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Solar Panel Subsidy in India [2022]

3 February 2022 at Waaree
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Today India is one of the leading countries with the highest rate of Solar Panel installations globally. This green initiative has led to a revolutionary change where each of us contributes our grain of sand to preserving and caring for the environment surrounding us.

Moreover, it helps in avoiding Co2 emissions into the atmosphere, unlike what happens when energy is obtained from the combustion of non-renewable sources such as oil or coal, an issue increasingly sought in all areas and sectors.

What is a solar subsidy?

Our Indian government has made several efforts to increase the use of solar panels in residential and commercial sectors. The government has started the solar subsidy scheme to install solar panels as financial aid to make this initiative more effective. This subsidy for self-consumption allows a saving in your installation of between 40% and 50%.

These grants, intended mainly for installations in single-family homes or neighborhood communities, can be requested by anyone who wants to install solar panels in their home. Now that you know how one can avail of a subsidy let us discuss the other aspects, such as the benefits of the solar system for homes in the Indian Government Subsidy. But before that, here is why the government looks forward to providing these solar panel government subsidies.

Why does the Government of India give Solar Subsidies?

With the ever-growing power consumption, India is looking forward to a sustainable form of energy. And when you think of an economical and environmentally-friendly source of power, solar energy strikes your mind. India receives abundant solar energy throughout the year, and hence this method is the best and most convenient.

However, to make use of solar energy, you require solar systems. And to set up solar systems, you need to have solar panel subsidies to match the costs and expenses. The government offers various solar panel subsidies that help you manage your costs and set up a rooftop solar system affordably to meet these financial requirements.

Keeping this in mind, the Government of India has initiated a project called the Solar Rooftop Power Plant. This initiative mainly encourages people to use solar energy to save electricity and reduce the load on other fuels.

But before diving into this, let us be clear about what a solar panel subsidy is. Like any other subsidy, a solar panel government subsidy is a financial aid or support the Government of India provides to people for setting up solar panels.

Here is why the Government of India is doing so:

  1. Firstly, solar energy is a renewable and clean source of energy that reduces the usage and dependency on non-renewable natural resources like coal and other fuels. It is a more sustainable and eco-friendly source of energy and does not contribute to pollution.

  2. Apart from that, providing subsidies will encourage people to set up solar systems on the roof of their houses. Doing this will help people to generate self-energy and have a positive effect on the environment.

  3. Making the residential sector self-sufficient in electricity can help save a lot of energy. Commercial and industrial sectors consume large amounts of electricity per day. Hence, by directing the electricity saved from the residential sector to the commercial one, you can fulfil the energy demands of these sectors.

What are the Benefits of the Solar Panel Subsidy?

Using a solar subsidy provided by the Government of India has various benefits. Here are some of them:

  • Setting up a solar system requires investing a lot of money. The solar subsidies provide financial aid in such situations and take the burden off your shoulders.

  • The amount issued by the government differs depending on the kW of energy the solar system will generate. For example, for up to 3kW, the solar panel subsidy is 40% of the total cost, while for 4kW to 10kW, it is 20%. You choose the subsidy as per your requirements.

  • Build your rooftop solar system by using the subsidy. You can get an additional incentive of Rs.1 per unit on the total solar power that you generate on the electricity bills annually.

However, these subsidies are only available for residential homes, not the commercial sector. You can avail it only for the Grid Connected Solar System, that is, a system without the use of batteries.

What are the Demerits of the Solar Panel Subsidy?

The solar panel government subsidy has a few demerits that you need to know before applying for it. The two major disadvantages of solar subsidies are listed below.

  • Firstly, the warranty period issued through these subsidies is five years, and this warranty is less than the time offered by other private companies. In addition, you are required to change the inverter every 5-7 years, which further adds to your cost.

  • You cannot choose an installation company of your choice. If you install a solar system through this subsidy, you cannot select the top brands of your choice, and your options are limited.

  • Although you apply for the subsidy and use it for setting up your solar panel on your roof, it still requires the investment of money from your end as the Government of India does not sponsor the entire amount.

  • The subsidy is only limited to residential owners. The commercial and industrial sectors are not eligible for it as they can avail several other benefits like accelerated depreciation and excise duty exemptions.

How much is the subsidy?

