Factory owners considering rooftop solar almost always ask the same question first: how many years until this pays for itself? Unlike a residential system, a factory’s solar ROI depends on a more complex mix of daytime load profile, tariff category, net metering eligibility, and roof area — all of which need to be modeled accurately rather than estimated from a generic “X years payback” claim. This guide provides the complete calculation framework, with a worked example using 2026 figures.
Why Factory Solar ROI Is Different From Residential ROI
A factory typically consumes far more electricity during daylight working hours than a household does — running production machinery, compressors, lighting, and HVAC across one or more shifts. This daytime-heavy load profile is actually ideal for solar, because most of the generated power is consumed directly rather than exported at a lower net-metering credit rate. At the same time, factories are billed on industrial tariffs (MT, HT, or EHT) that include both an energy charge (per kWh) and a demand charge (based on sanctioned/peak load) — and a properly designed solar system interacts with both.
Step 1: Establish Your Baseline Energy Costs
Before modeling solar savings, gather:
- Your last 12 months of electricity bills, broken down by energy charge and demand charge
- Your tariff category (LT, MT, HT, or EHT) and current rate per kWh — industrial users are currently operating against a weighted average retail tariff of roughly ৳10.63/kWh, though your specific category rate may differ
- Your daytime load profile — how much electricity your facility actually consumes during solar generation hours (roughly 9am–4pm)
- Your sanctioned load, which determines your maximum eligible net-metered solar capacity under the 2025 guidelines (up to 100% of sanctioned load)
Step 2: Size the System Against Roof Area and Load
Two constraints determine your maximum practical system size:
- Available, unshaded roof area — each 100W of panel capacity requires roughly 0.6–0.7 square metres of usable roof space.
- Sanctioned load ceiling — your net-metered AC capacity cannot exceed your sanctioned load (or 80% of transformer rating for medium/high-voltage connections, without a special application).
The ideal system size is the smaller of what your roof can physically hold and what your sanctioned load permits — sized further against your actual daytime consumption so that as much generation as possible is self-consumed rather than exported at the lower net-metering credit rate.
Step 3: Estimate Annual Generation
Bangladesh averages roughly 4.5–5 peak sun hours per day. A simplified estimate for annual generation is:
System size (kW) × average peak sun hours/day × 365 days × system efficiency factor
A realistic system efficiency factor (accounting for inverter losses, temperature derating, soiling, and shading) is typically applied to avoid overstating output — published “ideal condition” numbers from panel datasheets should always be adjusted downward for real-world performance.
Step 4: Calculate Direct Energy-Charge Savings
Multiply your estimated annual self-consumed generation (the portion used directly by the factory rather than exported) by your applicable energy-charge rate. This is usually the largest and most predictable savings line in a factory solar model, precisely because factory loads are typically daytime-heavy.
Step 5: Calculate Net Metering Export Credit
Any generation beyond what your factory consumes in real time during daylight hours is exported to the grid and credited under net metering rules. While this is valuable, it is usually credited at a different effective rate than direct self-consumption savings — which is why sizing the system close to (rather than far beyond) your daytime load typically produces the best ROI, unless your facility specifically wants to maximize export under a particular tariff structure.
Step 6: Factor in Demand-Charge Impact (If Applicable)
Solar reduces your grid-drawn power during the hours it’s generating, which can reduce your billed peak demand if your facility’s peak demand coincides with solar generation hours. If your factory’s peak demand instead occurs in the evening (after solar generation ends), demand-charge savings from solar alone will be limited — in that case, pairing solar with a Battery Energy Storage System (BESS) captures additional demand-charge value by shifting stored solar energy into the evening peak. See BESS ROI Calculator: How to Evaluate Battery Storage Investment in Bangladesh and Solar + BESS Hybrid: The Ultimate Energy Solution for Bangladeshi Industries for that combined calculation.
Step 7: Total Up the Cost Side
Using current 2026 commercial/industrial pricing, a tier-1 hybrid system typically runs ৳75–110 per watt installed, with larger commercial roofs often achieving better per-watt pricing due to scale. Factor in:
- CapEx: Panels, inverter, mounting, cabling, and installation (or, under an OpEx model, no upfront capital cost at all — see below)
- OpEx: Minimal ongoing cost — primarily occasional cleaning and inverter monitoring, since panels require little maintenance beyond this
- Degradation: Quality panels typically retain strong output over a 20–25 year lifespan, with gradual annual output decline factored into a conservative long-term model
Step 8: Choose Your Financing Model — and How It Changes the ROI Calculation
CapEx model: You pay the full installed cost upfront and capture 100% of the savings going forward. ROI is calculated as simple payback (total cost ÷ annual savings) plus a longer-term NPV/IRR view across the system’s 20+ year life.
OpEx (third-party investment) model: A third-party investor installs and owns the system; you sign a power purchase agreement to buy the generated electricity at a rate below your standard grid tariff. There’s no upfront capital cost and no traditional “payback period” calculation — instead, the relevant metric is simply the percentage discount versus your current grid rate, multiplied across your expected daytime consumption, for the duration of the agreement.
