Techno-Economic Analysis of Off-Grid
Rooftop Solar PV System
Piyush Sharma Haranath Bojja
Department of Electrical Engineering Department of Electrical Engineering
Indian Institute of Technology Indian Institute of Technology
Hyderabad, Hyderabad,
Email: ee12b1024@iith.ac.in Email: ee12b1005@iith.ac.in
Abstract—In India about 70% of overall electricity gener-
ation is based upon thermal energy. Huge amounts of non
renewable sources such as coal are being consumed for the
production of thermal power which leads us to degradation of
the environment. Hence it is imperative to shift to renewable
sources like solar energy for the generation of electricity. At
present scenario generation using solar power is perceived be
too costly. Installation of solar equipment for the typical house
hold is difficult as enough technical awareness is lacking in
choosing suitable components with appropriate ratings. In this
paper a mathematical model is suggested, which can perform
techno-economical analysis of off-grid rooftop solar system. Two
detailed illustrative examples are mentioned using the realistic
load specifications and cost of solar technologies available in
Indian markets. For a typical hostel building having 192 rooms
in 6-floors, the cost of rooftop solar PV system is about Rs. 1.33
Crores, with a life time profit of Rs. 1.95 Crores (in 25 years).
The payback period is 10 years with reduction in CO2 emissions
of 4490 tons. This paper although using a conservative model,
is based on prevailing market conditions, makes a compelling
case for consumers shifting from utility grid to rooftop solar PV
systems.
Keywords—Solar Power, Rooftop PV, Mathematical Model, cost
benefit analysis, payback period, environmental impact
I. I NTRODUCTION
As of November 2015, the installed generation capacity
of India is 281 GW of which, the thermal, hydro, nuclear,
and renewable capacities are about 195GW, 43GW, 6GW and
37GW respectively [1]. The renewable installed capacity is
at 13.2%, where as the thermal installed capacity is 69.3
%, which is a major source of carbon dioxide emissions in
India. For reducing the CO2 emissions fuel substitution by
the way of increased use of renewable energy sources is an
attractive option. Solar power is the one of the cleanest form
of renewable energy available, and it can be converted and used
in different forms, such as heat and electricity to help power
homes and business. Solar panels, also known as PV modules,
contain photovoltaic (PV) cells made from silicon that trans-
form incoming sunlight into electricity. “Photovoltaic” means
electricity from light (photo = light, voltaic = electricity).
The conventional view that the solar photovoltaic electricity
is more expensive compared with the grid provided electricity
at retail level [2], is being challenged by the continuous trend
of reducing the cost of solar technologies and raising cost of
fossil fuels.
978-1-5090-0128-6/16/$31.00
2016
c IEEE
Pradeep Yemula
Department of Electrical Engineering
Indian Institute of Technology
Hyderabad,
Email: ypradeep@iith.ac.in
Fig. 1. Block Diagram of off-grid rooftop solar system
Typical household receives power from the local utility
at the prices pre-determined in the tariff plans of the utility.
However, due to lack of sufficient generation capacity there are
shortages and the utility may have to resort to load shedding
leading to power cuts for the end consumers. Moreover, as
the prices of fossil fuels increase, the electricity tariffs are
also raising. In this scenario, some consumers may want to
explore and shift to alternate sources for meeting their demand.
However, shifting to solar power requires upfront investment.
The economic benefit has to be justified in order to convince
the consumer to make the initial investment. A normal con-
sumer may not have the technical and commercial knowledge
to install and operate the solar equipment. Consumer has
to get expert advice from third party companies which may
not be reliable and customized to specific requirements. The
concept of rooftop PV has been successfully demonstrated
in a project under the Italian PV rooftop programme [5]. In
that project, the architectural system design, data acquisition
system has been presented, along with the calculation of
payback time and economic profitability of the project. This
work carries out a similar study as per the environmental
and economical conditions in India. Technical and financial
aspects of solar PV system in space constrained urban areas of
Bangladesh has been presented in [8]. The benefits of off-grid
rooftop solar PV system can be summarized as follows. (i) the
consumer gets uninterrupted power supply (ii) the return on
investment is better than other alternative sources (iii) reduces
dependency on the utility grid, (iv) avoid use of polluting
diesel generator set, (v) low maintenance, and no need to
purchase fuel regularly, compared to diesel generator set (vi)
only one time initial investment is needed and power generated
is practically free over the life time, and (vii) protection
from raising conventional power tariffs. The approach used
in that study is to consider grid connected PV system where
a fraction of energy is generated from renewable source. The
PV generation capacity is estimated from the space availability,
where as in this paper, we consider techo-economic aspects off
grid solar PV system which has to support all the demand.
