On This Page
Quick Answer: A 3kW solar system in Tamil Nadu generates ~378 units/month, enough to achieve a zero electricity bill for most homes. After PM Surya Ghar subsidy, the net cost is approximately ₹1.2 lakh. Payback period: 3 years. 25-year savings: ₹8-10 lakh.
Every month, thousands of Tamil Nadu homeowners pay ₹2,000–₹4,000 to TANGEDCO for electricity they could be generating for free on their own rooftop. A 3 kW solar system — the most popular residential size in the state — can eliminate that bill entirely. And with the PM Surya Ghar subsidy knocking ₹78,000 off the cost, the system pays for itself in roughly 3 years.
This is not marketing. This is arithmetic. Let us walk through the real numbers.
How Much Power Does a 3kW System Actually Generate?
Solar generation depends on two factors: system size and sunlight hours. Tamil Nadu averages 4.2–5.0 peak sun hours per day depending on your district — one of the highest in India.
Monthly Generation Calculation
Daily generation = 3 kW × 4.2 hours = 12.6 kWh (units)
Monthly generation = 12.6 × 30 = 378 units
| Parameter | Value |
|---|---|
| System size | 3 kW |
| Average peak sun hours (TN) | 4.2 hours/day |
| Daily generation | 12.6 units |
| Monthly generation | ~378 units |
| Annual generation | ~4,536 units |
Note: This uses the conservative 4.2-hour figure. Districts like Ramanathapuram, Sivaganga, and Tirunelveli regularly see 4.8–5.0 hours, pushing monthly generation above 400 units. Coimbatore and Salem average around 4.3–4.5 hours.
Real-World Efficiency Factors
The 378-unit figure assumes ideal conditions. In practice, account for:
- Dust and soiling: 2–5% loss (reduced with regular cleaning)
- Temperature de-rating: 3–5% loss in peak summer (panels lose efficiency above 25°C)
- Inverter efficiency: 96–98% conversion efficiency
- Monsoon months: 20–30% lower generation in November–December
Realistic annual average: 340–360 units per month across all 12 months. We will use 350 units as our working number for conservative calculations.
Your TANGEDCO Bill Before Solar
Let us look at what a typical Tamil Nadu home consuming 350 units per month pays under the current TANGEDCO domestic tariff structure (2025–26):
TANGEDCO Domestic Tariff Slabs
| Consumption Slab | Rate per Unit |
|---|---|
| 0–100 units | Free (for total consumption up to 100 units) |
| 0–200 units | ₹2.25/unit (if consumption exceeds 100) |
| 201–400 units | ₹4.50/unit |
| 401–500 units | ₹6.00/unit |
| 501–600 units | ₹8.00/unit |
| 601–800 units | ₹9.00/unit |
| Above 800 units | ₹11.00/unit |
Bill Calculation for 350 Units (Without Solar)
| Slab | Units | Rate | Amount |
|---|---|---|---|
| 0–200 | 200 | ₹2.25 | ₹450 |
| 201–350 | 150 | ₹4.50 | ₹675 |
| Subtotal | 350 | ₹1,125 | |
| Fixed charges | ₹50 | ||
| Tax and other levies (~15%) | ₹176 | ||
| Total monthly bill | ~₹1,350 |
For homes consuming 400–500 units, the bill jumps significantly because of the higher ₹6.00/unit slab:
| Consumption | Approximate Monthly Bill |
|---|---|
| 300 units | ₹1,050 |
| 400 units | ₹1,800 |
| 500 units | ₹2,700 |
| 600 units | ₹3,800 |
The TANGEDCO tariff is progressive — the more you consume, the more you pay per unit. This is exactly why solar makes such a dramatic difference. By generating your own 350 units, you eliminate the expensive upper slabs entirely.
