By: Shreyas Gowda, Senior VP- Sales & Operations at Oorjan Cleantech
After nearly a decade of steady decline, solar module prices have begun to rise in 2025–2026, marking a shift in the industry’s pricing cycle. Globally, module prices are estimated to be 15–18% higher than their late-2024 lows, with some manufacturers increasing prices by up to 20–30% to restore profitability. In India, module costs now range between ₹22 to ₹45 per watt, depending on the technology—such as PERC or newer, more efficient TOPCon modules. This increase is not solely due to supply chain constraints but reflects a broader market correction. Manufacturers are moving away from unsustainable pricing, while demand for high-efficiency modules and evolving global trade policies are also contributing to the uptick.
System Costs: Still Within Reach
Despite the rise in module prices, the overall cost of installing solar systems remains relatively stable. This is because modules typically account for only 50–60% of total system costs, with the rest attributed to inverters, mounting structures, and installation. In 2026, residential rooftop solar systems in India cost approximately ₹38–65 per watt, while commercial and industrial systems benefit from economies of scale, bringing costs down to ₹32–45 per watt. For homeowners, a 5 kW system costs around ₹1.85–₹2.1 lakh after subsidies, making solar more accessible than ever. Government initiatives such as the PM Surya Ghar Yojana and net metering policies continue to play a crucial role in keeping solar financially viable.
Return on Investment: The Real Value Driver
Affordability in solar is best measured through return on investment (ROI), and on this front, solar continues to perform strongly. In India, residential systems typically offer a payback period of 2.5 to 6 years, depending on electricity tariffs and system efficiency. A standard 5 kW system can generate approximately 6,000–7,500 units annually, significantly reducing or even eliminating electricity bills. With solar panels lasting 25–30 years, users can enjoy decades of low-cost or virtually free electricity after recovering the initial investment. This long-term financial benefit is a key reason why solar adoption continues to grow despite price fluctuations.
Rising Electricity Tariffs Strengthen the Case
One of the biggest factors improving solar ROI is the steady rise in grid electricity costs. Over the past four years, electricity tariffs in many Indian cities have increased by 20–35%, placing greater financial pressure on households and businesses. As grid power becomes more expensive, solar energy offers a hedge against future price hikes. This dynamic ensures that even if upfront solar costs increase slightly, the long-term savings potential continues to improve.
Commercial Adoption: Faster Payback, Higher Savings
For commercial and industrial users, solar remains an even more compelling investment. Larger installations typically above 100 kW—benefit from lower per-unit costs and higher energy consumption, resulting in faster payback periods of 3–5 years. Businesses can install systems at around ₹35–40 per watt, significantly reducing operational costs while also strengthening their sustainability credentials. In a competitive business environment, solar is increasingly seen not just as an energy solution but as a strategic financial decision that enhances profitability and ESG performance.
The Bottom Line: Affordable, But Strategically Evolving
Solar energy in 2026 is still highly affordable, but the narrative has evolved. It is no longer just about the lowest upfront cost; it is about long-term value, stability, and energy independence. While module prices have risen modestly, the overall economics remain attractive due to government support, rising electricity tariffs, and improved system efficiencies. For both homeowners and businesses, the conclusion is clear: solar continues to offer strong returns, and delaying adoption in hopes of falling prices may not be the most cost-effective strategy.