The objective of this study is to present a methodology
for techno economic analysis of roof top solar PV to estimate
the benefits of consumers switching over from grid to solar
PV. In this work, a tool is developed to calculate number of
solar panels required, number of batteries required and also
in this paper we did cost analysis of the solar equipment
and compared it with the cost of conventional electricity. The
overall block diagram of the off-grid rooftop solar system
is shown in Fig. 1. Solar power is first converted into DC
power when the sunlight incident on the solar panels. The DC
power generated is then controlled using a charge controller
to maintain constant voltage. This DC power is stored in the
battery. Then inverter converts this stored DC power into AC
power and then this power is then connected to the load.
II. M ATHEMATICAL M ODEL FOR ROOFTOP S OLAR
P OWER P LANT
Appropriate sizing of the rooftop PV system in terms
of number of PV panels and the sizing of the battery are
important aspects of the design. In this section we present a
mathematical model, in which we develop the expressions for
sizing and number of solar panels and batteries as a function
of load requirement. The model includes both the technical
and economical analysis.
A. Technical Analysis
1) Calculation of number of solar panels required: The
method used in this work is based on the outline described
in [7]. We begin by estimating the total energy consumed per
day based on the survey of the usage of different types of the
load. We need to know the rating and quantity of each type of
load, how many hours they are used. This information can be
obtained based on the historical usage data from the load side.
The energy per day can be calculated as shown in equation (1)
PN
U i Pi n i
Eday = i=1 KwH (1)
1000
Where i is the index of each type of load such as fan,
lights, TV etc, Ui = number of hours device type i is used
per day, Pi = power rating of ith device type, ni = number of
devices of ith type. In order to meet the above requirements
completely with solar power generation, the efficiency and de-
rating factors should also be considered. Thus, the total PV
generation capacity required can be calculated as
Eday
Ppv = Kw (2)
Sd ∗ d
where, Sd = average number of hours the sun shines at the
site, d = de-rating factor, which takes into account the effects
of efficiency and changes in the solar generation during the
day. The typical values of Sd , and d are 7 hours and 80%
respectively. The average number of hours of availability of
sunlight per day for conversion to electricity in the city of
Hyderabad is estimated to be 7 hours based on the weather
information available at [4]. From this the number of solar
panels required can be calculated as shown in eq (3)
NP = Ppv /Po (3)
where, Po is power output capacity of each panel.
2) Calculation of number of batteries required: Since the
variations in load power and the variations in the solar power
generation may not match at a given time, we need a battery
storage system to supply or absorb these variations. In the
design of the system, the battery along with inverter system,
will be placed in between the rooftop PV panels and the load.
The method used in this work is based on the outline
provided in [6] to determine the battery size and number. The
number of batteries Nbat can be obtained as follows
Eday ∗ nd
Nbat = (4)
Vbat ∗ Ih ∗ DOD
where, nd is the number of days of back up power
required,Vbat is the voltage rating, Ih is the ampere-hour rating
and DOD is the depth of discharge of the battery system.
Thus, equations (1)-(4) represent the mathematical model for
choosing the number of PV panels and batteries from the
technical requirement of the load.
3) Calculation of size of inverter: Based on the block
diagram shown in Fig. 1 the capacity of inverter is determined
by the expected peak demand of the load. The peak demand
of the load is estimated by using the relation between the
connected load and the diversity factor (DF) of the load where
diversity factor is ratio of maximum demand to total load
connected. PN
Pi n i
Pinv = i=1 (5)
DF
B. Economic Analysis
1) Profit from Rooftop Solar System: The objective of this
part of the study is to determine the total economic profit
derived by shifting from grid power to rooftop solar power.
We begin by first finding out the total cost of both the above
options.
Let Cgrid be the cost of power from grid, Cpv be the cost
of rooftop solar system considering the subsidy. Assuming a
life time of L years, and cost of unit of energy charged by the
utility as Cu , the cost of power from the grid can be calculated
as
Cgrid = 365 ∗ Eday ∗ Cu ∗ L (6)
The rooftop solar system consists of four major compo-
nents, namely, PV panels, battery storage system, inverter,
and charge controller. Thus the total cost of the rooftop
solar system without considering any subsidy (Cpv ) can be
calculated as
Cpv = (Cpanel + Cbat + Cinv + Cctrl ) (7)
The procedure to avail subsidy for roof top solar power
system through NABARD is detailed at [3]. As per the proce-
dure the subsidy considered is 40%. Considering a percentage
subsidy by government as Psubsidy the total cost of the rooftop
solar system Cpv is
Cpv = (1 − Psubsidy ) ∗ (Cpv ) (8)
Where Cbat = Nbat ∗cost per battery
and Cp = Np ∗ cost per PV panel.