Your TANGEDCO Bill After Solar
With a 3 kW system generating ~350 units and net metering active, here is what happens:
Scenario 1: Generation Matches Consumption (350 units each)
- Units consumed from grid: 350
- Units exported to grid: 350
- Net consumption: 0 units
- Bill: Only fixed charges (~₹50–100/month)
- Monthly savings: ~₹1,250–₹1,300
Scenario 2: You Consume More Than You Generate
If your consumption is 450 units and you generate 350:
- Net consumption: 100 units
- Bill for 100 units: ₹0 (falls in the free slab)
- Monthly savings: ~₹1,700
Scenario 3: You Generate More Than You Consume
If your consumption is 250 units and you generate 350:
- Net export: 100 units
- These 100 units carry forward as credit to the next billing cycle
- Monthly bill: ₹0 (just fixed charges)
System Cost Breakdown
Here is what a quality 3 kW on-grid solar system costs in Tamil Nadu in 2026:
| Component | Cost Range |
|---|---|
| Solar panels (3 kW, DCR-compliant) | ₹75,000–₹90,000 |
| Solar inverter (3 kW, grid-tie) | ₹30,000–₹40,000 |
| Mounting structure (GI/aluminium) | ₹18,000–₹25,000 |
| Wiring, conduits, earthing | ₹10,000–₹15,000 |
| Installation and commissioning | ₹15,000–₹20,000 |
| Net metering and TANGEDCO charges | ₹5,000–₹8,000 |
| Total system cost | ₹1,80,000–₹2,20,000 |
We will use ₹2,00,000 (₹2 lakh) as our reference price for a quality installation with DCR panels, a reliable inverter, and professional installation.
After PM Surya Ghar Subsidy
| Item | Amount |
|---|---|
| System cost | ₹2,00,000 |
| PM Surya Ghar subsidy | -₹78,000 |
| Net cost to you | ₹1,22,000 |
Your effective out-of-pocket expense: ₹1,22,000 (approximately ₹1.2 lakh).
Note: You pay the full ₹2 lakh to the vendor upfront. The ₹78,000 subsidy is reimbursed to your bank account within 30–60 days of commissioning. Some homeowners use a solar loan to bridge this gap.
Payback Period Calculation
Now for the question everyone asks: when do I break even?
Conservative Calculation
| Parameter | Value |
|---|---|
| Net system cost | ₹1,22,000 |
| Monthly savings | ₹2,000 (conservative average) |
| Annual savings | ₹24,000 |
| Payback period | ~3 years (38 months) |
For Higher Consumption Homes (500+ units)
| Parameter | Value |
|---|---|
| Net system cost | ₹1,22,000 |
| Monthly savings | ₹3,000 |
| Annual savings | ₹36,000 |
| Payback period | ~2.8 years (34 months) |
Without Subsidy (For Comparison)
| Parameter | Value |
|---|---|
| System cost | ₹2,00,000 |
| Monthly savings | ₹2,000 |
| Annual savings | ₹24,000 |
| Payback period | ~6.9 years (83 months) |
The subsidy cuts your payback period nearly in half. This is why applying for PM Surya Ghar before installing is absolutely critical.
25-Year Savings Projection
A solar system has a warranted life of 25 years (panels degrade by about 0.5–0.7% per year). Meanwhile, electricity tariffs historically increase by 3–5% annually. Here is the compounding effect:
| Year | Annual Savings (₹) | Cumulative Savings (₹) | Notes |
|---|---|---|---|
| 1 | 24,000 | 24,000 | First full year of generation |
| 2 | 24,720 | 48,720 | 3% tariff increase |
| 3 | 25,462 | 74,182 | Breakeven point |
| 4 | 26,226 | 1,00,408 | Net profit begins |
| 5 | 27,013 | 1,27,421 | System fully paid off including all costs |
| 6 | 27,823 | 1,55,244 | |
| 7 | 28,658 | 1,83,902 | |
| 8 | 29,518 | 2,13,420 | Savings exceed original system cost |
| 9 | 30,403 | 2,43,823 | |
| 10 | 31,315 | 2,75,138 | Minor inverter service may be needed |
| 11 | 32,255 | 3,07,393 | |
| 12 | 33,223 | 3,40,616 | Inverter replacement fund (~₹30,000) |
| 13 | 34,219 | 3,74,835 | |
| 14 | 35,246 | 4,10,081 | |
| 15 | 36,303 | 4,46,384 | Panels still at ~90% efficiency |
| 16 | 37,392 | 4,83,776 | |
| 17 | 38,514 | 5,22,290 | |
| 18 | 39,670 | 5,61,960 | |
| 19 | 40,860 | 6,02,820 | |
| 20 | 42,085 | 6,44,905 | Panels at ~85% efficiency |
| 21 | 43,348 | 6,88,253 | |
| 22 | 44,648 | 7,32,901 | |
| 23 | 45,988 | 7,78,889 | |
| 24 | 47,367 | 8,26,256 | |
| 25 | 48,788 | 8,75,044 | Total 25-year savings |
₹8.75 lakh in total savings from a ₹1.22 lakh investment. That is a 717% return on investment over the system's lifetime — or roughly 28.7% annualized when you factor in tariff inflation.
