How Solar Panels Reduce Your Monthly Electricity Bill?

Published: 08 Sep, 2025 | By Solar

In the past few years, if you have felt that your electricity bill has been increasing and you’re still trying to blame it on something, but nothing has been a good enough explanation. You are not alone, electricity bills have been rising across the country, all over the world and especially in tier 1 and tier 2 cities and none of us have a clear explanation yet.

This is why the majority of people have been leaning towards alternate solutions, and the best one yet is opting for solar energy, it is not just ecofriendly, it is also way more cheaper and reliable, considering the power outages situations in those areas.

But how is it making a difference and the most important thing people wonder about is “how much will solar panels reduce my electric bill”, let's talk about it now.

First, How Do Solar Panels Actually Work?

Lets understand this with our most favourite metaphor, now see solar panels as leaves with chlorophyll, now when the sunlight will fall on them, they’ll create food, and in our case food for the electronics, as in our lights, fans, television or whatever you’ve got in your house.

But why do solar panels generate electricity? That is not very important here, all we need to know is that they have their own photovoltaic cells instead of chlorophyll, which do their scientific stuff and generate electricity for you.

Now here’s the important part:

• If your solar panels produce exactly as much electricity as your home uses, you don’t need to buy any from the electricity board for that day.
• And if they generate more than what you actually need while on an on-grid solar system, the extra power gets sent to the grid, that is your electricity board and you get credits for doing that and it is also called net metering.
• But on an off-grid solar system, you’ll still generate more electricity than needed. But here in this case it won’t go to the grid or your electricity board but will be stored in the batteries for your future usage.

So, in simple words,now you’ll not be using someone else’s electricity and paying for it, but you’ll be using your own and saving money.

How Do Solar Panels Lower Electricity Bills?

Let’s keep it really simple, right now, you’re paying for all the amount of electricity you’re using (kilowatt-hour), which is fair and as you should. But when you install solar panels, a big chunk of those units comes free from the sun. That means:

• You buy less power from the grid.
• You pay less in your monthly bill.

For example, say your monthly bill is ₹3,000. If solar panels cover 70% of your needs, your bill could drop to around ₹900. And in months where you use less power or get extra credits from net metering, it can go even lower. And that’s your answer to how solar panels reduce electric bills.

How Much Can You Really Save?

The electric bill after solar panels and savings aren’t the same for everyone, they depend on:

• Your power usage – Homes with higher usage save more because they replace more expensive units with solar energy.
• System size – A 5kW system will save more than a 2kW system, because it will be generating more without any increase in usage.
• Location – Cities like Jaipur, Pune, Lucknow, Bhopal, and Nagpur get more daily sunlight because of their weather situations, which means more daily power production.
• Type of system – On-grid systems usually give better savings because of net metering.

On average, people save between 50% to 90% on their bills. Some even bring their bill down to almost zero during certain months.

What’s The Average Electric Bill With Solar Panels?

Here’s a rough, real-world idea:

These are average figures people have seen after installing solar at home. Your actual savings may be higher or lower depending on your setup and habits.

Other Benefits Of Using Solar Panels For Home

While saving money is the biggest draw, there are a bunch of other plus points:

• So, once you get solar panels your electricity is free for at least 20-25 years, without any worries.
• Unlike your other “friend”, solar panels are very low maintenance and need no or almost no extra care.
• You won’t remember what power cuts are… especially if you have an off-grid or hybrid system.
• You are also saving the world by using an eco-friendly resource, so you also feel morally good.
• Your house even gets an upgrade in value, as houses with solar panels are seen as people with better degrees.

How Quickly Can You Recover Your Investment?

A lot of people worry about the initial cost. Yes, you do have to spend money upfront, but remember, your electricity savings start from the first month.

Most homeowners recover the cost of their system in 4–6 years through savings on their bills. After that, the electricity you produce is basically free for the rest of the system’s life.

Example: Monthly Savings

Let’s say you install a 3kW solar system:

• Cost: Around ₹1.5 lakh (before subsidy).
• Daily generation: 12–14 units.
• Monthly generation: 360–420 units.
• Electricity cost: ₹7 per unit.

That’s roughly ₹2,500–₹3,000 saved every month. In 5 years, you’ve saved ₹1.5–₹1.8 lakh, the same as the system cost. And the system will still run for another 20 years or more.

Government Subsidy Makes It Easier

The government’s PM Surya Ghar: Muft Bijli Yojana gives subsidies of up to 40% for home solar systems. This means your upfront cost becomes much lower.

For example, that ₹1.5 lakh system could come down to just ₹90,000–₹1 lakh after subsidy.

A good installer like Spectra Solar Power can help you apply for the subsidy, handle all the paperwork, and make sure you get the benefit.

Price Of Solar Panels For Home In India

The solar panel for home price in India depends on system size, brand, and type:

• 1kW: ₹55,000–₹75,000
• 3kW: ₹1.5–₹2 lakh
• 5kW: ₹2.5–₹3 lakh

These prices include the panels, inverter, mounting, wiring, and installation. With subsidies, the cost comes down significantly.

Who To Choose Then?

If you’re serious about saving money and switching to clean energy, Spectra Solar Power , offers:

• Expert solar panel installation for homes of all sizes.
• High-quality solar system for homes with long warranties.
• Affordable options to suit your budget.
• Full support from consultation to subsidy claim.

Our goal is simple, to help families in smaller cities get reliable, low-cost electricity without the headache of dealing with complicated processes.

Final Word – Let The Sun Pay Your Bills

If your monthly electricity bill feels too high, solar power is the best long-term fix. From the first month, your monthly electricity savings start showing. In a few years, you will recover your investment. And for the next two decades or more, you enjoy free electricity while doing your bit for the environment.

With companies like Spectra Solar Power making installation simple and affordable, there’s never been a better time to switch.

The sooner you start, the sooner you save.