Commercial Solar in India — The Complete Business Guide
Commercial electricity tariffs in India range from ₹7–₹15 per unit. Solar can reduce this to ₹2–₹3 per unit, delivering massive savings for businesses.
Why Commercial Solar Makes Sense
- Commercial electricity rates are 2–3x higher than residential — larger savings
- 80% accelerated depreciation benefit in Year 1 (reduces tax liability significantly)
- Payback period of 3–4 years vs 5–7 years for residential
- No subsidy cap — install as much capacity as your roof allows
- Sell excess power back to grid via net metering
System Sizing for Businesses
| Business Type | Recommended Size | Monthly Savings | Investment |
|---|---|---|---|
| Small Office (10 staff) | 10–20 kW | ₹15,000–₹30,000 | ₹5–10 Lakhs |
| Factory / Warehouse | 50–200 kW | ₹75,000–₹3,00,000 | ₹25–100 Lakhs |
| Hotel / Hospital | 100–500 kW | ₹1,50,000–₹7,50,000 | ₹50–250 Lakhs |
| Industrial Plant | 500 kW+ | ₹7,50,000+ | ₹250 Lakhs+ |
Tax Benefits for Businesses
Section 32 — 80% Accelerated Depreciation:
Businesses can claim 80% of the solar system cost as depreciation in the first year under the Income Tax Act. For a ₹50 lakh system, this means ₹40 lakh depreciation, saving approximately ₹13–16 lakh in tax (at 30–40% tax bracket).
OPEX vs CAPEX Model
Not all businesses want to invest capital. Two models are available:
- CAPEX: Own the system, maximum savings, depreciation benefits
- OPEX/PPA: Third party owns the system, you pay per unit generated (₹3–4/unit) — zero investment
ROI Example — 100 kW Factory
- System cost: ₹50 lakhs
- Annual savings: ₹18 lakhs (at ₹8/unit tariff)
- Tax benefit (Year 1): ₹15 lakhs
- Effective payback: 2.5 years
- 25-year lifetime savings: ₹4+ crore