Confused about the solar panel subsidy in India? In this guide, we will provide a detailed overview of the solar panel subsidy in India, the types of subsidies available, how they work, the eligibility criteria, and how to apply for them.
India is rapidly transitioning towards clean energy, and one of the primary sources leading this transformation is solar energy. The government of India has introduced various schemes to incentivize the installation of solar systems, particularly through solar panel subsidies. These subsidies aim to make solar energy more affordable for households, businesses, and agricultural sectors, ultimately promoting the widespread use of renewable energy and contributing to environmental sustainability.
By the end of this guide, you will have a clear understanding of how you can take advantage of these subsidies to install solar panels and start saving on energy costs.
What is Solar Panel Subsidy in India?
A solar panel subsidy in India is a financial incentive provided by the Indian government to reduce the cost of installing solar panels for individuals, businesses, and farmers. With the rising electricity costs and the environmental need to shift towards renewable energy, solar panels offer an excellent alternative to traditional grid power. However, the initial installation cost of solar panels can be high, which can deter many people from making the switch. To address this, the government offers subsidies to make solar panels more affordable.
Benefits of Solar Panel Subsidy in India
The solar panel subsidy in India offers numerous benefits:
- Cost Reduction: Subsidies significantly lower the initial installation costs, making solar energy more accessible.
- Environmental Impact: Solar power reduces dependence on fossil fuels, helping to reduce carbon emissions.
- Long-Term Savings: By switching to solar energy, you can significantly lower your electricity bills.
- Government Support: The Indian government provides various schemes that help promote solar energy across the nation.
Types of Solar Panel Subsidy Schemes in India
India offers several subsidy schemes designed to promote solar energy adoption. Each scheme targets different sectors such as residential, commercial, and agricultural users. Below, we’ll explain the key schemes and their benefits.
1. PM Kusum Yojana (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan)
The PM Kusum Yojana is one of the most prominent solar subsidy programs, primarily designed for farmers. This scheme offers financial assistance for the installation of solar pumps and grid-connected solar plants. The initiative is intended to help farmers reduce their dependence on grid electricity or diesel-powered pumps, ultimately leading to lower energy costs.
Key Features:
- 60% Subsidy for the installation of solar pumps and plants.
- Component A: Solar plants with a capacity of 500 kW to 2 MW that can be used to sell electricity to the grid.
- Component B: Installation of solar-powered standalone pumps for irrigation.
- Component C: Solarization of existing pumps (15 lakh pumps).
Benefits:
- Affordable Irrigation: Farmers can reduce their electricity or diesel consumption.
- Increased Income: Surplus energy can be sold to the grid, generating additional income.
- Sustainable Farming: Promotes cleaner, more energy-efficient farming practices.
Table: Subsidy Breakdown for PM Kusum Yojana
| Component | Description | Subsidy Percentage | Beneficiaries |
| Component A | Solar plants for farmers (500 kW to 2 MW) | 60% | Farmers, Agricultural Societies |
| Component B | Solar-powered standalone pumps | 60% | Farmers |
| Component C | Solarizing existing pumps | 60% | Farmers |
2. PM Solar Yojana (PM Surya Ghar Muft Bijli Yojana)
Launched in 2024, the PM Solar Yojana aims to promote the installation of rooftop solar systems for residential properties. This scheme encourages homeowners to switch to solar energy by offering subsidies for rooftop solar panels.
Key Features:
- ₹30,000/kW Subsidy for up to 2 kW systems.
- ₹18,000 extra for 3kW systems up to 10kW.
This sums up to a total of 78,000 for systems equal to one above 3kW. - Eligibility: Available to Indian citizens owning residential properties with a roof suitable for solar panel installation.
Benefits:
- Reduced Electricity Bills: Solar power generated from the rooftop can help homeowners reduce their monthly electricity bills.
- Net Metering: Homeowners can sell surplus electricity back to the grid.
- Eco-Friendly: Contributes to reducing carbon emissions and reliance on fossil fuels.
Table: Subsidy for Residential Solar Systems
| System Capacity | Subsidy Amount | Maximum Subsidy Amount | Annual Savings (Approx.) |
| Up to 2 kW | ₹30,000/kW | ₹60,000 | ₹20,000 to ₹30,000 |
| 3 kW to 10kW | ₹60,000 + ₹18,000 | ₹78,000 | >₹30,000 |
3. State-Specific Subsidies
In addition to national schemes, Uttar Pradesh also offers its own solar panel subsidy. Under the state solar subsidy provided by UPNEDA, the customers get a benefit of ₹15,000/kW up to ₹30,000 max. on solar rooftop installations.
