Government Subsidies & Incentives For Installing Solar Panel System In India

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A rooftop solar system is one of the best home additions – how? When you have a rooftop solar system at home (or your housing society, for that matter), your electricity bill will see a very significant drop.

However, the cost of installing a rooftop solar system is a little on the higher side. This is why MNRE offers a subsidy on solar panels to homeowners and CHS (housing societies).

There’s a lot of curiosity and very little knowledge about the know-how of availing of a solar panel subsidy in India.

Considering its uses, we’ve articulated this post that sheds light on state-by-state subsidies. Let’s unearth the secrets now!

Who can benefit from subsidies for installing solar panels in India?

Not everybody can avail of a solar panel subsidy. There’s a criterion that has to be met. Here’s it:

  1. Only ALMM-approved DCR modules are covered by the subsidy.
  2. Only individual homeowners and housing societies get a solar panel subsidy in India.
  3. Commercial and industrial establishments do not get subsidies.

What are the benefits of solar panel subsidies and incentives?

Since the cost of solar systems can be a little expensive for some people, the government offers incentives in form of subsidies in order to:

  • Encourage mass adoption of solar power.
  • Financially help people who are installing rooftop solar systems at homes and housing societies.

What are the State-wise Subsidy rates in India?

The 8 primary states we’ll be talking about include: Maharashtra, MP, Rajasthan, Gujarat, Uttar Haryana, Delhi, UP, and Chattisgarh.

Most Indian states offer a subsidy of:

  • 40% on L1 rates for a solar system between 1 KW to 3 KW
  • 20% on the L1 rates for a solar system above 3 KW and up to 10 KW.

For housing societies, the solar panel subsidy is 20% on the L1 rates up to 500 KW.

Moving on, let’s give you the L1 rates for every state.

1. Solar panel subsidy in Maharashtra with GST

The L1 price (inclusive of GST) in Maharashtra is:

  • Rs. 47,113.20/KW for solar systems between 1 KW to 3 KW
  • Rs. 45,064.80/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Maharashtra:

Subsidy for 1 KW = Rs. 18,845.28

Subsidy for 2 KW = Rs. 37,690.56

Subsidy for 3 KW = Rs. 56,535.84

Subsidy for 4 KW = Rs. 63,150.72

Subsidy for 5 KW = Rs. 72,223.68

2. Solar panel subsidy in MP without GST

MP has three major discoms: Bhopal, Jabalpur, and Indore. The L1 prices for all these three cities are different.

L1 prices (without GST) for Bhopal:

  • ₹39,100.00/KW for solar systems between 1 KW to 3 KW
  • ₹38,800.00/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Bhopal:

Subsidy for 1 KW = Rs. 15,640

Subsidy for 2 KW = Rs. 31,280

Subsidy for 3 KW = Rs. 46,920

Subsidy for 4 KW = Rs. 54,320

Subsidy for 5 KW = Rs. 62,080

L1 prices (without GST) in Indore:

  • ₹38,238.00/KW for solar systems between 1 KW to 3 KW
  • ₹37,301.00/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Indore:

Subsidy for 1 KW = Rs. 15,295.2

Subsidy for 2 KW = Rs. 30,590.4

Subsidy for 3 KW = Rs. 45,885.6

Subsidy for 4 KW = Rs. 52,221.4

Subsidy for 5 KW = Rs. 59,681.6

L1 prices (without GST) in Jabalpur:

  • ₹38,000.00/KW for solar systems between 1 KW to 3 KW
  • ₹37,000.00/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Jabalpur:

Subsidy for 1 KW = Rs. 15,200

Subsidy for 2 KW = Rs. 30,400

Subsidy for 3 KW = Rs. 45,600

Subsidy for 4 KW = Rs. 51,800

Subsidy for 5 KW = Rs. 59,200

3. Solar panel subsidy in Delhi without GST

The L1 prices of solar panels in Delhi without GST are:

  • Rs. 39,000/KW for solar systems between 1 KW to 3 KW
  • Rs. 37,500/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Delhi:

