Case Studies
A 5kW Residential Solar Plant Achieves 98% Bill Reduction (LA-1A) ( Mr.Sai)
This case study analyzes the financial and environmental benefits of a 5kW rooftop solar power plant installed at a private residence near Sowcarpet, Chennai. The homeowner was facing high electricity bills due to significant consumption in the upper slabs of TANGEDCO's LA-1A (Domestic) tariff.
By investing ₹3,00,000 (with no subsidies), the homeowner reduced their bi-monthly electricity bill from ₹9,775 to just ₹150—a 98% reduction. The system was strategically sized at 5kW to maximize savings by wiping out 100% of the home's energy charges while remaining bills are due to TANGEDCO's network charges. This smart investment yields an annualized ROI of over 19% and is projected to achieve a full payback in just 4 years and 11 months.
Client:
A family residing in a multi-story house near Sowcarpet, Chennai, with modern appliances.
The Challenge: The Domestic "Tariff Trap"
The home's energy profile, which included multiple air conditioners, a water pump, and other standard appliances, resulted in high bi-monthly consumption.
Energy & Cost Profile Before Solar:
- Average Bi-monthly Consumption: 1,300 units (kWh)
- Average Monthly Consumption: 650 units (kWh)
Under TANGEDCO's telescopic LA-1A tariff, this consumption was heavily penalized, with the f inal 300 units billed at the highest slab rate of ₹11.00/unit.
Breakdown of a Typical Bi-monthly Bill:
- Energy Charges: ₹9,625
- Fixed Charges (Bi-monthly): ₹150
- Total Average Bi-monthly Bill: ₹9,775- Annual Electricity Cost: ₹58,650
The homeowner sought a long-term solution to eliminate this significant, recurring household expense.
A 5kW on-grid solar system was installed under TANGEDCO's net-metering policy. This system was sized to perfectly match the home's annual consumption.
System Specifications:
• Plant Capacity: 5 kWp
• System Type: On-Grid (Net-Metered)
• Location: Sowcarpet, Chennai
• Projected Annual Generation (Year 1): 7,650 units (kWh)
• Average Bi-monthly Generation: 1,275 units (kWh)
The Strategic 5kW Advantage: Avoiding Network Charges
The homeowner was advised to install a 5kW system to meet his energy demand. As per the TNERC guidelines, domestic systems of 10kW and below are 80% EXEMPT from paying "Network Charges."
By staying under this 10kW threshold, the homeowner avoids the Rs.1.22/unit charge on gross solar generation, which would have cost them an additional approx. ₹10,000 per year. This makes the 5kW system's payback significantly faster.
The project was a direct capital investment by the homeowner.
Investment Breakdown:
• Total Project Investment (5 kW @ ₹60,000/kW): ₹3,00,000
Results: A 98% Bill Reduction
The system's 1,275 units of bi-monthly generation almost perfectly offset the 1,300 units of consumption. The homeowner is now only billed for the net difference.
Before vs. After: A Bi-Monthly Cost Comparison
This table tracks the payback on the ₹3,00,000 investment, with no subsidy
Assumptions:
• Total Investment: ₹3,00,000
• Grid Tariff Escalation: 5% per year (A conservative estimate for tariff hikes).
• Solar Degradation: 0.8% per year (Standard panel efficiency loss).
Payback Period Analysis
At the beginning of Year 5, only ₹54,038 of the initial investment remains to be recovered.
• Payback Calculation: (₹54,038 / ₹68,079) × 12 months = 7.93 months.
• Total Projected Payback Period: 4 Years and 8 Months.
1. High Financial Return: An annualized, inflation-proof ROI of 19.3% makes this a high performing, low-risk asset for the homeowner.
2. Total Bill Elimination: The 98% bill reduction (from ₹9,775 to ₹410) effectively frees the household from electricity costs.
3. Strategic Cost Avoidance: By sizing the plant at 5kW, the owner smartly avoided TANGEDCO's 80% network charges, accelerating the payback period.
4. Hedge Against Inflation: The family is now protected from future TANGEDCO tariff hikes.
5. Environmental Contribution: The 5kW plant is a significant green asset.
o Annual CO2 Reduction: 5kW × 650 kg CO2/kW per year = 3,250 kg (3.2 tonnes) of CO2 emissions avoided per year.
o Environmental Equivalent: This is equivalent to planting over 100 mature trees annually.
This 5kW installation is a model of a smart, subsidy-free residential investment. It demonstrates that a correctly-sized solar plant can not only eliminate high domestic electricity bills but also provides a rapid and secure financial return.