Net Metering: How Credits Accumulate
Under TNERC regulations, net metering in Tamil Nadu works on an annual settlement basis:
- Monthly billing: TANGEDCO calculates your net import/export each billing cycle
- Export credits carry forward: If you export more than you import in a given month, the surplus units are credited to the next month
- Annual settlement: At the end of the financial year (March), any remaining export credits are settled at the APPC (Average Pooled Purchase Cost) rate — currently around ₹3.50–₹4.00 per unit
- Optimal strategy: Size your system to match your annual consumption as closely as possible, since 1:1 credit during the year is worth more than the settlement rate
What Happens When You Generate More Than You Consume?
During sunny months (February–May), a 3 kW system may generate 400+ units while your consumption stays at 300. The excess 100+ units bank as credits. During monsoon months (October–December), generation drops to 250–280 units but your credits from summer cover the shortfall.
This is why annual net metering is powerful — it lets you bank sunshine from summer and spend it in monsoon.
Real Customer Example
Rajesh K., Coimbatore — Installed a 3 kW system in January 2026
| Metric | Before Solar | After Solar |
|---|---|---|
| Monthly consumption | 380 units | 380 units |
| Monthly generation | — | 365 units (average) |
| Net grid consumption | 380 units | 15 units |
| Monthly EB bill | ₹1,500 | ₹50 (fixed charges only) |
| Monthly savings | — | ₹1,450 |
| System cost | — | ₹1,95,000 |
| Subsidy received | — | ₹78,000 |
| Net cost | — | ₹1,17,000 |
| Projected payback | — | 2 years 8 months |
Rajesh's exact words: "I did not believe the numbers until I saw my first EB bill after solar. It was ₹50. My neighbour thought the meter was broken."
Why 3 kW Is the Sweet Spot
| System Size | Subsidy | Net Cost | Monthly Savings | Payback |
|---|---|---|---|---|
| 1 kW | ₹30,000 | ~₹40,000 | ~₹600 | 5.5 years |
| 2 kW | ₹60,000 | ~₹60,000 | ~₹1,200 | 4.2 years |
| 3 kW | ₹78,000 | ~₹1,22,000 | ~₹2,000 | 3 years |
| 5 kW | ₹78,000 | ~₹2,50,000 | ~₹3,200 | 6.5 years |
| 10 kW | ₹78,000 | ~₹5,50,000 | ~₹5,500 | 8.3 years |
The 3 kW system has the best subsidy-to-cost ratio, making it the fastest to pay back. Larger systems save more money in absolute terms but take longer to recoup because the subsidy stays capped at ₹78,000.
Factors That Can Improve (or Worsen) Your Payback
Faster Payback If:
- You consume 400+ units/month (higher tariff slabs eliminated)
- Your roof has no shading issues (maximum generation)
- You clean panels regularly (5–10% more generation)
- TANGEDCO tariffs increase faster than 3% (likely, given historical trends)
- You use a solar loan and treat EMI as your "electricity bill"
Slower Payback If:
- You consume less than 200 units/month (already in low-tariff slabs)
- Significant roof shading from trees or adjacent buildings
- Panels face east or west instead of south (15–20% less generation)
- You delay net metering activation after installation
Getting Started
The numbers are clear: a 3 kW solar system in Tamil Nadu, after the PM Surya Ghar subsidy, pays for itself in about 3 years and then delivers free electricity for the next 22 years. The total lifetime savings exceed ₹8.75 lakh.
The only question is whether you want to keep paying TANGEDCO or start paying yourself.
- Calculate your exact savings with our Solar Savings Calculator — enter your monthly bill and get a personalised payback estimate
- Get a free consultation from Tristar Energy — Contact us for a no-obligation site assessment and subsidy-inclusive quote
Every month you wait is another ₹1,500–₹3,000 paid to TANGEDCO that could have stayed in your pocket.
Ready to Go Solar?
Get a personalized solar quote based on your electricity consumption and roof area.
Related Articles
Solar ROI Calculator: Payback Period Tamil Nadu 2026
Calculate your solar panel ROI with real TANGEDCO tariff rates. Most Tamil Nadu homes see 3-5 year payback with 25%+ annual returns. Free calculation method inside.
Monofacial vs Bifacial Panels | Coimbatore Homes
A Coimbatore-specific analysis comparing monofacial and bifacial solar panels — covering terrace types, albedo effects, cost differences, generation gains, and ROI calculations for residential installations.
Solar Investment vs Fixed Deposit: Which Gives Better Returns in 2026?
A detailed financial comparison between investing in rooftop solar versus a bank fixed deposit in 2026 — IRR, tax treatment, inflation protection, and 25-year cumulative returns analyzed.