Thus the overall profit achieved by shifting from grid to
rooftop solar is
P rof it = Cgrid − Cpv (9)
The benefit of shifting to rooftop solar includes indepen-
dence from the grid, and thus the user can avoid power cuts.
As the fossil fuels are depleting, there is a high probability
that the prices of fossil fuels will increase in long term. This
will further lead to the increase of cost of grid power. In the
equation 9, it is assumed that the discount rate is equal to the
inflation rate and hence the notion of present value of the future
payment to the grid utilities is not considered as the effect of
these two rates will cancel each other. However, it should be
noted that this assumption is conservative, as the inflation in
fossil fuel prices is typically more than the discount rates. It
can also be noted that this is right time for the consumers
to shift to rooftop solar, to take advantage of the subsidies
available.
2) Calculation of Pay Back Period: Payback period is
defined as the time required for the amount invested in an
asset to be repaid by the net cash outflow generated by the
asset. In the case of off-grid rooftop solar, the benefit is in
terms of savings derived out avoiding the purchase of power
from the grid. We need to find the time required to make the
savings equal to the amount invested. Mathematically this can
be expressed as
Eday ∗ Cu ∗ 365 ∗ Ypay−back = Cpv (10)
where, Ypay−back is the payback period in years. By rearrang-
ing the above equation, we can calculate the payback period
as follows
Cpv
Ypay−back = (11)
Eday ∗ Cu ∗ 365
C. Environmental Impact
According to the CO2 baseline database [9] prepared by
central electricity authority (CEA) under the ministry of power,
Government of India, the weighted average emission factor
for thermal power plants is 0.82 Tonnes of CO2 per MWh
of energy generated. Using this factor we can determine the
reduction of CO2 emission on account of shifting to rooftop
solar for a lifetime of 25 years as shown in eq(12)
CO2emission = Eday ∗ 0.82 ∗ 365 ∗ 25/1000 t/M W h (12)
III. D ESIGN OF S IMULATOR
The mathematical model for technical as well as economic
analysis described in section II, has been incorporated into a
software tool, which helps the user in determining the size
of the rooftop system and calculates economic benefits. The
software tool is developed using Matlab platform, but it can
be used as a standalone graphical user interface. This interface
will take the inputs such as the amount of load connected
to the batteries and depending upon the load requirements it
calculates the number of solar panels and batteries required for
that specified load and generates an output showing the design
parameters of the rooftop solar system.
The interface of the simulator is conveniently divided into
five sections, namely (i) load parameters (ii) battery parameters
(iii) economical parameters (iv) simulation (v) solution output.
The user after filling up the first three section based on their
personal specifications, can run the simulation and obtain the
output. Complete technical, economical and environmental
analysis is displayed in the output. The interface of the
simulator and the output generated are shown in Fig.2 and
Fig.3 respectively.
IV. I LLUSTRATIVE E XAMPLES
In this section, two illustrative examples are mentioned,
namely (i) typical household and (ii) typical student hostel
building. The technical, economic and environmental analysis
is carried out for these cases and presented as examples. Some
of the economic parameters considered in this study, are as
per the information available from markets in India, which are
summarised as follows. The price of a 12V, 220AH battery is
considered to be Rs. 12,000 [11]. The price of 250 W solar PV
panel is considered as Rs.13,100 [10]. The price of inverter
is considered as 7.40 Rs./watt [13]. The price of the charge
controller is considered to be Rs.4,500 [12].
A. Typical Household
The equipment and the amount of load considered for this
example is shown in the Fig.2. By using the mathematical
models mentioned in section II, we get following results.
• Total energy consumed per day is 9.57 KWH
• Power rating of the solar panels Ppv = 9.57/(7*0.8) =
1.7 KW
• Number of solar panels required with power rating of
250 W each = Npv = 1.7*1000/250 = 6.83 ≈ 7
• Cost of each solar panel of 250watt = 13,100 Rs. Total
cost of solar panels = 7*13100 = 91,700 Rs. → A
• Number of Batteries (of rating 12 V, 220 A-h each)
required to have backup for 3days = Nbat = 9.57 * 3
* 1000 / (12 * 220 * 0.5) = 21.75 ≈ 22.
