it for you with an easy-to-follow price chart and explanations.
Below is a general price estimate for standard on-grid systems in India:
On-Grid Solar System Price in India (2025)
| System Size | Approx. Price Range (INR) | Area Required | Avg Monthly Saving |
|---|---|---|---|
| 1 kW | ₹60,000 – ₹75,000 | 100 sq.ft | ₹1,000 – ₹1,500 |
| 2 kW | ₹1,10,000 – ₹1,40,000 | 200 sq.ft | ₹2,000 – ₹3,000 |
| 3 kW | ₹1,60,000 – ₹1,95,000 | 300 sq.ft | ₹3,000 – ₹4,500 |
| 4 kW | ₹2,20,000 – ₹2,60,000 | 400 sq.ft | ₹4,000 – ₹6,000 |
| 5 kW | ₹2,75,000 – ₹3,25,000 | 500 sq.ft | ₹5,000 – ₹7,500 |
| 10 kW | ₹5,50,000 – ₹6,50,000 | 1000 sq.ft | ₹10,000 – ₹15,000 |
Note: These are indicative prices that include panels, inverter, structure, wiring, and installation. Battery cost is not included, as on grid solar systems don’t need batteries.
State-wise Variation in Cost
Prices can also vary depending on your city or state due to local vendor charges, net metering setup, and DISCOM policies:
- Delhi: Slightly higher due to regulatory approvals
- Pune & Mumbai: Competitive due to market saturation
- Ahmedabad, Rajkot, Surat: Lower due to strong local manufacturing presence
- Bangalore: Moderate, with faster net metering processing
- Chennai & Hyderabad: Subsidy approval times may vary
Internal Links to Help You Compare Prices:
- Explore 4 kW pricing here → 4 kW Solar Panel Price in India
- Looking for solar in Pune? → Solar Company in Pune
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On-Grid vs Off-Grid vs Hybrid Solar Systems – What’s the Difference?
When investing in solar, it’s essential to choose the right system based on your energy needs and grid availability. While the on grid solar system remains the most popular option in urban India, other configurations like off-grid and hybrid systems are suitable in specific scenarios.
Let’s explore how they differ and which one is best suited for your use case:
On-Grid vs Off-Grid vs Hybrid Solar Systems
| Feature | On-Grid System | Off-Grid System | Hybrid System |
|---|---|---|---|
| Grid Connection | ✅ Yes | ❌ No | ✅ Yes |
| Battery Required | ❌ No | ✅ Yes | ✅ Yes |
| Cost | 💰 Lower | 💰💰 Higher | 💰💰💰 Highest |
| Government Subsidy Eligible | ✅ Yes | ❌ No | ✅ Partial |
| Power Backup | ❌ No | ✅ Full Backup | ✅ Limited + Grid |
| Ideal For | Cities with stable grid | Remote areas with no grid | Areas with frequent power cuts |
| Net Metering | ✅ Yes | ❌ No | ✅ Yes |
| Maintenance Cost | 💸 Low | 💸💸 Higher | 💸💸 Moderate |
Key Takeaways
- An on grid solar system is perfect for cities and towns with stable grid electricity. It’s the most cost-effective, subsidy-friendly, and low-maintenance option.
- Off-grid systems are ideal for rural or remote areas where electricity access is limited or unreliable. However, battery storage increases the cost significantly.
- Hybrid systems offer the best of both worlds but at a premium. These are suitable for homes or businesses looking for energy security with grid interaction.
For most Indian households and commercial setups, the on grid solar system provides the best balance of affordability, efficiency, and long-term savings.
Who Should Opt for an On-Grid Solar System?
An on grid solar system isn’t a one-size-fits-all solution—it’s best suited for specific users who have access to stable grid electricity and want to reduce their monthly energy costs without investing in batteries.
Let’s explore who benefits the most from installing an on-grid system:
Residential Homeowners in Urban Areas
If you live in a city like Pune, Surat, Mumbai, or Ahmedabad, and your home has regular grid power, an on-grid system is ideal for you.
- No need for battery storage
- Eligible for up to ₹78,000 in government subsidy
- Monthly savings of ₹2,000–₹7,000 depending on system size
- Faster ROI — typically recovered within 4–5 years
- Great for villas, apartments, and societies with common rooftop access
Example: A 3 BHK home with a monthly bill of ₹4,500 can save nearly ₹50,000–₹60,000 annually with a 4–5 kW on grid solar system.
Small and Medium Businesses (SMBs)
Cafés, offices, schools, clinics, and retail shops can drastically lower operating expenses by adopting solar.
- Reliable daytime power for operations
- Net metering helps offset weekend/holiday power generation
- Tax benefits + depreciation for business owners
- Enhances brand reputation as a green business
Commercial & Industrial Units with Daytime Usage
Factories, warehouses, cold storage units, and textile mills operating mainly during the day see:
- Massive savings on bulk consumption
- Reduced grid dependency
- Payback periods as low as 3 years
For large consumers, solar is a scalable and cost-efficient energy strategy.