Worked Example (Illustrative)
Consider a factory installing a 100kW rooftop system under the CapEx model:
- Installed cost at roughly ৳90/watt (mid-range of the ৳75–110/watt commercial range) ≈ ৳9 million
- Estimated annual generation: 100kW × ~4.7 average peak sun hours/day × 365 days × a conservative efficiency factor — yielding a substantial annual kWh output, the large majority of which is self-consumed given the factory’s daytime-heavy load
- Annual energy-charge savings: Self-consumed generation × applicable industrial energy-charge rate
- Additional savings: Net metering export credit for any surplus beyond self-consumption
Dividing the total installed cost by total annual savings (energy-charge savings plus export credit) gives the simple payback period. Many well-sized industrial rooftop solar projects in Bangladesh, with strong daytime self-consumption, achieve payback within roughly 4–7 years, with 15+ years of continued savings remaining within the system’s 20-25 year design life after that point — though this varies meaningfully by site, tariff category, and system design, so always model your own facility’s numbers rather than relying on a published average.
Common Mistakes in Factory Solar ROI Models
- Overestimating self-consumption by ignoring the actual hourly load profile and assuming all generation offsets grid draw at the full retail rate
- Using panel datasheet “ideal condition” output instead of a realistic, derated efficiency factor
- Ignoring net metering’s sanctioned-load ceiling, leading to a system design that can’t actually be approved at the size assumed
- Comparing only to “no solar” instead of the realistic alternative — continuing to pay rising grid tariffs indefinitely — which understates the relative value of locking in lower effective energy costs now
- Failing to separate CapEx vs OpEx scenarios clearly, since the relevant financial metric (payback period vs simple rate discount) is different for each
Budgeting for Inverter Replacement and Long-Term Maintenance
Most ROI models correctly account for panel degradation but understate one other recurring cost: inverter replacement. While solar panels routinely carry warranties stretching across decades, inverters — particularly the power electronics in hybrid units — typically have a shorter practical service life and may need replacement once or possibly twice over a 20-25 year system lifetime, depending on usage intensity and build quality. A complete ROI model should set aside a modest reserve for this eventuality rather than assuming zero further capital cost after the initial installation. Similarly, factor in periodic cleaning costs (more frequent during Bangladesh’s dry, dusty season) and an annual inspection of cabling, connections, and mounting hardware, especially after monsoon season when wind and water exposure are highest.
Sensitivity Check: What Moves Your Payback Period the Most
When stress-testing your own ROI model, three variables typically have the largest impact on the result:
- Your actual daytime self-consumption rate — a system that is well-matched to your load profile and consumes most of its generation directly will outperform a model that assumes a flat, generic self-consumption percentage.
- Your industrial tariff category and rate — since MT, HT, and EHT rates differ, plugging in your facility’s actual rate (rather than a generic average) changes the savings calculation materially.
- Equipment quality and installer workmanship — a poorly commissioned system with avoidable losses (incorrect tilt/orientation, inadequate cable sizing, or undersized inverter capacity) can underperform a well-engineered system by a meaningful margin over its lifetime, even with identical panel specifications.
Comparing Against Diesel Backup Costs
Many factories currently treat diesel generators as their backup solution with no daytime cost benefit at all. When evaluating solar ROI, it’s worth comparing the full picture against your current diesel-dependent setup — see Solar vs Diesel Generator: True Cost Comparison for Bangladesh 2026 for that direct comparison.
Frequently Asked Questions
What is a typical payback period for factory rooftop solar in Bangladesh? This varies by site, but well-sized systems with strong daytime self-consumption often achieve payback within roughly 4–7 years under current 2026 tariffs and equipment pricing, with continued savings for the remainder of the system’s 20-25 year life.
Does the OpEx model have a “payback period” at all? Not in the traditional sense — since there’s no upfront capital cost, the relevant metric is the discount you receive versus your current grid tariff rate, applied across your daytime consumption for the duration of the power purchase agreement.
How does net metering’s sanctioned-load rule affect my ROI calculation? It caps your maximum eligible system size at up to 100% of your sanctioned load (under the 2025 guidelines), which in turn caps your maximum achievable savings — always design within this limit rather than assuming an unconstrained system size.
Should I include demand-charge savings in my factory solar ROI model? Only to the extent your facility’s peak demand actually occurs during solar generation hours. If your peak demand is in the evening, demand-charge savings from solar alone are limited — pairing with battery storage captures that value instead.
How accurate are online solar ROI calculators for Bangladeshi factories? Generic calculators are a reasonable starting point but rarely account for your specific tariff category, demand-charge structure, and actual hourly load profile — a proper site-specific model from a qualified installer will be materially more accurate.
Should I wait for solar equipment prices to fall further before installing? Weigh any expected future price decline against the savings you forgo by delaying — every month without solar is a month of full grid electricity cost on your daytime consumption at current, rising tariff rates. For most facilities with a clear payback case today, the cost of waiting tends to outweigh the benefit of a marginally lower future equipment price.
Key Takeaways
- Factory solar ROI depends heavily on daytime self-consumption, tariff category, and sanctioned-load limits — not just system size and panel price.
- At ৳75–110/watt installed (2026 commercial pricing) and ৳10.63/kWh average industrial tariffs, well-sized systems often achieve payback within roughly 4–7 years.
- CapEx and OpEx financing models require different ROI metrics — payback period versus simple rate discount.
- Pairing with battery storage captures additional demand-charge value if your peak demand occurs outside solar generation hours.
- Always model your own facility’s actual load and tariff data rather than relying on generic published averages.
Get a Site-Specific Solar ROI Model
Fakir Technologies builds detailed, site-specific solar feasibility and ROI models for factories and commercial buildings across Bangladesh, based on your actual electricity bills and roof survey. Learn more about our Rooftop Solar Energy solutions, check current Solar Panel Price in Bangladesh 2026, and contact our solar team for a free ROI assessment.