Differences Between On-Grid and Off-Grid Solar Systems: Which One to Choose?

On-Grid and Off-Grid Solar Systems

Differences Between On-Grid and Off-Grid Solar Systems: Which One to Choose?

India has seen a massive jump in solar energy rising up to 84.28 GW in May 2024, from a mere 1.60 GW in 2013. This 31-fold increase in India’s solar power heavily relies on commercial solar installations. On-grid and off-grid solar systems constitute 15.64 GW while the rest are utility projects (Source: MNRE report on Solar Installation Progress). 

The government is pushing rooftop installations as the utility sector is saturated. But before you picture yourself saving on sun-powered rooftop plants there is a crucial choice to make: on-grid or off-grid? Both have their perks and quirks, so let us break them down to see which one fits your needs.

The on-grid solar system stays connected to the utility grid. During the day, your solar panels generate electricity for your home and save the excess electricity to the grid. If you are making more electricity than you need, you can sell it back to the grid. At night, or when your panels are not producing enough, you simply buy electricity from the grid as normal. It is a win-win for you and the environment.

On Grid Solar System

What is an Off-Grid System?

Off-grid systems operate independently of the utility grid. Your solar panels act like a generator during the day, while your battery bank acts as a giant storage unit. Solar panels generate electricity, which is stored in a battery bank for use when the sun is not shining. It is all about creating a self-contained solar ecosystem to power your home, ideal for remote locations without grid access.

off grid solar system

Differences Between Off-Grid and On-Grid Solar System

To help you understand which system suits your needs better, let’s compare their key features side by side. Below is a comprehensive differences between off-grid and grid-tied solar energy system:


On-Grid System

Off-Grid System

How It Works

It stays connected to the electricity grid, generates power, sends excess to the grid, and draws from the grid as needed.

Independent of the electricity grid. Generates and stores power in a battery bank for later use.

Surplus Power Management

Excess power is sent to the grid through net metering in an on-grid system.

Excess power is stored in a battery bank for later use in an off-grid system.

Backup Power Source

The grid acts as a backup when solar production is insufficient.

The battery bank serves as the backup power source.

Net Metering

A net meter tracks electricity flow between the home and the grid; it reduces electricity bills significantly.

Net metering is not applicable. The solar system stays independent of the utility grid. 


The on-grid system requires minimal maintenance. You need to wash and remove dirt from panels periodically. 

The off-grid system requires regular maintenance of the battery. The maintenance of panels can be similar to the on-grid system.

Grid Availability

Suitable for areas with reliable electricity supply from DISCOM.

Suitable for remote areas without grid electricity access.


You can install an on-grid solar system with a lower upfront cost. It offers a faster return on investment due to the availability of solar subsidy in India and net metering.

Need to bear a higher upfront cost as you need to buy and install a battery system; no subsidies are available for installing an off-grid system, but potential long-term savings.

Grid Dependence

The system is dependent on the grid. If there is a power cut, you cannot run your electricity appliances.

An off-grid solar system is completely energy-independent; there is no reliance on the grid.

Essential Equipment

The main components of an on-grid solar system are

  • Solar Panels
  • Inverter
  • ACDB & DCDB Box
  • Solar Meter
  • Net Meter
  • Mounting Structure
  • Grid Connection
  • Cabling and Connectors

Following are the essential components of an off-grid solar system:

  • Solar Panels
  • Inverter
  • ACDB & DCDB Box
  • Battery Bank
  • Charge Controller
  • Mounting Structure
  • Bidirectional Meter 
  • Cabling and Connectors

Installation Cost

The installation cost of an on-grid solar system is as follows:

  • 1 kW: Rs.90,000 – Rs.1,30,000
  • 2kW: Rs.80,000 – Rs.1,20,000
  • 3 kW: Rs.1,12,000 – Rs.1,52,000

The installation cost of an off-grid solar system is as follows:

  • 1 kW: Rs.1,13,500 – Rs.1,59,500
  • 2 kW: Rs.1,75,000 – Rs.2,25,000
  • 3kW: Rs.2,37,500 – Rs.2,87,500

Get a Detailed Breakdown of the total solar system installation cost.


Under the PM Surya Ghar Scheme, you can get solar subsidies as follows:

  • 1 kW: Rs. 30,000
  • 2kW: Rs. 60,000
  • 3kW: Rs. 78,000

There is no subsidy under the PM Surya Ghar Scheme for off-grid solar systems.

Are you finding the cost-effective on-grid and off-grid solar installers near your location? Use our platform to get multiple free quotations and choose the best one suitable for you.

Electricity Billing in On-Grid vs. Off-Grid Solar System

On-Grid Solar Systems

On-grid solar systems are connected to the public electricity grid and use net metering. This system tracks the amount of electricity your solar panels produce and the amount you consume from the grid.

Your electricity bill reflects the net amount of power used, which is the difference between the power you consume from the grid and the power you supply back to it.

If you generate more power than you use over a billing period, you may receive a credit on your bill or a payment from the utility company, depending on local regulations.

Here, the homeowner has consumed a surplus of 551 units over the 2376 units produced. This extra consumption will be charged at the end of the billing cycle or carried forward to the next month.

