On-Grid Solar System
On-Grid Solar System: How It Works, Cost, Subsidy & Benefits (Complete Tamil Nadu Guide)
Learn how an on-grid solar system works, its cost, 5 kW payback, net metering rules under TNPDCL/TANGEDCO, subsidy, advantages and limitations. A complete guide by Bright Power.
What is an on-grid solar system?
An on-grid solar system (also called a grid-tied system) is a rooftop solar setup connected to the local electricity grid, such as TANGEDCO/TNPDCL in Tamil Nadu. It does not need batteries. Your solar panels power your home or business first, and any extra electricity goes to the grid. When you need more than the panels produce, for example at night, you draw power from the grid.
You are billed only for the net difference between the units you import and the units you export, recorded by a bi-directional net meter.
How does an on-grid solar system work?
- Panels generate DC power. Sunlight falls on the rooftop modules (for example Vikram Solar or UTL), producing Direct Current (DC).
- The inverter converts DC to AC. The grid-tie string inverter changes it into Alternating Current (AC) that your appliances use.
- Your loads run on solar first. Fans, ACs, refrigerators and other loads use the solar power directly, at no cost.
- Surplus goes to the grid. Excess units are exported and recorded by the net meter.
- Night-time use. You draw from the grid, and exported units are adjusted in your bill as per the applicable rules.
Main components
- Solar panels: 540-580 W mono PERC/TOPCon modules are common now.
- Grid-tie inverter: The brain of the system. It syncs with grid voltage and frequency.
- Mounting structure: Galvanised iron or aluminium, designed for local wind load.
- DC/AC cables, protection devices: MCBs, surge protectors, ACDB and DCDB.
- Earthing and lightning arrestor: Essential for safety and approval.
- Bi-directional net meter: Measures import and export separately.
- Monitoring system: App-based tracking of daily generation.
Does on-grid solar work during a power cut?
No. During a grid outage, an on-grid inverter switches off automatically. This is called anti-islanding protection, and it keeps electricity from flowing back into the line while workers repair it. If you need backup power, a hybrid solar system with batteries is the right choice.
Residential example: 5 kW on-grid system in Tamil Nadu
| Parameter | Approximate value |
|---|---|
| System size | 5 kW |
| Daily generation | 20-22 units |
| Generation per 2-month billing cycle | About 1,200 units |
| Bi-monthly bill reduction | About ₹9,500-10,000 |
| Annual savings | About ₹57,600 |
| System cost | About ₹2.5-3 lakh |
| Payback period | About 4.5-5 years |
| Panel warranty | 25 years |
Domestic tariff in Tamil Nadu rises steeply above 500 units per billing cycle. Offsetting those high-slab units gives the biggest savings, so a 5 kW system suits homes with heavy air-conditioning use. After payback, you get roughly 20 more years of nearly free electricity.
Commercial example: 25 kWp on-grid system
Commercial consumers in Tamil Nadu do not get the 1:1 net metering available to residential users. They come under the Net Feed-in (net billing) mechanism.
How billing works
- Solar power is first consumed by your commercial loads, offsetting the high commercial tariff.
- Exported units are paid at a fixed feed-in tariff set by TNERC, which is much lower than the retail tariff.
- Bill = (Imported units × commercial tariff) − (Exported units × feed-in tariff).
So the return is best when most of the solar power is used during business hours, as in shops, offices, schools, factories and hospitals.
- Sanctioned load: System capacity cannot exceed your sanctioned load. If it does, apply for load enhancement first.
- Transformer limit: Solar capacity is capped relative to the distribution transformer rating (typically around 30%). Technical feasibility approval from the local AEE is the first step.
- Drawings: TANGEDCO requires a five-part submission: Single Line Diagram (in TANGEDCO’s line-style conventions), site layout plan, earthing and lightning protection scheme, net meter connection diagram, and a structural engineer’s roof load certificate.
- TNEI inspection: Systems above 10 kW need safety clearance from the Tamil Nadu Electrical Inspectorate before the agreement and meter installation.
- Network charges: Grid network (wheeling) charges set by TNERC may be added to the bill.
Government subsidy
Residential rooftop solar customers may be eligible for central subsidy under the PM Surya Ghar: Muft Bijli Yojana. Subsidy is available for residential rooftops only, not commercial ones. Amounts and conditions change, so confirm current values on the official portal or ask Bright Power to guide you through the application.
Advantages of on-grid solar
- Lowest upfront cost among on-grid, off-grid and hybrid systems
- Big reduction in electricity bills, and near-zero bills for many homes
- No battery purchase or replacement
- Very low maintenance
- Short payback of about 4-6 years
- 25-30 year panel life
- Reduces carbon footprint
Limitations to know
- No power during grid failure
- No generation at night
- Needs DISCOM approval and a net meter, which takes time
- Needs a shadow-free roof area
- Inverter usually needs replacement after 10-12 years
Who should choose on-grid solar?
- Homes with high daytime or AC consumption and a stable grid
- Shops, offices, schools and factories running mostly in the daytime
- Anyone who wants the fastest return on investment and does not need backup
On-grid vs off-grid vs hybrid
| Feature | On-grid | Off-grid | Hybrid |
|---|---|---|---|
| Grid connection | Yes | No | Yes |
| Battery | No | Yes | Yes |
| Power cut backup | No | Yes | Yes |
| Upfront cost | Lowest | Highest | Medium-high |
| Net metering | Yes | No | Yes |
| Best for | Bill savings | Remote areas | Backup plus savings |
Installation process
- Site survey and shadow analysis
- System sizing based on your electricity bills (about 80-100 sq ft per kW)
- Quotation and agreement
- Application for feasibility and net metering
- Material delivery and installation
- Inspection (TNEI for systems above 10 kW)
- Net meter installation and commissioning
- Monitoring, warranty and service support
Maintenance tips
- Clean panels every 2-4 weeks, since dust can reduce output by 5-15%
- Check cables, earthing and inverter once a year
- Monitor daily generation in the app to catch problems early
Frequently asked questions
How does an on-grid solar system work?
Panels make DC power, the inverter converts it to AC, your loads use it first, and extra units go to the grid through a net meter.
Do on-grid solar systems need batteries?
No. The grid works as your storage.
Will on-grid solar work during a power cut?
No. It shuts down for safety. Choose a hybrid system if you need backup.
How many kW of solar do I need?
As a rough rule, 1 kW for every 120-150 units of monthly consumption. A site survey gives the exact size.
How much does a 5 kW on-grid system cost?
Typically ₹2.5-3 lakh, depending on brand, structure and approvals.
What is the payback period?
Usually 4.5-5 years for homes with high consumption.
Will my electricity bill become zero?
Often very close to zero for homes, but fixed charges may still apply.
Is net metering available for commercial users in Tamil Nadu?
Commercial users come under net feed-in billing, where exports are paid at a fixed tariff instead of 1:1 credit.
Is on-grid better than hybrid?
On-grid gives faster savings at lower cost. Hybrid gives backup power at higher cost.
Conclusion
An on-grid solar system is the most affordable and quickest way to cut your electricity bill, whether you own a home or run a business. Bright Power designs and installs on-grid, off-grid and hybrid solar systems, and handles the survey, design, approvals and net metering for you.
Ready to go solar? Contact Bright Power for a free site survey and quotation.