residential
3 kW Residential Solar
Three kilowatts is the most consequential number in Indian rooftop solar, and not because of anything technical. It is exactly where the central subsidy stops.
Why 3 kWp is the efficient point on the subsidy curve
PM Surya Ghar pays Central Financial Assistance in two bands: ₹30,000 per kWp for the first 2 kWp, and ₹18,000 for the third kWp or part of it. Above 3 kWp it pays nothing.
| Capacity | CFA |
|---|---|
| 1 kW | ₹30,000 |
| 2 kW | ₹60,000 |
| 3 kW | ₹78,000 |
| 5 kW | ₹78,000 |
| 10 kW | ₹78,000 |
So 3 kWp is the largest system on which every kilowatt is subsidised, and the point at which the household ceiling of ₹78,000 is reached. It is not a cap on what you may install — it is a cap on what the Government of India will contribute.
The money is paid into your bank account after commissioning, not to the installer, and each rooftop is eligible once.
What the government's benchmark is — and what it is not
MNRE fixes a benchmark cost of ₹50,000 per kW for the first 2 kW and ₹45,000 for each additional kW. For a 3 kW system that is ₹1,45,000, and the subsidy is 60% of the first band and 40% of the second.
The benchmark is not a price. It is not a cap, not a market rate, and not what a system costs to build. Its only job is to make the subsidy a definite number. This is the single most common misunderstanding a customer arrives with: they read "60% of ₹50,000 per kW", compute a system price from it, and then find that no real quotation matches — so every quotation looks inflated and every installer looks dishonest.
Real prices sit above the benchmark, and they vary with things the benchmark does not describe: module technology and make, inverter make, the height and complexity of the structure, cable run length, roof type and access, and whether an elevated structure or civil work is needed.
What a 3 kW system suits
A 3 kW system fits a household consuming roughly 300 to 450 units a month.
Madhya Pradesh's East DISCOM publishes its own rooftop calculator, and states its generation assumption as 5 units per kW per day. On that basis a 3 kW array produces on the order of 450 units in a month. Real output varies with season, orientation, shading and soiling — the monsoon months are materially below the annual average and the clear winter months above it — so a year should be read as a year, not as twelve copies of one month.
Which units it removes, and why that is the whole argument
MP's domestic tariff (MPERC Schedule LV-1.2, FY 2026-27) is telescopic:
| Slab | Rate |
|---|---|
| Up to 50 units | ₹4.71 per unit |
| 51 to 150 units | ₹5.67 per unit |
| 151 to 300 units | ₹7.05 per unit |
| Above 300 units | ₹7.24 per unit |
Solar does not remove an average unit. It removes units from the top of that ladder downward — so the first unit it displaces is worth ₹7.24 and the last is worth ₹4.71, a difference of more than 50%.
A household at 350 units a month is paying about ₹2,942 on an urban connection. Of that, roughly ₹2,222 is energy and ₹720 is fixed charges. A 3 kW system attacks the expensive end of the energy component first, which is why the saving in the first year is much larger than "units generated × average rate" would suggest.
Fixed charges — the part most pages get wrong
MPERC was asked in the FY 2026-27 tariff proceedings to stop charging fixed charges on solar households, and declined — its reasoning being that fixed charges recover the cost of maintaining the distribution network, are not linked to energy consumption, and a solar household is still connected to that network and relying on it for backup, for seasonal variation and for net metering itself.
But MP computes that charge in an unusual way. Above 150 units, the fixed charge is levied per 0.1 kW of deemed load, and deemed load is derived from consumption at 15 units per 0.1 kW. Because the tariff computes the charge from consumption, RG-39's Regulation 8A(5) directs that for a net-metered consumer it be computed on units imported from the grid.
The practical consequence is that in Madhya Pradesh the fixed component follows your imports down as well — and a household that drops below 150 imported units moves back onto a flat per-connection charge. Check this on your first post-commissioning bill; it is the line most worth verifying.
What remains true regardless: the bill does not reach zero. Any projection that shows zero has ignored fixed charges, or assumed an export credit the settlement rules do not pay at retail rates.
Net metering at this size
A 3 kW system is comfortably inside the band where the regulation is most generous. Rooftop systems up to 10 kW that are complete in all respects are deemed accepted without any technical feasibility study, and the DISCOM must carry out the matching enhancement of your sanctioned load at the same time. For systems up to 5 kW, the cost of strengthening the distribution network — including the distribution transformer — sits in the DISCOM's revenue requirement and is not charged to you.
The ₹1,000 processing fee is waived for PM Surya Ghar applicants, and no meter-testing fee may be charged. The Letter of Approval must issue within 30 days, and after your installation certificate is submitted the DISCOM has 15 days to sign the agreement, install the meter and commission. Delay without just cause carries ₹500 per day, payable to you.
Two limits still apply: your system may not exceed your sanctioned load, and a consumer with pending arrears is not entitled to net metering until they are cleared.
What actually moves the price
- Modules — make, technology and warranty terms.
- Inverter — make, and whether a hybrid unit is specified.
- Structure — a standard 600 mm-clearance mount is one thing; an elevated structure with the 8 feet of clearance required for CFA eligibility is another, and it carries both steel and civil cost.
- Roof type and access — RCC, sheet over trusses, and a difficult approach are three different labour numbers.
- Cable run — distance from array to inverter to panel.
- Wind zone — the structure is designed for the wind zone of your location at a factor of safety of 1.5, and that is not the same steel everywhere in MP.