The Indian government is committed to achieving 500 GW of renewable energy capacity by 2030. To accelerate solar adoption, both central and state governments offer attractive subsidies and incentives for residential, commercial, and industrial solar installations. This comprehensive guide will help you navigate available benefits and maximize your savings.
Why Government Support Solar Energy?
India faces rising energy demand, environmental pollution, and imported fossil fuel costs. Solar energy addresses all three challenges while creating jobs and economic growth. Government incentives make solar affordable for all income levels.
Central Government Schemes
1. Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahaabhiyaan (PM-KUSUM)
Target: Support 30.8 million farmers with solar installations
Benefits:
- Installation of 25 lakh solar pumps for irrigation
- 40% subsidy on system cost (central government)
- Additional subsidies from state governments (up to 60% total)
- Option to sell excess power to discoms (earn income)
- Low-interest financing through banks
2. Pradhan Mantri Residential Solar Rooftop Scheme
Target: 1.4 crore households with rooftop solar
Current Phase: Phase-III (ongoing)
Subsidies Available:
- Up to ₹40,000 per kW (capped at system size)
- For 1-3 kW: Up to ₹120,000 total subsidy
- For 3-10 kW: Up to ₹300,000 total subsidy
- Zero-interest financing options
- Simplified documentation process
Example Calculation:
5 kW system cost: ₹4,25,000
Central subsidy (40%): ₹1,70,000
Your cost after subsidy: ₹2,55,000
Annual savings with this system: ₹30,000-45,000
3. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya)
Ensures electricity access and promotes solar adoption in remote areas.
State-Specific Subsidies
Delhi
- 50% subsidy on system cost (capped at ₹2 lakhs)
- Additional ₹50,000 for battery storage
- Net metering with 1:1 ratio
- Extended payment terms available
Maharashtra
- 40% subsidy for residential systems
- Enhanced subsidies for SC/ST categories
- Priority processing for women applicants
- State-level financing assistance
Karnataka
- 30-40% subsidy from state government
- Combined with central subsidies up to 60-70% total
- Zero down-payment schemes
- 5-year manufacturer warranty
Rajasthan
- 40% subsidy for domestic systems
- Dedicated solar portal for applications
- Priority for agricultural consumers
- Grid-tied net metering benefits
Other States
Most states offer 20-40% subsidies. Contact your state's Energy Department or Discom for specific benefits.
Tax Benefits & Deductions
Income Tax Benefits
- Depreciation benefits for commercial installations (80% in first year)
- Production-linked incentives (PLI) for manufacturers
- Customs duty exemption on solar components (reduced to 5%)
Property Tax Exemption
Many states exempt solar installations from property tax assessment, saving ₹500-2,000 annually depending on system size.
No GST on Residential Solar Systems
Residential solar installations are GST-free, significantly reducing costs. Commercial installations pay 5% GST.
Financing Options
Zero-Interest EMI
Many banks offer 5-7 year EMI schemes with zero interest for solar installations:
- SBI, ICICI, HDFC, Axis Bank participating
- Minimal documentation required
- Fast approval (7-10 days)
- EMI can be covered by electricity bill savings
Green Energy Financing
Specialized solar finance schemes available through government-backed institutions with rates as low as 4-6% per annum.
Net Metering Benefits
Most states offer net metering, allowing you to:
- Sell excess solar power to the grid at retail electricity rates
- Bank credits for use during night or cloudy days
- Zero out your electricity bill with proper system sizing
- Additional income from excess power generation
Net Metering Example:
Your 5 kW system generates 600 kWh monthly
You consume 300 kWh, export 300 kWh to grid
If your rate is ₹5/kWh: Earn ₹1,500 or credit against future consumption
Step-by-Step Process to Claim Subsidies
Step 1: Register Online
Apply through your state's solar energy portal or Ministry of New and Renewable Energy (MNRE) portal (solarrooftop.gov.in)
Step 2: Document Verification
Submit required documents:
- Identity proof (Aadhar, PAN)
- Property ownership documents
- Recent electricity bill
- Roof assessment photograph
- Quotation from MNRE-registered installer
Step 3: Approval & Installation
Once approved, proceed with installation from an authorized installer like Gupta Solar.
Step 4: Net Metering Connection
Apply to your electricity discom for net metering after installation.
Step 5: Subsidy Disbursement
Typically within 30-45 days after installation completion and net metering approval, subsidies are transferred to your bank account.
Common Mistakes to Avoid
- Using unregistered installers: Always choose MNRE-registered companies like Gupta Solar
- Missing documentation: Gather all required papers before application
- Incorrect system sizing: Consultant should assess your actual consumption
- Not applying for net metering: Essential for maximum benefits
- Ignoring state-specific schemes: Many states offer additional incentives
Future Incentives & Trends
Expected developments:
- Increased subsidies as technology costs drop
- Battery storage incentives expanding
- Green hydrogen production incentives
- Commercial solar accelerated depreciation
- Corporate renewable purchase agreements
Conclusion
The Indian government's solar incentives make renewable energy adoption affordable and accessible for all. Combined subsidies, tax benefits, financing options, and net metering can reduce your effective system cost by 50-70%. The time to go solar is now—take advantage of these generous programs while they're available.
Want to know your exact subsidy eligibility? Contact Gupta Solar for a free assessment and complete subsidy calculation!