4. Net Metering
Under the Net Metering system, individuals or businesses with rooftop solar panels can send the excess power generated back to the grid. This process helps users earn credits for the surplus energy produced. These credits can offset future electricity consumption, providing additional savings.
Key Features:
- Reduction in Electricity Bills: Excess solar energy can be sold back to the grid, leading to reduced monthly bills.
- State-Level Variations: Each state has its own net metering policy, so users must verify the rules applicable to their region.
Read more about Solar Panel Subsidy for Housing Societies.
How Does Solar Panel Subsidy in India Work?
The process of availing the solar panel subsidy in India is simple and involves a few key steps:
- Eligibility Check: First, you need to verify if you meet the eligibility criteria for the subsidy scheme you are interested in.
- Selection of Vendor: Choose a government-approved vendor who will handle the installation of your solar system.
- Installation: Once the vendor is selected, the installation process will begin.
- Subsidy Disbursement: The subsidy is either directly transferred to the vendor or applied to reduce the installation cost.
- Net Metering Setup: If applicable, a net meter will be installed to track the energy produced and consumed.
Eligibility Criteria for Solar Panel Subsidy in India
The eligibility criteria for receiving a solar panel subsidy in India depend on the specific scheme. However, here are some common requirements:
- Indian Citizenship: The applicant must be an Indian citizen.
- Property Ownership: The property where the solar panels are to be installed must be owned by the applicant.
- Roof Availability: The property must have a roof that is suitable for solar panel installation.
- Grid Connection: The property must be connected to the electricity grid for schemes that involve net metering.
Table: General Eligibility Criteria for Subsidy
| Scheme | Eligible Beneficiaries | Minimum System Capacity | Maximum System Capacity |
| PM Kusum Yojana | Farmers, Agricultural Societies | 1 kW | 2 MW |
| PM Solar Yojana (PM Surya Ghar) | Residential Property Owners | 1 kW | 3 kW |
| Net Metering Scheme | Residential, Commercial, and Industrial | Varies | Varies |
How to Apply for Solar Panel Subsidy in India
Applying for a solar panel subsidy in India is a straightforward process. Here is how you can apply for the schemes:
1. PM Kusum Yojana:
- Step 1: Visit the official PM Kusum Yojana portal.
- Step 2: Register your details along with the necessary documents like Aadhaar, land ownership proof, and bank details.
- Step 3: Once approved, the solar system vendor will proceed with the installation.
- Step 4: The subsidy amount is directly transferred to the vendor, reducing your installation cost.
2. PM Solar Yojana:
- Step 1: Register on the PM Surya Ghar Muft Bijli Yojana portal with your property and system details.
- Step 2: Select a registered solar vendor for installation.
- Step 3: After installation, the vendor applies the subsidy and installs the net meter.
- Step 4: The system is set up, and you can start using solar power immediately.
FAQs About Solar Panel Subsidy in India
1. How much subsidy can I get for installing solar panels in India?
The subsidy varies depending on the scheme and the system capacity. For example:
- Under the PM Solar Yojana, you can get up to 60% subsidy for a system under 2 kW.
- For PM Kusum Yojana, farmers can get up to 60% subsidy on solar pump installations.
2. Can I install solar panels without a subsidy?
Yes, it is possible to install solar panels without a subsidy, but the cost will be higher. The subsidy is provided to reduce the initial installation cost, making it more affordable.
3. How long will the subsidy last?
The subsidy is available for a limited period and may change based on government policies. Be sure to check the latest notifications before applying.
4. Are there any maintenance costs after the installation?
Maintenance costs for solar systems are typically low. Vendors may offer free maintenance for the first few years. Regular cleaning and periodic inspections are recommended for optimal performance.
5. How do I apply for the solar panel subsidy in India?
To apply for the subsidy, you need to:
- Register on the respective scheme’s official portal (e.g., PM Surya Ghar, PM Kusum Yojana).
- Submit your application along with necessary documents.
- Choose an authorized solar vendor for installation.
- Once the installation is complete, the subsidy is applied to reduce the cost.
