Solar energy adoption in India is accelerating rapidly, driven by rising electricity bills and growing demand for clean, sustainable energy. Electricity costs have steadily increased across many states over the past decade, prompting households and businesses to seek long-term ways to lower expenses. An on-grid solar system effectively addresses this by generating electricity from sunlight and reducing dependence on utility providers.
At the same time, India is emerging as one of the world’s fastest-growing clean energy markets. Growing awareness of climate change, coupled with strong government policies and incentives targeting 500 GW of non-fossil fuel capacity by 2030, is encouraging more people to embrace renewable energy sources.
If you’re exploring solar energy for your home or property, this guide will help you understand the most popular system in India today the on-grid solar system. This blog covers:
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How an on-grid solar system functions in everyday Indian settings
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The key components: solar panels, inverters, meters, and more
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Current pricing and government subsidies available to homeowners
Each section is designed to offer clear, expert insights backed by real-world experience so you can make informed decisions with confidence. Not sure whether an on-grid or off-grid system is right for you? Compare on-grid vs off-grid solar systems to find the best fit for your energy needs and location.
What is an On-Grid Solar System?
An on-grid solar system, also known as a grid-tied or grid-connected solar system, is directly linked to the public electricity grid. It generates electricity using solar panels and supplies it to your home in real time. When the solar system produces more electricity than needed, the excess power is exported to the grid. When solar production is insufficient (such as at night), electricity is imported from the grid.
This type of solar system functions only when the main utility power is available. For safety reasons, it automatically shuts down during a grid outage unless paired with a battery backup and hybrid inverter.
Because of its simplicity, cost-effectiveness, and compatibility with India’s net metering policies, on-grid systems are the most commonly installed solar solutions for residential and commercial properties in urban areas.
On-Grid vs Off-Grid: A Quick Summary
| Feature | On-Grid System | Off-Grid System |
| Grid Connection | Connected to the electricity grid | Completely independent |
| Battery Required | No | Yes |
| Power Backup | Not available unless hybrid is used | Available through battery storage |
| Best For | Homes with stable electricity supply | Remote areas with unreliable or no grid |
| Cost | Lower upfront cost | Higher due to batteries and controllers |
An on-grid solar system is ideal for homes and buildings that have consistent access to the electricity grid. It is more affordable than off-grid systems since it does not require batteries and takes advantage of net metering, allowing users to earn credits for the excess energy they supply back to the grid.
By choosing an on-grid system, homeowners can significantly lower their electricity bills while contributing to a cleaner energy future making it a practical and sustainable investment.
Components of an On-Grid Solar System
An on-grid solar system is made up of carefully integrated components that work together to generate, convert, distribute, and track electricity. Each part plays a critical role in ensuring the system runs efficiently and safely.
Understanding these components helps homeowners make informed choices and ensures better maintenance and performance from their rooftop solar setup.
Core Hardware
These are the essential components required in every on-grid solar installation:
- Solar Panels (Monocrystalline or Polycrystalline)
Solar panels are the heart of the system. They convert sunlight into direct current (DC) electricity. In India, two types are commonly used:
- Monocrystalline panels: Higher efficiency and performance in low light
- Polycrystalline panels: More affordable, slightly less efficient
Panel selection depends on roof space, budget, and energy needs. Most modern homes opt for monocrystalline panels for better long-term output. For a deeper comparison, read our guide on monocrystalline vs polycrystalline solar panels.
- Solar Inverter
The inverter is the brain of the solar system. It transforms the DC electricity from the panels into alternating current (AC) electricity, which powers your home appliances.
In grid-tied setups, this is typically a string inverter or a microinverter system, both designed to synchronize your solar production with the electricity grid. - Net Meter
A net meter is a special type of bidirectional energy meter. It tracks:
- The electricity your solar system exports to the grid
- The electricity your home imports when solar generation is insufficient
This component is essential for enabling net metering, which allows you to receive credits for the surplus energy you send to the grid.
Additional Equipment
Addition to the core hardware, several other components support the safe and effective functioning of the system:
- Distribution Box
The distribution board controls the flow of electricity from the inverter to your home’s internal wiring. It includes safety devices like MCBs (Miniature Circuit Breakers) and surge protection systems to prevent electrical faults. - Mounting Structure
The mounting system secures solar panels to your roof at the optimal angle for maximum sunlight exposure. These structures are made of corrosion-resistant materials such as aluminum or galvanized iron and are designed to withstand wind loads and weather conditions. - Monitoring App or System
Most modern solar inverters come with real-time monitoring capabilities, accessible via a mobile app or web dashboard. These tools help you track:
- Daily and cumulative energy generation
- Grid export/import
- System performance alerts
Real-time tracking not only improves efficiency but also supports early detection of any technical issues.
