What is a Solar Energy Monitoring System? Explore Types, Working, and Benefits

A solar energy monitoring system is a device that combines hardware and software to track the performance of a solar system in near real time and detect critical issues that might be reducing the energy output from the solar panels. It tracks how much power your panels produce, how much your home or building uses, how much you send to the grid, and, if you have lithium batteries, how much is stored and available.

These advanced solar energy monitoring devices also flag issues that can reduce your output, such as faulty solar panels, solar inverter errors, wiring problems, shading, or dust buildup.

A good-quality solar panel monitoring system offers remote monitoring. You can check live and past data on a web dashboard or a simple phone app, get alerts when something looks wrong, and download reports for bills, maintenance, and ROI checks.

Here are a few ways these solar energy monitoring systems are set up:

Some watch each panel
Some watch each string or inverter
Some only watch the whole solar energy system

The monitoring can come built into the inverter, be provided by your installer, or run on a third-party device. No matter the type, most critical components of any solar energy monitoring system are sensors, data loggers, software, and a communication system.

In this blog, you’ll explore what an energy monitoring system is, how it works, its benefits, types, and features. We will also give you a head-on comparison between on-grid and off-grid solar systems to help you understand which one you should choose (and why) when installing rooftop solar panel systems for homes, housing societies, and commercial buildings.

TL;DR Summary Box: Why is Energy Monitoring Important?

You installed a rooftop solar system at home. But how do you know it’s giving you the power it should? Energy monitoring checks how your system is performing in near real time. Without it, you’re flying blind. You won’t know if panels are underperforming, if the inverter has an error, or if you’re losing money because of a hidden issue.

Here’s why solar energy monitoring makes so much sense:

It protects your investment from failures that would otherwise go unnoticed: Panels and inverters can underperform without any visible signs. Monitoring spots faults early and sends alerts before these issues can significantly impact your electricity bills.
It maximizes your energy savings: Energy monitoring helps you understand how much energy your panels produce and when they produce it most efficiently. You can use this knowledge to shift activities that consume more power, like running washing machines, water heaters, or air conditioners, to peak sunshine hours. This allows you to maximize the use of free solar renewable energy instead of expensive grid electricity.
It helps you check your solar bill and net-metering credits: Net metering uses a bi-directional meter to record electricity import and export between the grid and your on-grid solar system. Energy monitoring helps you compare app data with your DISCOM credits so mistakes don’t slip through.
It maximizes your ROI: An energy monitoring system will ensure your system produces maximum solar electricity. And the more power your solar system will produce, the sooner its initial investment cost will break even.
It detects maintenance needs before costly repairs: Solar energy monitoring identifies performance issues that indicate maintenance needs, such as panel cleaning, loose connections, or component aging. Addressing these issues early on through proper solar system maintenance costs much less than waiting for complete system failures.

Please note: Energy monitoring itself doesn’t increase production. It helps you catch issues fast and use more of your solar at the right times, which is how it protects your savings.

Here are the main points covered in this blog in detail:

Main Topics	Quick Takeaways
What is a solar energy monitoring system?	It’s a monitoring and tracking device that shows how much solar electricity your system makes and how much of it is consumed at home, sent to the grid, and stored in the battery. It also detects performance issues with panels and inverters and sends timely maintenance alerts.
How does an energy monitoring system work?	Your inverter or sensor will read the numbers, a communication box will send them to a cloud server, and an app will turn them into easy graphs and alerts.
What are the benefits of a solar energy monitoring system?	It sports performance issues early on and regularly checks the system’s health.
What are the types of solar power monitoring systems?	Based on data collection: Panel-level, string-level, and system-level Based on installation: equipment by installer, equipment by manufacturer, third-party equipment
Are solar energy monitoring systems and solar tracking systems the same?	No. An energy monitoring system watches and reports the performance. A solar tracking system physically moves panels to follow the sun.
On-grid vs off-grid solar systems: Which is better?	On-grid rooftop solar systems are better since they are more affordable, reduce more than 90% of your electricity bill, and save tens of lakhs of rupees in 25 years.