• Total cost of batteries = 22 * 12,000 = Rs. 2,64,000
→B
• Cost of charge controller= 4,500 Rs → C
• Inverter size = installed capacity / diversity factor =
1025/1.7 = 603 W
Fig. 2. Interface of Solar Simulator

• Cost of inverter = 603 * 7.4 = 4,462 Rs → D

• Total cost of whole equipment = A + B + C + D =
3,64,662 Rs
• Now, consider the subsidy as 40 % [3]
• Total cost of whole equipment after subsidy =
3,64,662 - 1,45,865 = 2,18,797 Rs
• Total electricity bill for 25 years without using solar
power considering Rs. 6 per unit = 5,23,957 Rs
• Total profit using solar power = 5,23,957 - 2,18,797
= 3,05,160 Rs in 25 years
• Total CO2 emission reduction in 25 years =
9.57*0.82*365*25/1000 = 71.6 Tons
• Payback period = (2,18,797 / 5,23,957) * 25 = 10.44
≈ 10.5 Years.
Fig. 3. Output exported in text format

B. Typical Hostel Building

In this example we considered our hostel building which
consists 192 fans, 192 lights, 4 washing machines, 192 com-
puters, 6 fridges, 2 televisions, and other loads which operate
for 12 hrs, 8 hrs, 20 min, 10 hrs, 12 hrs, 5 hrs and 10 hours
respectively.
By using the formulae mentioned in section II
• Total power consumed per day = 600 KWH
• Power rating of the solar panels Ppv = 600/(7*0.8) =
107.14 KW
• Number of solar panels required with power rating of
250 W each = Npv = 107.14*1000/250 = 428.57 ≈
429
• Total cost of solar panels = 429*13100 = 56,19,900
Rs. → A
• Number of Batteries (of rating 12 V, 220 A-h each)
required to have backup for 3days = Nbat = 600 * 3
* 1000 / (12 * 220 * 0.5) = 1363.63 ≈ 1364.
• Total cost of batteries= 1364 * 12,000 = 1,63,68,000
Rs → B
• Cost of charge controller = 4,500 Rs → C
• Inverter size = 59325/1.7 = 34,897 W
• Cost of inverter = 34,897 * 7.4 ≈ 2,58,238 Rs → D
• Total cost of whole equipment = A + B + C + D =
2,22,50,638 Rs
• Now, consider the subsidy as 40 % [3]
• Total cost of whole equipment after subsidy =
2,22,50,638 - 89,00,255 = 1,33,50,383 Rs
 • Total electricity bill for 25 years without using solar
power considering Rs 6 per unit = 3,28,42,882 Rs [1]
• Total profit using solar power = 3,28,42,882 -
1,33,50,383 = 1,94,92,499 Rs in 25 years
[2]
• Total CO2 emission reduction in 25 years =
600*0.82*365*25/1000 ≈ 4490 Tons
• Payback period = (1,33,50,383 / 3,28,42,882) * 25 = [3]
10.16 ≈ 10 Years.
V. O BSERVATIONS AND C ONCLUSIONS [4]
From the mathematical model presented in Section II and
the illustrative examples detailed in Section IV, the following [5]
interesting observations can be made:
• For a typical household, the cost of rooftop solar PV
system is about Rs. 2.19 Lakhs, with a life time profit [6]
of Rs. 3 Lakhs (in 25 years). The payback period is
10.5 years with reduction in CO2 emissions of 71.6
[7]
tons.
• For a typical hostel building, the cost of rooftop solar [8]
PV system is about Rs. 1.33 Crores, with a life time
profit of Rs. 1.95 Crores (in 25 years). The payback
period is 10 years with reduction in CO2 emissions
of 4490 tons.
[9]
• The batteries are the most dominating components in
the overall cost of the system, taking up 72.4 % of
cost, while the solar panels and the inverter systems [10]
cost, 25.1% and 2.5% respectively.
• In this study the number of days of back-up was [11]
considered to be 3 days which resulted in relatively
[12]
higher share of batteries in the overall cost.
• battery size is important and effects the overall cost. [13]
So reducing the number of days of back-up will reduce
the cost and may prove to be more profitable.
• It should also be noted that the feasibility of the
rooftop solar system, mainly also depends on the sub-
sidy provided by the government which is currently at
40%. This policy has to continue for keeping the solar
power feasible, until the cost of solar technologies
reduced further.
• The future research in this area shall continue in
analysis of grid connected root top PV, extending the
model for provision of selling power to the grid, etc.
• The mathematical model considered is conservative as
inflation rate and discounting rate are considered same.
Also as mentioned the battery back-up is considered
for 3 days. In spite of these assumptions, the economic
feasibility of end consumers switching to rooftop solar
has been demonstrated.
• Thus, we can conclude that this is the right time to
switch over to rooftop solar systems. Moreover, there
is benefit to the environment as well.
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