Together, these components form a reliable, low-maintenance solar inverter system that integrates seamlessly with your home’s existing power setup. When installed by a certified provider, this configuration ensures maximum energy yield, long-term durability, and full compatibility with government policies like net metering.
How Does an On-Grid Solar System Work?
On-grid solar system works by generating electricity from sunlight and directly using it to power your home. It remains connected to the public electricity grid, allowing you to both consume and export electricity as needed. This seamless interaction between solar power and the grid is what makes it one of the most efficient and widely adopted solutions for residential use in India.
Step-by-Step Working Process
Here’s a clear breakdown of how an on-grid solar system functions throughout the day:
1. Solar panels absorb sunlight
Photovoltaic (PV) solar panels mounted on your rooftop convert sunlight into direct current (DC) electricity.
2. Solar inverter converts DC to AC
The DC power from the panels is sent to a solar inverter, which converts it into alternating current (AC) the standard form of electricity used in Indian households.
3. Electricity is used in real-time
This AC electricity is immediately used to power your home appliances. If your solar generation matches your usage, you consume power at no cost.
4. Extra power is exported to the grid
If the system produces more power than your home needs, the surplus is automatically sent back to the electricity grid. A bidirectional net meter records how much electricity you export.
5. Power is imported from the grid at night
When solar generation stops (e.g., at night or during heavy clouds), your home automatically draws power from the grid. The net meter tracks this imported electricity as well.
This process allows for a continuous and smart energy flow between your rooftop system and the utility grid all without manual intervention.
Day vs Night Consumption Flow
Understanding energy usage across different times of the day helps you see how efficiently the system works:
During the Day:
- Solar panels generate electricity
- Your home consumes this electricity first
- Any excess power is sent back to the grid and earns energy credits
During the Night:
- Solar production stops
- Your home draws electricity from the grid
- Energy used is offset by the credits earned earlier (if applicable under net metering)
This solar power flow is managed using a bidirectional meter, which tracks both export and import of power, enabling you to calculate net usage under the government’s solar net metering policy.
Benefits of an On-Grid Solar System
Installing an on-grid solar system offers multiple long-term benefits, particularly for homeowners with reliable access to the electricity grid. From reducing monthly utility bills to contributing to a cleaner environment, on-grid systems are an efficient and sustainable choice.
Financial Advantages
- Significant Reduction in Electricity Bills
With an on-grid system, homeowners can offset up to 80–90% of their monthly electricity costs. During the day, solar panels power your home, and any excess energy is exported to the grid. This reduces reliance on grid electricity and results in lower utility bills. - Eligibility for Government Subsidies
On-grid systems are eligible for central and state-level subsidies under India’s rooftop solar programs. Homeowners can receive up to 40% subsidy on system costs depending on the installation size and location, as per MNRE guidelines. These incentives reduce upfront costs and improve return on investment. - Low Maintenance, Long-Term Savings
On-grid systems have fewer components than off-grid alternatives most notably, they don’t require batteries. This reduces both the initial investment and the ongoing maintenance costs. With proper installation and occasional cleaning, a system can last 25+ years with minimal upkeep.
Technical & Environmental Benefits
- Seamless Integration with Home Power Systems
On-grid systems are designed to work automatically with your existing electricity connection. There’s no need for complex rewiring or structural changes. The system switches effortlessly between solar and grid power, ensuring a consistent energy supply. - Lower Carbon Footprint
Every kilowatt of solar power used helps reduce reliance on fossil fuels. A 3kW on-grid system can offset approximately 3 to 4 tons of CO₂ emissions annually, contributing to a cleaner and more sustainable future. - No Battery Waste or Replacement Issues
Unlike off-grid or hybrid setups, on-grid systems don’t use batteries for storage. This eliminates the need for hazardous battery disposal, periodic replacements, and chemical leak risks making it a more eco-friendly solution.
