Solar Subsidy in India
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Solar energy is becoming increasingly popular in India, yet the high upfront costs of installing solar systems remain a barrier for many. The good news is that central and state governments offer attractive solar subsidies to make solar more affordable. In this article, we will provide an overview of the key government solar subsidy schemes available across different states in India.
After extensive research and discussions with solar industry experts, We, Prefuel Energy found answers to some common questions homeowners and businesses have about availing solar subsidies:
- Who can avail of the solar subsidy in India?
- How much subsidy is available in India for installing Solar Systems?
- How to apply for a solar subsidy?
- When will you get the Solar Subsidy?
- Old and New Subsidy Pattern
- Solar Panel System Subsidy in Uttar Pradesh
- Solar Panel System Subsidy in Uttarakhand
Who can avail of the solar subsidy in India?
- Residential consumers with grid-connected solar rooftop systems up to 3kW capacity. They can get a subsidy of 40% of the system cost up to ₹18,000 per kW
- Group housing societies and residential welfare associations (RWAs) with solar rooftop systems up to 500kW capacity. They are eligible for a 20% subsidy from the central government
- Certain states like Uttarakhand, Sikkim, Himachal Pradesh, Jammu & Kashmir and Lakshadweep provide higher subsidies up to 70% for residential consumers
- To avail the subsidy, consumers need to get the solar systems installed through empanelled vendors approved by the state distribution companies (DISCOMs)
- Subsidy is only applicable for grid-connected rooftop solar systems installed in the residential sector. It is not available for government, institutional, social, commercial or industrial sectors
- Subsidy will not be provided if systems are installed before the launch of the scheme, by non-empanelled vendors, or in non-residential categories
How much subsidy is available in India for installing Solar Systems?
The Indian government provides subsidies at both the central and state level to promote solar energy adoption. As per the table, the MNRE provides 40% subsidy for rooftop solar systems up to 3 kW capacity, 20% for 3-10 kW systems, 70% for solar agricultural pumps, and 60% for off-grid installations in rural areas.
| Solar System Type | Subsidy Rate |
|---|---|
| Rooftop Solar (up to 3 kW) | 40% subsidy from MNRE |
| Rooftop Solar (3-10 kW) | 20% subsidy from MNRE |
| Solar Pumps | 70% subsidy from MNRE |
| Off-grid Solar | 60% subsidy from MNRE |
Additionally, many states offer subsidies over and above the MNRE rates, ranging from 20% to 75% depending on the region, end-use and system size. Subsidies are available only through approved vendors and help reduce the upfront capital cost of installing solar power systems across residential, commercial and agricultural segments.
How to apply for a solar subsidy?
- Get your rooftop solar system installed by an empanelled vendor approved by your state distribution company (DISCOM). Make sure to get grid-connected net or gross metering enabled before installation
- Visit the National Portal for Rooftop Solar at https://solarrooftop.gov.in and create an account. You will need details like your electricity connection number, mobile number, email ID, bank account details, etc
- Upload the required documents like your latest electricity bill, cancelled cheque, installation certificate from the vendor, etc. Make sure all details entered match your documents
- The portal will register your application and forward it to the state nodal agency and DISCOM for approval. They may inspect your solar plant for verification
- Once approved, the subsidy amount will automatically get transferred to your bank account within 30 days. The subsidy provided ranges from 20% to 40% of system cost based on capacity and location
When will you get the Solar Subsidy?
- The subsidy amount is usually credited automatically to the applicant's bank account within 30 days after approval
- One document mentions that for a specific 24 MWp subsidy scheme, disbursement started 2-3 months after installation and net-metering for beneficiaries
- Another source states it generally takes 3-6 months to receive the subsidy after applying
- Applicants should follow up regularly with the nodal agencies to track the status of their applications and expected disbursement date
- Timely inspection and self-certification of installed systems can help speed up the approval and disbursal process
- So in summary, while an exact timeline is not defined, applicants can expect to receive the solar subsidy within approximately 3-6 months after applying, given timely completion of documentation, inspections and approvals. Regular follow-ups are advisable for smooth processing.
Old and New Solar Subsidy Pattern
The Indian government has revised the solar subsidy structure under the National Solar Mission. As per the old pattern, a flat 30% subsidy was available for all rooftop solar systems. This has been changed to 40% for systems below 3 kW and 20% for 3-10 kW systems to better target small households.
| Solar Subsidy | Old Pattern | New Pattern |
|---|---|---|
| Rooftop Solar | 30% subsidy for all system sizes | 40% for <3 kW, 20% for 3-10 kW |
| Solar Pumps | 55% subsidy | 70% subsidy |
| Off-grid Solar | 90% subsidy in special category states, 60% in others | Standardized 60% subsidy |
| State Subsidies | Varied widely, some states no subsidy | Most states now offer additional subsidies |
The standard subsidy for off-grid solar projects has been fixed at 60% versus the earlier differentiation between special category states. Most significantly, more states have now started providing additional subsidies taking the total subsidy amount to 50-75% in certain cases. The new pattern aims to expand rooftop solar adoption in the residential segment and boost off-grid penetration in remote villages.
Solar Panel System Subsidy in Uttar Pradesh
- Residential consumers can avail a subsidy of Rs 15,000 per kW for installing grid-connected rooftop solar systems up to a capacity of 10kW
- To apply for the subsidy, the solar system needs to be installed by an empanelled vendor approved by the state DISCOM. Net metering connection is also required
- Consumers need to submit an online application on the national solar rooftop portal along with documents like electricity bill, installation certificate, etc
- The subsidy is disbursed automatically to the bank account within 30 days after inspection and approval of the application
- The maximum subsidy amount works out to Rs 1.5 lakhs for a 10 kW solar system capacity. Higher system capacities above 10kW will get a fixed subsidy amount.
