An on-grid solar system is also known as a grid-tied system since it is connected to the main utility grid. One of the best things about installing on-grid solar at home is the subsidy you get. The Indian government offers homeowners a subsidy for installing a rooftop on-grid solar system ranging between Rs. 30,000 and Rs. 78,000 (depending upon the installed system capacity).
The on-grid solar system price varies from city to city and, of course, depends on the size of the system. Let’s give you a price demonstration from two different cities (one from North India and one from South India) to give you an idea about the on-grid solar system cost :
*Please note : The prices above are indicative as of 29th April 2025 for SolarSquare Blue 6ft variant. The final on-grid solar system cost in India depends on your city, DISCOM charges, product variant opted for, panel type, system capacity, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Also, prices are subject to change without prior notice.
In this article, we’ve threaded the ins and outs of on-grid solar systems for you: workings, price details with and without a subsidy, and installation tips. Dive in for details!
An on-grid solar system (grid-tied) connects directly to the utility grid through a bi-directional meter (net meter). Most Indian homes with a reliable grid connection choose on-grid solar since this system is powerful enough to support all household energy requirements.
The on-grid solar system is a careful compilation of many components, listed below, arranged together to convert sunlight into electricity:
Wondering what the individual role of these components is? Let’s break it down for you!
Did you know? When maintained properly, an on-grid solar system can last for 25 years. Contrary to popular belief, cleaning your panels with sprinklers can actually damage them . To keep your system operating at its peak efficiency, be sure to sign up for professional after-sales services.
Here’s a breakdown of how every single component in an on-grid solar system comes together to power your home.
1. Solar Panels
Solar panels are the most visible part of the solar system. They’re installed on the rooftop, facing the South direction. When sunlight falls on these panels, they absorb that sunlight and convert it into electricity.
Did you know? Solar electricity directly from the panels is DC power. Since homes require alternating current (AC), a solar inverter is needed to convert direct current into AC.
2. Solar Inverter
Without a solar inverter, the entire solar system would have been an impractical model. The solar inverter converts DC into AC.
This conversion is essential because that’s the only way to convert electricity generated from an on-grid solar system into a usable form (AC) that can run household appliances.
3. Solar Module Mounting Structures
These are the pillars that support solar panels. They must be of a standard grade so that they can withstand heavy winds during storms and cyclones and hold the weight of the solar panels for 25 years (that’s the life of a solar system).
The best solar module mounting structures are prefabricated in precision labs. They’re coated with hot-dip galvanizing on steel to make them rust-proof.
For instance, My Solar Roof top’s Intelligent WindPro MountTM 2.0 mounting structure, which is IIT-Bombay approved, can:
4. Solar Accessories
They might not sound that important in the entire setup, but solar accessories are as important as a panel, an inverter, or a mounting structure. Let’s see how!
Please note : all the DC cable connections are made using MC4 connectors.
5. Bi-directional Meter
Also known as a net meter, the bi-directional meter is basically designed to keep a track of:
An on-grid solar system will not become functional until and unless the regular meter is replaced with a bidirectional meter.
The net meter helps the discom track the power generated by the solar system, the power consumed, the power supplied to the grid, and the power imported.
At the end of every month, when the electricity bill is generated, the readings from the bidirectional meter give an account of:
Here’s how this solar net metering process helps:
Now you’ve seen how multiple on-grid solar system components come together, it makes sense to break down the process of sunlight getting converted into electricity.
Here’s how an on-grid solar system works
The Indian government offers a subsidy when you install an on-grid solar system for home. This subsidy remains the same for all states in India.
Here are the subsidy breakdown details:
| Solar System Size | Solar Subsidy Offered Under PM Surya Ghar Muft Bijli Yojana |
|---|---|
| 1 kWp | Rs. 30,000 |
| 2 kWp | Rs. 60,000 |
| 3 kWp and higher | Rs. 78,000 |
Please note : The subsidy is capped at Rs. 78,000 for on-grid rooftop solar systems that are 3 kWp or higher.
Did you know? The state government of UP offers an additional subsidy to homeowners on top of the subsidy offered by the central government.
Here are the state subsidy details for UP homeowners:
Based on the details above, here’s a breakdown of the on-grid solar system subsidy for different capacity solar systems
| On-grid Solar System Size | On-grid Solar System Subsidy in All States Except UP | Total On-grid Solar System Subsidy in UP |
|---|---|---|
| 1 kWp | Rs. 30,000 | Rs. 30,000 + Rs. 15,000 = Rs. 45,000 |
| 2 kWp | Rs. 60,000 | Rs. 60,000 + Rs. 30,000 = Rs. 90,000 |
| 3 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 4 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 5 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
| 10 kWp | Rs. 78,000 | Rs. 78,000 + Rs. 30,000 = Rs. 1,08,000 |
And save up to ₹78,000 with subsidy