If you’re planning to install a solar system and want expert guidance at every step from system design to subsidy assistance choosing the best solar company in India can make all the difference. APN Solar brings years of hands-on experience, government approvals, and reliable after-sales support to ensure your transition to clean energy is seamless and cost-effective.
Is an On-Grid Solar System Right for You?
While on-grid solar systems are popular for their cost-effectiveness and simplicity, they may not be suitable for every property. To help you make an informed decision, here’s a clear breakdown of who benefits most from this setup and who may need to explore other options.
Who Should Consider It
An on-grid solar system is an excellent fit for:
1. Urban Homeowners
If you live in a city or suburban area with consistent grid power, an on-grid system offers maximum savings and minimal maintenance. Rooftop solar setups in residential neighborhoods are ideal candidates for net metering benefits.
2. Commercial Buildings with Daytime Energy Use
Offices, shops, schools, and other facilities that operate primarily during daylight hours can offset a large portion of their electricity bills. The more energy used during the day, the higher the return on solar investment.
3. Properties with Stable Electricity Access
Areas with dependable grid supply even if only for part of the day can take full advantage of grid connectivity, without needing the added cost and complexity of battery storage.
Who Should Avoid It
Despite its advantages, an on-grid system may not be the best option in the following cases:
- Homes in Remote or Off-Grid Locations
If your property isn’t connected to the public electricity grid such as in rural, hilly, or remote regions an off-grid solar system with batteries is a more appropriate solution. - Places with Frequent Outages and No Backup
On-grid systems shut down during power cuts for safety reasons. If your area experiences regular load shedding or blackouts and you don’t have an alternative power backup (like a generator or hybrid inverter), an on-grid system alone may not be sufficient.
Still unsure which type of solar setup is right for your home or property? Explore our detailed guide on on-grid vs off-grid solar systems to compare features, costs, and suitability.
On-Grid Solar System Price in India
Understanding the cost of an on-grid solar system is essential for planning your investment. Prices vary depending on system size, quality of components, and installation complexity. Additionally, government subsidies significantly reduce the upfront expenditure, making solar energy more affordable for Indian homeowners.
Pricing by System Size (Before & After Subsidy)
Here is an estimated price range for common on-grid solar system sizes, reflecting current market rates in India:
| System Size | Price Before Subsidy | Price After Subsidy |
| 1 kW | ₹60,000 – ₹75,000 | ₹40,000 – ₹50,000 |
| 3 kW | ₹1.6 Lakhs – ₹2.2 Lakhs | ₹1.1 Lakhs – ₹1.5 Lakhs |
| 5 kW | ₹2.8 Lakhs – ₹3.6 Lakhs | ₹2.0 Lakhs – ₹2.8 Lakhs |
These figures include the cost of solar panels, inverter, mounting structures, wiring, and installation labor. Prices may vary by region and supplier.
Understanding Subsidy Impact
The solar subsidy offered by the Ministry of New and Renewable Energy (MNRE) typically covers 20-40% of the system cost for residential installations, depending on the state and capacity. Applying this subsidy reduces your rooftop system cost considerably and shortens the payback period.
Other Factors Affecting Price
- Quality of Components: Premium monocrystalline panels and branded inverters can increase cost but improve efficiency and lifespan.
- Installation Complexity: Roof type, tilt, and shading may require custom mounting solutions or additional work.
- Government Policies: Local electricity boards’ rules on net metering and subsidies may vary and impact overall cost and savings.
Investing in an on-grid solar system is a smart financial decision that offers excellent returns over its 25-year lifespan, especially with government incentives making solar installation pricing competitive.
Government Subsidy & Net Metering for On-Grid Systems
India’s government actively promotes rooftop solar adoption through financial incentives and policies, making it easier and more affordable for homeowners to switch to clean energy. Two key schemes driving growth in on-grid solar are government subsidies and net metering.
How the Subsidy Works
The Ministry of New and Renewable Energy (MNRE) offers an attractive subsidy program to encourage residential solar installations across India.
- This MNRE-backed scheme provides financial assistance of 20% to 40% on the total project cost, depending on the state and system capacity.
- Typically, the subsidy is higher for systems up to 3 kW and slightly lower for larger capacities.
- The subsidy is applied either as an upfront discount or through reimbursement after installation.
- To avail the subsidy, homeowners must use MNRE-approved equipment and certified installers, such as APN Solar.
These subsidies significantly reduce the initial investment and improve the return on your solar project. learn how the PM Surya Ghar Yojana works to maximize your savings.