What is a Solar Energy Monitoring System?

Solar energy monitoring systems are tools that can track the performance of your solar system, detect power generation issues, and maximize your return on investment by offering real-time data analysis and sending automated alerts to your phone.

These systems collect real-time power generation data from solar panels, inverters, and smart energy meters. The collected data is then used to show energy production, how you use the produced energy, electricity import/export exchange between the grid and your system, and maintenance needs like solar panel cleaning.

What Are the Core Components of a Solar Power Monitoring System?

The solar energy monitoring system is a combination of physical sensors, cloud computing technology, data loggers, and a user-friendly interface (a web portal or an app) where customers can view the data collected by the system.

Here are the main components that work in tandem in a solar power monitoring system:

Hardware sensors and meters: They are installed to measure electrical output from individual solar panels or entire arrays.
Data logger, often present inside the solar inverter itself: It collects readings, stores them for a while if the internet is down, and prepares them to send.
Communication devices: Their role is to transmit data wirelessly or through power line communication to central processors.
Cloud-based data processing platforms: They store the data and can also turn it into charts.
User interfaces: This could either be a mobile application or a web portal that customers can access for real-time and historical power generation data.
Alert systems: These are meant to notify users immediately when performance drops below expected thresholds.

How Does a Solar Energy Monitoring System Work?

Energy monitoring systems use different components to collect, transmit, process, and display the performance of a solar energy system to customers in near real-time. The monitoring process begins at the panel level, where sensors measure the DC output at the panel’s end. This data is further transmitted through communication devices and sent to a centralized processing system.

A cloud-based platform receives final data. The platform performs complex calculations and presents the results in the form of simple bar graphs or charts on mobile applications and web interfaces.

Here’s how the energy monitoring systems work step-by-step:

Step 1 – Power generation data is collected by the sensors: The inverter/sensors read power output from your solar system. If fitted, smart meters also read the power consumption at your home and the unit exchange between your system and the grid. This can happen every few seconds or every few minutes.
Step 2 – Local processing follows next: Basic calculations and error checks are done inside the inverter or the monitoring box. Many devices keep a local copy of recent data.
Step 3 – The collected data is then transmitted: The energy monitoring system uses communication devices to send information to cloud servers via WiFi, cellular networks, or ethernet connections.
Step 4 – Cloud performs advanced data analysis: The data is processed to calculate performance metrics, identify trends, and generate alerts if the output is lower than it should be.
Step 5 – The final data is presented to the user: Results are displayed on mobile apps or web portals. They can also be sent to the user as automated email or text notifications.
Step 6 – The collected data is stored for historical usage: This is done in order to maintain long-term records for performance analysis and warranty documentation as the solar system gets older, year after year.

Core Functions of a Solar Power Monitoring System

The primary function of a solar energy monitoring system is to continuously measure and track different parameters of the solar system, including voltage, current, power output, and energy production at different times throughout the day.

These systems can also monitor environmental factors such as temperature, irradiance levels, and weather conditions like cloud cover that directly impact solar panel performance.

Here’s a snapshot of all the critical core functions that an energy monitoring system performs:

Tracks power output: It measures and records the solar electricity generated by the panels through the day and over time.
Records consumption pattern: It shows how much power was consumed in your home and how much was imported/exported between the grid and the system.
Notifies in case of faults: The system sends prompt alerts when output drops or a fault occurs.
Notifies when maintenance is needed: Since the system tracks the overall performance so closely, it’s able to highlight likely maintenance needs, like cleaning dusty panels or checking a loose connection, before the system’s output can drop significantly.

What Are the Benefits of an Energy Monitoring System?

Energy monitoring systems maximize your return on investment and protect your solar systems against panel or inverter malfunction by tracking the output of the solar system and flagging potential issues that might be reducing the power output in real time. Simply put, they identify issues before those issues can drop the panel generation to such an extent that will impact your bills, reducing your savings.

