Return on investment (ROI) refers to the financial benefits gained from an investment relative to its cost. When it comes to on-grid solar systems for domestic consumers in Kerala, several factors contribute to ROI. Let’s explore them.

1. Cost of the solar system: The initial cost of installing an on-grid solar system includes solar panels, inverters, mounting structures, wiring, and installation charges. The total cost will vary depending on the size of the system and the quality of components used.

2. Electricity generation: The amount of electricity generated by the solar system depends on various factors like system capacity, geographical location, orientation, tilt angle, and shading. In Kerala, which receives a significant supply of sunlight, solar systems have great potential for electricity generation.

3. Electricity savings: By generating solar power, homeowners can offset their electricity consumption from the grid. This leads to reduced electricity bills or even eliminates them entirely if the solar system generates enough power to cover the individual household needs.

4. Feed-in Tariff (FiT) or net metering: In some regions, including Kerala, the excess electricity generated by the on-grid solar system can be fed back into the grid. This is facilitated through net metering, where unused power is subtracted from the homeowner’s electricity bill or compensated for at a specific feed-in tariff rate.

5. System lifespan and maintenance: On-grid solar systems generally have a lifespan of 25 to 30 years with proper care. Regular cleaning, inspection, and occasional component replacements are necessary to ensure optimal performance and longevity.

6. Government incentives and subsidies: Governments often provide financial incentives and subsidies to promote solar energy adoption. These can significantly reduce the upfront cost of installing a solar system and improve ROI.

To calculate ROI, you’ll need to consider the upfront investment, annual electricity savings, potential feed-in tariff or net metering benefits, and the system’s lifespan. The ROI can be determined by dividing the cumulative financial benefits (savings and incentives) by the initial investment and expressing it as a percentage.

It’s advisable to consult with local solar installers or energy experts in the state who can provide specific information based on your location, electricity tariffs, and available incentives. They can also help estimate the system size and potential cost reductions, which will be crucial in evaluating the return on investment for your specific situation.