Off-Grid Solar Systems

The key difference between off-grid and on-grid solar energy systems is that off-grid solar systems operate independently of the public electricity grid. They rely entirely on solar power and energy storage systems or batteries. Since off-grid systems are not connected to the grid, you will not have to pay any electricity bill. You have the complete ownership over the use of generated electricity.

Choosing Between On-Grid and Off-Grid Solar Systems

Why Should I Choose an On-Grid Solar System?

If you have grid electricity supply in your area and want to reduce your electricity bill, you can go with an on-grid solar system installation. On-grid systems require minimal maintenance, while off-grid systems need a regular battery and potential generator upkeep. Below are a few reasons to choose on grid solar system.

1. Cost Savings:

  • Reduces your electricity bill by using solar power during the day.
  • Net metering allows you to earn credits for excess power sent to the grid.

2. Maintenance:

  • Requires minimal maintenance compared to off-grid systems.
  • No need for regular battery or generator upkeep.

3. Reliability:

  • Provides a reliable power supply by drawing from the grid when solar power is insufficient.
  • No worries about power outages as you remain connected to the grid.

4. Initial Investment:

  • Lower initial investment compared to off-grid systems.
  • No need to invest in expensive battery storage.

5. Environmental Impact:

Why Should I Choose an Off-Grid Solar System?

If you live in a remote area without grid access, off-grid is your only option. Off-grid solar systems installation provides ultimate self-reliance but requires a higher initial investment. Several reasons for selecting an on-grid solar system are listed below:

1. Energy Independence:

  • Complete self-reliance, not dependent on the grid for power.
  • Ideal for remote areas without grid access.

2. Reliability:

  • Provides continuous power supply even in areas prone to grid outages.
  • Batteries store excess energy for use during night or cloudy periods.

3. Long-Term Savings:

  • Eliminates monthly electricity bills entirely.
  • Reduces long-term costs despite higher initial investment.

4. Sustainability:

  • Promotes sustainable living by relying solely on renewable energy.
  • Reduces environmental impact by avoiding fossil fuel consumption.

5. Resilience:

  • Off-grid systems can be designed to include backup generators for emergencies.
  • Enhanced resilience in extreme weather conditions or remote locations.

For detailed installation costs of solar panels find this blog and make an informed decision before choosing an on-grid or off-grid solar system.

Hybrid Solar Systems as an Alternative to On-Grid and Off-Grid Solar Systems

Hybrid Solar Panel System

A hybrid solar system combines the best features of on-grid and off-grid systems. Here’s how it works and why it might be the ideal choice for you:

  1. Energy Independence with Grid Backup: Hybrid systems allow you to generate and store your own solar power while still being connected to the grid. This means you can use your solar energy during the day and rely on the grid when your stored energy runs out, ensuring a continuous power supply.

  2. Battery Storage: Like off-grid systems, hybrid systems include batteries to store excess solar energy. This stored energy can be used during power outages or at night, reducing your reliance on the grid and providing greater energy security.

  3. Cost Savings: While the initial investment might be higher than a standard on-grid system, hybrid systems can lead to significant savings over time. By using stored solar energy during peak hours, you can avoid high electricity rates and benefit from lower utility bills.

  4. Environmental Benefits: Hybrid systems help reduce your carbon footprint by maximising the use of renewable energy. By relying less on the grid, you decrease the demand for fossil fuels and contribute to a cleaner environment.

  5. Flexibility and Control: Hybrid systems offer greater flexibility in managing your energy usage. You can monitor and control your energy production and consumption through smart systems, optimising efficiency and reducing waste.

  6. Increased Property Value: Installing a hybrid solar system can enhance the value of your property. Potential buyers may be attracted to the energy independence and cost savings provided by the system, making your home more marketable.

By choosing a hybrid solar system, you can enjoy the benefits of both on-grid and off-grid solutions. This balanced approach offers energy security, cost savings, and environmental advantages, making it a smart investment for the future.

The Final Verdict

Which one is better then? Both On-grid and off-grid solar systems offer unique advantages depending on your needs and priorities. Whether you want a budget-friendly grid connection or the ultimate energy independence of an off-grid system, solar power can be your path to a brighter future.

The first step is to assess your home’s energy needs. With a little planning, you can harness the sun’s power and start saving money while positively impacting the environment.

If you need expert assistance regarding solar system installation, you can contact our energy advisors free of cost.

Frequently Asked Questions:

Power supply stops for on grid systems as they rely on the grid. On the other hand, off grid solar sytems continue to provide power using stored battery energy.

On-grid solar systems are applicable for subsidy and have lower upfront costs. They are also connected to the grid and do not require expensive batteries to store energy.

Off-grid solar systems do not depend on the grid and operate independently with excess energy stored in the battery, working smoothly through power cuts.

Grid accessibility, energy consumption, budget, maintenance and energy independence are the key factors before deciding on which system suits you better.

On-grid solar systems fail to power you during blackouts. At night and on days of low-energy production, on-grid solar systems depend solely on the grid and fail to store excess energy.

Off-grid has high upfront costs, limited energy production, storage needs and limited expandability.

Using a high-capacity solar panel system makes it possible to run AC. If you have an on-grid solar system, it becomes easier to run AC because in case you need more electricity, your electricity system can export that from the grid.


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