Commercial Rooftop Solar in India: Cost, ROI & Business Benefits

India’s energy sector is transforming rapidly, and commercial rooftop solar has emerged as a core driver of this change. With installed rooftop solar capacity at 16.3 GW and the C&I segment growing at a record pace, businesses today have a golden chance to secure energy independence, save costs, and enhance sustainability.

As the demand for clean energy accelerates, C&I solar power in India is becoming a mainstream solution for cost-conscious, sustainability-driven businesses.

Market Growth and Business Potential

  • Accelerated Expansion: In FY 2025, India installed around 5.15 GW of rooftop solar, while utility-scale projects added another 17.4 GW. 
  • Growth Outlook: By FY 2027, rooftop solar is expected to touch 25–30 GW, growing at a 33% CAGR—with the C&I sector as a key contributor. 
  • Segment Trends: Though residential projects currently lead, the commercial and industrial rooftop solar market is expanding steadily as businesses seek long-term energy savings.

Financial Impact and ROI for Businesses

Switching to rooftop solar is not just an environmental decision—it’s a financial strategy.

  • Strong ROI: Businesses typically achieve 20–25% ROI, and in some cases 25–35% within the first year depending on system size and financing model.
  • Cost Example: A 1 MW rooftop solar system costs around ₹5 crore. With ₹0.5 crore in subsidies, the system saves ~₹1.8 crore annually (minus O&M costs of ₹0.06 crore). Net annual savings = ₹1.74 crore, giving 38–40% ROI.
  • Tax Benefits: Under Section 32 of the Income Tax Act, companies can claim 40% accelerated depreciation (plus an additional 20% for MSMEs), making payback periods even shorter.
  • Sector Benefits: Adopting solar energy for factories and warehouses not only reduces electricity bills but also shields businesses from rising grid tariffs.

commercial-rooftop-solar

Incentives, Policies, and Business Models

Businesses today have multiple levers to maximize rooftop solar benefits:

    • Net Metering: Excess power fed back to the grid earns credits, reducing future bills. Policies differ by state, so due diligence is essential.

    • Government Support:
      • PM Surya Ghar Yojana focuses on residential, but it strengthens the overall distributed solar market.
      • States like Gujarat, Maharashtra, and UP are actively promoting rooftop solar through local subsidies and regulatory push.

    • Emerging Guidelines: MNRE’s new draft mandates IoT-enabled inverters with real-time monitoring for 30 GW rooftop projects, ensuring transparency and grid stability.

    • Flexible Business Models:
      • CAPEX Model – Own the system, recover investment in 3–5 years.
      • OPEX / RESCO Model – Zero upfront cost; pay through Power Purchase Agreements (PPAs).

Case Studies and Real-World Impact

Delhi : With 1,771 commercial rooftop solar connections, the city generates 81 MWp, saving businesses about ₹80 crore annually.

Key Challenges and Solutions

While rooftop solar is promising, businesses should plan for:

  • Grid Integration Issues: Reverse power flow and voltage variations can occur—addressed with proper design and storage.
  • O&M Requirements: Regular monitoring and preventive maintenance are critical for consistent returns.
  • Policy Variations: Net metering caps differ by state (some limit to 10 kWp), affecting ROI for larger systems.
  • Financing Gaps: Long-term financing (10+ years) is still limited, making strategic partnerships important.
  • Regulatory compliance issues: Every state deals with the policy as per their regulation. Center does not have authority to amend them.

Roadmap for Business Leaders

StepWhy it Matters
Energy AuditDetermine optimal rooftop system size and savings potential.
Policy ReviewUnderstand your state’s net metering and subsidy rules.
Choose ModelCAPEX for ownership, RESCO for zero capital.
ROI AnalysisExpect 20–35% returns and 3–5 year payback.
ComplianceUse MNRE-approved inverters with monitoring systems.
Plan O&MSecure long-term operation and maintenance support.
Leverage ESGShowcase sustainability gains to customers and investors.

Conclusion

For businesses, commercial rooftop solar in India is more than an energy alternative—it’s a strategic growth driver. With strong ROI, tax benefits, evolving policies, and proven success stories, rooftop solar offers an unmatched opportunity to cut costs, boost sustainability, and future-proof operations.

For decision-makers evaluating business solar installation in India, the time to act is now.

About the Author

Jatin Singh is a content developer at Sun Photonics Pvt. Ltd., specializing in creating impactful content for solar energy solutions. With a background in tech and health, he has previously worked in digital marketing and pharma. Passionate about sustainability, and currently exploring all things about solar!

Approval by an Expert: 
“This content is reviewed and approved by Dr. Sujata Bhaker, who holds a Doctorate in Renewable Energy and brings over 10 years of industry expertise.”

Frequently Asked Questions (FAQ)

A 1 MW rooftop solar system in India typically costs around ₹5 crore. With subsidies and tax benefits, businesses can recover costs within 3–5 years.

Industries in India can expect 20–35% ROI from rooftop solar, depending on system size, financing model, and state policies.

CAPEX is better for businesses seeking ownership and faster ROI, while OPEX/RESCO suits those preferring zero upfront investment.

Yes, rooftop solar is ideal for large energy consumers such as factories and warehouses, where it significantly reduces operational costs.

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