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Government Subsidy for On-Grid Solar Systems in India (2025)
To promote clean and renewable energy, the Government of India has introduced attractive subsidies that make owning an on grid solar system more affordable than ever. These subsidies are primarily available under the PM Surya Ghar: Muft Bijli Yojana and administered by the Ministry of New and Renewable Energy (MNRE).
If you’re planning to install a residential on-grid system, you could save up to ₹78,000 or more on your overall system cost.
Subsidy Slab (Updated for 2025)
| System Size | Subsidy Amount (₹) |
|---|---|
| Up to 2 kW | ₹18,000 per kW |
| 2–3 kW | ₹18,000 for 1st 2 kW + ₹9,000 for next 1 kW |
| Above 3 kW (Up to 10kW) | Flat ₹78,000 |
| Above 10 kW | ₹78,000 (Max cap) |
Who Is Eligible?
- Indian homeowners installing grid-connected rooftop solar
- The installation must follow DISCOM net-metering protocols
- Vendor must be MNRE-authorized
- Applicant must have valid property documents and consumer number
How to Apply for Subsidy (Step-by-Step)
- Visit the national portal: pmsuryaghar.gov.in
- Register with your electricity consumer number and DISCOM
- Choose an empanelled vendor and get a quote
- Install the system and apply for net metering
- Upload installation photos, invoice, and bank details
- Get the subsidy amount credited directly to your account
Step 1: Site Survey & Feasibility Check
Our experts visit your property to assess:
- Rooftop size and orientation
- Shadow-free zones
- Load capacity and electrical layout
- Grid connectivity and DISCOM requirements
This ensures your on grid solar system is optimally designed for your energy consumption pattern and space.
Step 2: Customized System Design & Quotation
You receive a tailored proposal including:
- Panel type and system size (e.g., 2kW, 3kW, 5kW)
- Estimated generation and ROI
- Solar panel price, inverter type, and BOS (Balance of System) components
- Timeline and government subsidy eligibility
Step 3: Documentation & Approvals
We take care of all the paperwork:
- DISCOM application for net metering
- MNRE subsidy application (via PM Surya Ghar portal)
- KYC, property ID, electrical layout approvals.
Step 4: Installation & Commissioning
- Solar panels are installed on mounting structures
- Inverter, junction boxes, and wiring are set up
- Final grid synchronization is tested
- Bi-directional net meter is installed
Once everything is tested, your system is officially commissioned!
🌞 Step 5: Start Generating & Saving
- Your on grid solar system starts generating power from Day 1
- Surplus energy goes back to the grid
- Net meter tracks inflow/outflow, reducing your bill
Bonus: Solar Ace offers a 5-year Annual Maintenance Contract (AMC), including regular cleaning, inspections, and system health checks.
FAQs About On Grid Solar Systems in India
What is an on grid solar system?
An on grid solar system is a solar energy setup that is directly connected to the main electricity grid. It allows users to consume solar power during the day and export excess electricity back to the grid through net metering. These systems do not require batteries and are ideal for urban homes and businesses with stable grid access.
Is subsidy available for on grid solar systems in India?
Yes. The Indian government offers subsidies under the PM Surya Ghar Yojana for residential users installing on grid solar systems. Homeowners can get up to ₹78,000 in financial support depending on system size, provided they use MNRE-authorized vendors and comply with DISCOM guidelines.
What happens if my solar panels generate more power than I use?
The extra electricity is sent back to the grid via your bi-directional meter. This exported energy earns you credits that are adjusted in your electricity bill, significantly reducing your monthly expenses.
How long does it take to install an on grid solar system?
Typically, the installation and commissioning process takes 7–15 days, including site survey, DISCOM approvals, installation, and net meter setup. Solar Ace ensures all steps are handled professionally and promptly.
Can I use an on grid solar system during a power cut?
No. Since on-grid systems are dependent on the main electricity grid, they automatically shut off during a power outage for safety reasons. If you need backup during blackouts, consider a hybrid solar system instead.
Is an on grid solar system worth it for small homes?
Absolutely. Even a 2 kW or 3 kW on grid solar system can bring 60%–80% savings on electricity bills. With subsidies and low maintenance, the ROI is achieved in 4–5 years.
Final Thoughts – Why On-Grid is the Best Solar Option in 2025
If you’re looking for a solar system that’s affordable, low-maintenance, and delivers fast returns, the on grid solar system is your best bet in 2025.
Whether you live in a metro like Delhi, Pune, or Mumbai, or run a business in Surat or Rajkot, this system offers the perfect balance of cost savings and energy efficiency. It integrates with the grid, reduces your dependency on traditional electricity, and lets you earn credits through net metering for every extra unit you generate.
