Introduction
Every solar investment — whether a 5 kW home rooftop system or a 1 MW industrial plant — is ultimately judged by one number: ROI (Return on Investment).
Understanding how to calculate ROI helps you estimate the payback period, forecast savings, and make confident investment decisions.
At EKA Synergy Solar, we simplify this process for clients across India using energy yield simulations, real-time cost modeling, and detailed financial analysis.
In this blog, you’ll learn how to calculate ROI for residential, commercial, and industrial solar EPC projects, and what factors truly drive long-term profitability.
1. What Is ROI in a Solar EPC Project?
ROI = (Net Savings / Investment Cost) × 100
Breakdown:
- Investment Cost: Includes system design, modules, inverters, structures, cables, installation, and GST.
- Net Savings: Annual electricity bill savings + export income (net metering) – annual O&M cost.
Example:
If your 50 kW system costs ₹25 lakh and saves ₹5 lakh annually:
ROI = (5 / 25) × 100 = 20% per year
Payback Period = 25 ÷ 5 = 5 years
2. ROI for Residential Solar Projects
- System Size: 3–10 kW
- Avg. Cost (post-subsidy): ₹60,000–₹70,000/kW
- Generation: 4–5 units/kW/day
- Tariff Rate: ₹6–₹8/unit
Example – 5 kW Rooftop System
| Parameter | Value |
|---|---|
| System Cost | ₹3,25,000 (after subsidy) |
| Annual Generation | ≈ 8,200 units |
| Annual Savings | ₹57,400 |
| ROI | 17.6% per year |
| Payback Period | ~5.5 years |
With a lifespan of 25 years, residential systems offer free power for nearly 20 years post-payback.
3. ROI for Commercial Solar Projects
- System Size: 20–200 kW
- Avg. Cost: ₹50,000–₹55,000/kW
- Tariff Rate: ₹8–₹10/unit
- O&M: 1–1.5% of project cost annually
Example – 100 kW System
| Parameter | Value |
|---|---|
| System Cost | ₹52 lakh |
| Annual Generation | ≈ 1.64 lakh units |
| Annual Savings | ₹14.76 lakh |
| O&M Cost | ₹52,000 |
| Net Savings | ₹14.24 lakh |
| ROI | 27.4% per year |
| Payback Period | ~3.8 years |
Commercial clients enjoy ROI up to 30%, making solar a strong mid-term investment.
4. ROI for Industrial Solar Projects
- System Size: 250 kW – 2 MW+
- Avg. Cost: ₹45,000–₹50,000/kW
- Tariff Rate: ₹9–₹12/unit
- Accelerated Depreciation: 40% under Income Tax Act
Example – 1 MW Plant
| Parameter | Value |
|---|---|
| System Cost | ₹4.8 crore |
| Annual Generation | ≈ 16.8 lakh units |
| Annual Savings | ₹1.68 crore |
| O&M Cost | ₹4.8 lakh |
| Net Savings | ₹1.63 crore |
| ROI | 34% per year |
| Payback Period | ~3 years |
Industries benefit from economies of scale, high tariffs, and tax incentives, often achieving ROI above 30%.
5. Key Factors That Affect Solar ROI
| Factor | Impact on ROI |
|---|---|
| Solar Irradiation | More sunlight = higher output |
| Component Quality | Tier-1 panels/inverters improve efficiency |
| System Design | Optimal tilt and spacing boost yield |
| Electricity Tariff | Higher grid rates = faster savings |
| Subsidy & Tax Benefits | Reduce upfront cost, increase returns |
| Operation & Maintenance | Keeps performance ratio above 90% |
EKA Synergy Solar simulates all of these variables to forecast ROI accurately before project execution.
6. Adjusted ROI: Including Subsidy and Depreciation
Effective ROI = ((Annual Savings + Tax Benefit + Subsidy) / Net Investment) × 100
Example:
| Detail | Value |
|---|---|
| Gross Investment | ₹5 crore |
| Subsidy | ₹60 lakh |
| Year-1 Tax Benefit (Dep.) | ₹80 lakh |
| Net Investment | ₹3.6 crore |
| Annual Savings | ₹1.6 crore |
| Adjusted ROI | 44% per year |
Subsidies and tax savings can boost ROI by 30–50%, especially in large-scale projects.
7. Tools & Analytics Used by EKA Synergy Solar
| Tool | Function |
|---|---|
| PVSyst & Helioscope | Simulate energy yield |
| IoT Monitoring | Real-time performance visibility |
| ROI Dashboards | Cash flow and payback forecasting |
| EPC Analytics Suite | Track PR, performance, and ROI |
Our clients have full ROI visibility — from design to post-installation — thanks to EKA’s integrated tech stack.