Here are the main benefits/advantages a solar energy monitoring system offers:

It increases the energy generated by the solar panels: Although the energy monitoring system doesn’t do this directly, it does increase the output indirectly by identifying issues early on. Early identification helps remedying the issues before output drops.
It reduces the risk of costly repairs: Since the system sends timely alerts when panels should be cleaned and inverters should be serviced, major faults that might have required complete replacement rarely happen.
It can help optimize energy consumption at home: The data produced gives a record of when the solar system generates most power during the day. You can use that insight to perform all activities that require a lot of power during the maximum power generation time. This will reduce your reliance on grid electricity.
You can track your savings: These systems provide you with real power generation figures, which you can simply tally with the power generation that was promised at the time of system installation.

What Are the Types of Solar Energy Monitoring Systems?

Energy monitoring systems can be categorized by data collection level and installation approach. Based on data collection level, there are three types of energy monitoring systems: panel-level, string-level, and system-level. Based on installation, the energy monitoring systems can be classified as equipment provided by the installer, equipment provided by the manufacturer, and third-party equipment.

Types of Solar Energy Monitoring Systems by Data Collection Level

These are of three types: panel-level monitoring, string-level monitoring, and system-level monitoring. Panel-level monitoring provides detailed performance data for each individual solar panel in your solar system. The string-level system shows the output of each string. Lastly, the system-level monitoring provides comprehensive oversight of the entire solar array’s performance.

Let’s check out all the types:

Panel-level monitoring: A solar panel monitoring system tracks and monitors the output from an individual solar panel. It shows production data for each panel separately and identifies exactly which panels are underperforming or have failed. It can also identify how shadows affect specific panels throughout the day and ensure every panel operates at peak efficiency levels.
String-level monitoring: An array monitoring system shows the output of each string, which is a small group of panels wired together. This system can quickly reveal if one whole string has dropped power output, which is a common fault that results in reduced power generation in solar PV systems.
System-level monitoring: A system-level energy monitoring device monitors and tracks overall array performance. It provides data regarding the energy production from the entire solar system, not individual panels or strings. It’s more suitable for rooftops where shading and orientation issues are minimal across all panels.

Types of Solar Energy Monitoring Systems Based on Installation

These are of three main types: equipment by the installer, equipment by the manufacturer, and third-party monitoring equipment. Let’s check out how these three types differ:

Equipment by the installer: Some installers give you access through the manufacturer’s app and also use an installer view to watch your system for service.
Equipment by the manufacturer: These are mainly solar inverters that have built-in monitoring capabilities. They can show total energy production, current power output, and system status without the requirement for any additional hardware. One example of these energy monitoring systems is power optimizers by SolarEdge.
Third-party equipment or standalone home energy monitoring solutions: These are add-on boxes or home energy monitors from companies that don’t make your solar inverter. They are great for older solar systems and can add consumption and export tracking if your original app doesn’t show it.

Are Solar Energy Monitoring Systems and Solar Tracking Systems the Same?

Solar energy monitoring systems and solar tracking systems are not the same. Solar tracking systems, or solar trackers, are devices that physically move and adjust the solar panels so they remain perpendicular to the sun throughout the day. These are of two main types: a single-axis solar tracker and a dual-axis solar tracker.

While their purpose is also to maximize the output from solar panels, solar tracking systems are completely different from energy monitoring systems.

Here’s a head-on comparison between the two:

Feature	Solar Energy Monitoring System	Solar Tracking System
What does it do?	Measures and shows solar production, sends alerts, and keeps history.	Physically moves panels in off-grid solar systems and hybrid solar systems to follow the sun.
Does it increase energy production directly?	No. It helps you recover lost energy by finding issues early.	Yes. It moves the panels so they remain perpendicular to the sun, which increases energy generation.
Where it is and isn’t used	Can be used in rooftop solar for housing societies and homes. Can be used in commercial rooftop systems. Suitable for on-grid, off-grid, and hybrid solar systems.	Provides value for commercial solar systems. Not ideal for on-grid rooftop solar systems for homes. Not suitable for rooftop solar systems. More suited for ground-mounted solar systems.

