Why Factories Should Switch to Solar: An ROI Analysis

Why Industries Must Act Now

For industrial units, electricity is often the single largest variable operating cost, accounting for 20–35% of total overheads in manufacturing. A well-designed rooftop solar plant can eliminate 60–80% of this cost permanently.

Accelerated Depreciation (AD) Benefit

Under Section 32 of the Income Tax Act, solar power plants installed by industrial units are eligible for 40% Accelerated Depreciation in the first year. For a ₹50 lakh solar plant in the 30% tax bracket, this translates to a ₹6 lakh immediate tax saving.

ROI Calculation Example

1. System size: 100 kW (covers ~60% of factory load)
2. Installation cost: ₹45 lakhs
3. AD tax saving: ₹5.4 lakhs (Year 1)
4. Annual electricity savings: ₹12–15 lakhs
5. Effective payback: 2.5–3 years

"Industrial solar payback periods have dropped from 7 years in 2018 to under 3 years in 2026, driven by falling panel costs and rising grid tariffs."