How to evaluate whether solar power makes financial sense for your factory

Solar power for Indian industrial consumers has reached genuine financial attractiveness — not because of government incentives (though those exist), but because the economics now work without them in many situations. The question is not 'is solar a good idea in general' but 'does it make financial sense for my specific situation'?

The core calculation: what is your current industrial electricity tariff (typically ₹7–12 per unit in most Indian states for HT/LT industrial consumers)? What would your solar generation cost (currently ₹3–4.5 per unit for a rooftop system, all-in over a 25-year system life)? The difference multiplied by your annual consumption is your annual saving. Divide your capital cost by annual saving to get payback period.

Factors that improve the economics: high electricity tariff (above ₹8/unit), high daytime consumption (solar generates during the day — if your plant runs primarily during day shifts, utilisation is high), large available roof area, and access to low-cost financing (loans at 9–11% significantly improve returns compared to equity-funded investments).

Factors that worsen the economics: low tariff (below ₹6/unit, common in some states with industrial incentives), primarily night shift operations (solar generation during day is wasted if you're not consuming it), small roof area (limits system size), and grid export restrictions in your state (some DISCOMs limit or prohibit net metering for industrial consumers above a certain capacity).

Net metering allows you to export surplus solar generation to the grid and get credit on your bill. Eligibility and rates vary by state. In states where net metering is permitted at attractive rates, the economics of solar improve significantly even for plants with uneven daytime consumption.

Get quotes from multiple EPCs (Engineering, Procurement, and Construction contractors). The solar industry has significant variation in quality and pricing. Get at least three quotes, check the references of the EPC, and verify the quality of the panels and inverters they're proposing.