  1. 40% for capacity up to 3 kWp

  2. 20% for capacity for more than 3 kWp and up to 10 kWp

  3. 20% for GHS/RWA capacity up to 500 kWp. It is limited to 10 kWp per house and a total up to 500 kWp.

Solar Panel Subsidy Cost Estimation

You can issue solar panel subsidies from the central government and the state government. However, to avail of these subsidies, the total cost of installation without the solar subsidy should fall between Rs. 60,000 - 70,000. You can get generation-based incentives depending on the amount of power generated per year. You must generate at least 1100 kWh - 1500 kWh per year to avail of this.

The central government pays up to 30% of the expenses in most of the states. However, states like Uttarakhand, Himachal Pradesh, Sikkim, Lakshadweep islands, and Jammu and Kashmir can get up to 70% of subsidies from the government. There are special subsidies for farmers that provide subsidies up to 90% on water pumping systems.

To avail of these subsidies, a person should follow the protocols and contact the electricity provider. After the electricity provider visits for inspection and provides approval, you can apply for the solar panel subsidy and enjoy all the benefits.

Solar panel subsidy in India, 2022 (Updated)

With this increasing amount of solar panel installations in India, here are some essential points to note about the subsidy scheme in different states, along with some necessary details.

Solar Panel Subsidy in Maharashtra

In Maharashtra, the solar subsidy is done by the MEDA, helping people get easy installations of solar panels by assisting them financially over subsidy. Here is some information related to the installation.

  • State subsidy amount - 30% of the standard cost

  • Rooftop solar system size - Up to 10 kW

You can apply by visiting the online site of MEDA for solar panel installation.

Solar Panel Subsidy in Uttar Pradesh

Uttar Pradesh is one of the top states in installing solar panels to save our non-renewable sources. The state government has declared a subsidy of Rs. 15,000 per kW for the residential installations. Here are some details regarding the subsidy in the state.

  • State subsidy amount- Rs. 15,000-20,000 Up to 10kW

  • Rooftop solar system size- Up to 10 kW

Solar Subsidy in Madhya Pradesh

One of the largest states in the country, Madhya Pradesh, also contributes significantly. Here are the details about the solar panel subsidy.

  • State subsidy amount- 40% for first 3 KWp, 20% for each additional KWp up to 10kW

  • Rooftop solar system size- Up to 10 kW

Solar Panel Subsidy in Haryana

Haryana is significantly contributing its bit towards building earth a better place for our future generation by many solar panel installations. Below is the necessary information regarding the same.

  • State Subsidy amount- 30% of the standard cost

  • Rooftop solar system size- Up to 10 kW

You can apply by visiting the online site of HAREDA and submit the application for the solar panel installation.

Solar Panel Subsidy in Kerala

Kerala has aimed to turn the homes into power stations by installing solar panels in every house possible. So before the installation, here are some details provided by the state government.

  • State subsidy amount- 40% for first 3 KWp 20% for each additional KWp up to 10kW

  • Rooftop solar system size- Up to 10 kW

Solar Panel Subsidy in Bihar

Bihar government has joined this green venture and provides the necessary subsidy over solar panel installation in the state. Here is some information you should know before installing the solar panel.

  • State Subsidy amount- 25% subsidy over the installation cost

  • Rooftop solar system size- minimum 1kW

BREDA manages the solar panel subsidy in Bihar. You can apply online for prompt installation by visiting their site.

You can also read: Solar Financing Options: How To Find The Best Solar financing?

How to avail of the subsidy?

The benefits are referred to as CFA - Central Financial Assistance in central terms. Customers who wish to get the benefits have to approach Power Distributing companies (DISCOMs) in their area, as this government scheme is to be implemented through the state (DISCOMs).

You can apply for the solar panel installation both online and offline, or you can contact the respective power distribution company (DISCOM) in your state.

If you're looking forward to installing a solar panel on your rooftop to generate solar power, you need to select the best company for yourself. The money you invest in setting up solar panels should be worth it.

One such company that offers high-quality, long-lasting, and excellent solar energy products are Waaree Energies Ltd. The company has India's largest Solar PV Module capacity at its plants in Gujarat. Waaree has over 350 units in India and has a presence in 68 countries internationally.

The engineers and professionals at Waaree are highly knowledgeable and have abundant experience in the field. They are top players in providing solutions to rooftop solar systems, solar water pumps, and other solar project development. Get in touch with Waaree Energies and start your sustainable journey.