Net Metering Benefits
Net metering is a critical policy mechanism that allows you to:
- Sell excess solar power back to the grid: When your system generates more electricity than you consume, the surplus is fed into the grid. Your energy meter runs backward, providing credits.
- Reduce overall energy costs: During periods when your solar panels produce less (like at night), you can draw electricity from the grid using these credits, effectively lowering your monthly electricity bills.
It regulations vary slightly across states but generally follow guidelines set by the Central Electricity Regulatory Commission (CERC). They require a bidirectional meter and proper grid connectivity.
By leveraging the rooftop solar subsidy and net metering regulations, homeowners can maximize savings and accelerate payback on their on-grid solar investments.
Why Choose APN Solar?
Selecting the right solar partner is crucial for a smooth, successful transition to clean energy. APN Solar stands out as a trusted and experienced provider, dedicated to delivering quality on-grid solar solutions tailored to your needs.
Our Expertise
- MNRE-Registered Provider:
APN Solar is officially recognized and registered by the Ministry of New and Renewable Energy (MNRE), ensuring compliance with government standards and eligibility for subsidies. - 500+ Successful Residential Installations:
With extensive hands-on experience, APN Solar has completed over 500 rooftop solar projects across India, consistently delivering efficient, durable systems that meet diverse customer needs. - Pan-India Service and Support:
No matter where you are in India, APN Solar provides reliable installation, maintenance, and customer support. Their geographically distributed teams ensure timely service and local compliance.
Our Commitment
- Transparent Pricing:
APN Solar offers clear, upfront pricing without hidden fees. This transparency helps customers plan budgets accurately and gain confidence in their investment. - Complete Paperwork and Subsidy Claim Support:
Navigating subsidy applications and government paperwork can be complex. APN Solar handles all documentation, approvals, and follow-ups, making the process hassle-free for you. - Real-Time Monitoring & After-Sales Service:
APN Solar equips your system with monitoring tools that allow you to track energy production live. Their dedicated support team also ensures ongoing maintenance and prompt resolution of any issues.
With proven expertise, comprehensive support, and a customer-first approach, APN Solar Pvt. Ltd. is your reliable choice for an on-grid solar system. For those seeking the best solar company in India, APN Solar combines industry-leading technology with trusted service.
Freqeuntly Asked Questions
1. What is an on-grid solar system?
An on-grid solar system connects your solar panels to the electricity grid. It powers your home using solar energy and exports excess electricity to the grid, reducing bills through net metering without the need for batteries.
2. What is the difference between on-grid and off-grid solar systems?
On-grid solar systems connect to the grid and don’t require batteries. Off-grid systems operate independently, storing energy in batteries for use during outages or night, making them suitable for remote areas without stable grid access.
3. Does an on-grid solar system need a battery?
No, on-grid solar systems don’t require batteries. They use the electricity grid to supply power when solar production is low or at night, making them more affordable and low-maintenance compared to battery-based off-grid systems.
4. How much does an on-grid solar system cost in India?
On-grid solar systems in India cost between ₹40,000 and ₹75,000 per kW after subsidies. Prices vary by system size, quality, and installation, with subsidies reducing upfront costs and improving the payback period.
5. What are the disadvantages of an on-grid solar system?
On-grid systems shut down during power outages, requiring stable grid access. They depend on net metering policies and are not suitable for areas with frequent blackouts or remote locations without electricity grid connectivity.
6. How many solar panels are required for a 5kW on-grid system in India?
A 5kW system typically needs 14–17 solar panels of 300–350 watts each. The exact number depends on panel wattage, roof space, and energy requirements.
7. What is the lifespan of an on-grid solar system?
On-grid solar systems generally last 25 years or more. Solar panels maintain about 80% efficiency after 25 years, while inverters may need replacement every 10-15 years for optimal performance.
Final Thoughts
Switching to clean, affordable solar energy is one of the smartest decisions for homeowners today. An on-grid solar system not only helps you save on electricity bills but also contributes to a greener future.
With APN Solar recognized as the best solar company in India you get expert guidance throughout your solar journey. From handling government subsidy paperwork to professional installation and real-time monitoring, APN Solar ensures a hassle-free transition to solar power.
Ready to make the switch? Fill out the form below for more details, and let our experts help you get started with a customized solar solution that delivers long-term savings and energy independence.