6. Can I install solar panels without a roof?
No, solar panels require a roof or open space to install. The roof should be unshaded, ideally south-facing, and strong enough to support the panels.
7. Is the subsidy available for commercial properties?
Yes, the solar panel subsidy in India is available for both residential and commercial properties. However, specific schemes like PM Solar Yojana mainly target residential installations, while others like PM Kusum Yojana can be used by agricultural and commercial entities.
8. What are the eligibility criteria for availing the subsidy?
Eligibility criteria for solar panel subsidy in India generally include:
- Being an Indian citizen.
- Owning the property where the solar system will be installed.
- Having a suitable roof for solar panel installation.
- In the case of farmers, proof of agricultural land is required under schemes like PM Kusum Yojana.
9. What is the process of net metering, and how does it work?
Net metering allows homeowners to sell excess solar power back to the grid. You generate electricity from your solar panels and use it to meet your household needs. Any surplus power is sent to the grid.
10. How much can I save with solar panels?
The savings with solar panels vary depending on your electricity consumption and system size. On average, you can save anywhere from ₹20,000 to ₹40,000 annually on your electricity bill by installing solar panels.
11. Are there any tax benefits associated with installing solar panels in India?
Yes, the government offers tax incentives for solar energy adoption, including deductions under the Income Tax Act, 1961. Investments in solar systems can be claimed as a tax deduction under Section 80-IA.Besides the solar panel subsidy in India, this tax law also benefits solar rooftop owners.
12. Can I install a solar panel system with subsidy if I live in a rented property?
Yes, you can both own a solar rooftop system and claim solar panel subsidy in India in a rented home. Although, it requires approval from your landlord. You must also ensure that the property’s roof is suitable for installation.
13. What is the typical payback period for solar panels?
The payback period for solar panels in India typically ranges from 5 to 7 years, depending on your electricity consumption, the size of the system, and the solar panel subsidy you get in India. After this period, the electricity generated by the panels is essentially free.
14. Can I get a subsidy for installing solar batteries with my panels?
No. Currently, only solar panel subsidy schemes are available in India.
15. What is the cost of solar panel installation in India?
The cost of installing solar panels in India can vary significantly depending on the system size, location, and type of installation. On average, the cost for a 1 kW solar system can range from ₹35,000 to ₹50,000. With solar panel subsidy offered in India, the cost can be reduced by up to 60% under certain circumstances.
16. Can solar panels work during power outages?
Yes, if your system is equipped with a solar battery or if you have a solar inverter capable of supporting power backup, your solar panels can work during power outages. This is typically more common in off-grid systems.
17. Is there a limit to the amount of solar energy I can generate with the subsidy?
There is no fixed limit to the solar energy you can generate under the subsidy schemes. However, the subsidy is applicable based on the system capacity, which is usually limited to specific capacities like 2 kW or 3 kW for residential properties. For large commercial or agricultural installations, the subsidy can extend to higher capacities.
18. Can I install solar panels in remote areas or villages?
Yes, solar panels can be installed in remote areas and villages, and several government schemes like the PM Kusum Yojana focus specifically on rural and agricultural areas. In fact, off-grid solar systems are often preferred in remote locations with limited access to the grid.
19. How can I verify the solar vendor before installation?
Make sure the vendor you choose is registered with the Ministry of New and Renewable Energy (MNRE) or other government agencies. You can also check for certifications and past customer reviews to ensure the vendor meets quality standards.
20. How many times can I apply for Solar Panel Subsidy in India?
In India, an individual can claim the solar panel subsidy only once.
The solar panel subsidy in India provides a significant opportunity to transition to renewable energy without the heavy initial investment. With various government schemes offering financial assistance and reducing installation costs, adopting solar energy has never been more accessible. Whether you are a farmer looking to solarize your irrigation system or a homeowner wishing to reduce your electricity bill, solar energy can be your solution.
By taking advantage of available subsidies, you can not only save on energy costs but also contribute to a greener future for India. Be sure to research the schemes, check your eligibility, and get started on your journey towards a sustainable energy solution today!
Read More About Solar Panel Subsidy in India:
Solar Panel Subsidy in Uttar Pradesh
Solar Panel Subsidy in Kerala
Solar Panel Subsidy in Rajasthan
Solar Panel Subsidy in Maharashtra
Solar Panel Subsidy in Madhya Pradesh
Solar Panel Subsidy in Gujarat