On-Grid vs Off-Grid Solar Systems: Which One Should You Choose, and Why?

Choosing on-grid rooftop solar systems is better because they’re a lot more affordable and comparatively easier to maintain than off-grid PV systems. Plus, you get a subsidy under the PM Surya Ghar Muft Bijli Yojana for installing on-grid rooftop solar systems, not off-grid.

Here’s a head-on comparison between the two solar system types to help you understand why choosing on-grid systems in India is a better option:

Aspect	On-Grid Solar Systems	Off-Grid Solar Systems
Connection to the grid	Yes	No
Battery storage	No	Yes
Solar subsidy by the government	Yes	No
Cost of installing the solar system	Very affordable for two main reasons: The government offers a subsidy The system does not require a lithium battery bank	The cost is very high because of the following reasons: It involves lithium batteries, which are expensive to install, maintain, and replace. The government does not offer any financial assistance for installing off-grid systems.
Maintenance cost	Very low	Very high
Installation complexity	Less	More

Choose off-grid solar only if you live in a remote and rural area where there’s no grid supply or the supply is very unreliable. For urban areas with a reliable grid, an on-grid solar system is the best. It’s affordable, boasts a subsidy, and reduces electricity bills by more than 90%.

On-Grid Rooftop Solar System Installation Cost vs Solar Savings in 25 Years

Once you install an on-grid rooftop solar system, the installation cost is recovered within 3-5 years. After that, your system will continue producing free electricity for 25 years of its life. The end result is savings in tens of lakhs or rupees.

Don’t believe us?

Here’s a simple comparison between the estimated cost of installing on-grid solar in Nagpur vs the solar savings the system will offer in 25 years:

Solar System Size	Solar Panel Price in Nagpur With Subsidy (Starting Price – Indicative for Base Variant)*	Solar Savings in Nagpur in 25 Years*
2 kWp	~ Rs. 1.15 lakh	~ Rs. 11.05 lakh
3 kWp	~ Rs. 1.32 lakh	~ Rs. 16.58 lakh
4 kWp	~ Rs. 1.77 lakh	~ Rs. 22.11 lakh
5 kWp	~ Rs. 2.27 lakh	~ Rs. 34.43 lakh
10 kWp	~ Rs. 5.02 lakh	~ Rs. 68.86 lakh

*Please note: The above-mentioned solar plate price is indicative as of 21st August 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Additionally, while calculating savings, we have considered the annual tariff escalation at 3% and the annual degradation at 1%. The actual final savings from solar panel installation depend on the types of solar panels you’ve installed and their efficiency, intensity of sunlight your rooftop receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the roof, impact of dirt/dust, and how well you maintain your panels after installation.

Use SolarSquare’s rooftop solar calculator to get an estimate of solar savings in your city for free!

Conclusion

A solar energy monitoring system tracks how your solar system is performing. It shows problems early and sends alerts when power drops below expected levels. While it won’t directly increase energy output, a solar power monitoring system will help you detect and fix issues affecting the output quickly. It will perform regular checks to keep the system healthy, which will protect your savings over time.

If the idea of never paying for electricity and saving tens of lakhs of rupees appeals to you, book a free solar consultation call with SolarSquare now.

FAQs

Q1. Is solar monitoring worth it?

Ans. Yes. It identifies issues with solar panels and inverters early, safeguards your savings, and allows you to verify that your bill and export credits are accurate.

Q2. Do solar monitoring systems work during a power outage?

Ans. If your Wi-Fi/router or inverter has no power, the app won’t update live readings. Many systems store data locally and sync it when power returns. However, with a battery backup, you might be able to see data on the local display.

Q3. Can I add monitoring to an existing solar system?

Ans. Usually, yes. You can add a small monitor or energy meter that works with your inverter. Ask your installer to check compatibility and set up the internet connection for the app.