Subsidy for 1 KW = Rs. 15,600

Subsidy for 2 KW = Rs. 31,200

Subsidy for 3 KW = Rs. 46,800

Subsidy for 4 KW = Rs. 52,500

Subsidy for 5 KW = Rs. 60,000

4. Solar Panel subsidy in UP without GST

The L1 prices for solar systems in UP without GST are:

  • ₹37,000.00/KW for solar systems between 1 KW to 3 KW
  • ₹33,000.00/KW for solar systems above 3KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in UP:

Subsidy for 1 KW = Rs. 14,800

Subsidy for 2 KW = Rs. 29,600

Subsidy for 3 KW = Rs. 44,400

Subsidy for 4 KW = Rs. 46,200

Subsidy for 5 KW = Rs. 52,800

5. Solar panel subsidy in Rajasthan without GST

The L1 prices of solar panels in Rajasthan without GST are:

  • Rs. 40,991/KW for solar panels between 1 KW to 3 KW
  • Rs. 43,500/KW for solar panels above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Rajasthan:

Subsidy for 1 KW = Rs. 16,396.4

Subsidy for 2 KW = Rs. 32,792.8

Subsidy for 3 KW = Rs. 49,189.2

Subsidy for 4 KW = Rs. 60,900

Subsidy for 5 KW = Rs. 69,600

6. Solar panel subsidy in Chhattisgarh without GST

The L1 prices in Chhattisgarh without GST are:

  • ₹42,000.00/KW for solar systems between 1 KW to 3 KW
  • ₹40,500.00/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Chhattisgarh:

Subsidy for 1 KW = Rs. 16,800

Subsidy for 2 KW = Rs. 33,600

Subsidy for 3 KW = Rs. 50,400

Subsidy for 4 KW = Rs. 56,700

Subsidy for 5 KW = Rs. 64,800

7. Solar panel subsidy in Gujarat without GST

The L1 prices in Gujarat without GST are:

  • ₹42,000.00/KW for solar systems between 1 KW to 3 KW
  • ₹40,500.00/KW for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Gujarat:

Subsidy for 1 KW = Rs. 16,800

Subsidy for 2 KW = Rs. 33,600

Subsidy for 3 KW = Rs. 50,400

Subsidy for 4 KW = Rs. 56,700

Subsidy for 5 KW = Rs. 64,800

8. Solar panel subsidy in Uttar Haryana With GST

The L1 rates in Uttar Haryana with GST are:

  • ₹39,450.00 for solar systems between 1 KW to 3 KW
  • ₹38,090.00 for solar systems above 3 KW and up to 10 KW

Here’s the KW-wise solar panel subsidy in Uttar Haryana:

Subsidy for 1 KW = Rs. 15,780

Subsidy for 2 KW = Rs. 31560

Subsidy for 3 KW = Rs. 47,340

Subsidy for 4 KW = Rs. 53,326

Subsidy for 5 KW = Rs. 60,944

Solar installation cost with and without a solar panel subsidy

There can't be one fixed installation cost for every solar system – the module varies, the brand varies, and so do the value-added services a consumer might wish to buy.

Accordingly, there's a broad price range:

Every KW can cost between Rs. 45,000 to Rs. 70,000.

  • If you install a 3 KW solar system in Maharashtra, it would cost Rs. 2,10,000 (supposing you chose the best module worth Rs. 70,000/kW).
  • The subsidy for a 3 KW solar system in Maharashtra is Rs. 56,535.84.
  • So, after subsidy, you'll have to pay just Rs. 1,53,464.16.

Following the same calculations, you can figure out the approximate cost of a solar system in your state with and without a solar panel subsidy.

National Solar Subsidy (DBT) scheme

Did you know that now there's a different form of subsidy scheme? A National Portal for Solar Rooftop was launched by PM Narendra Modi on the 30th of July, 2022. This nationwide subsidy scheme is known as the DBT (Direct bank transfer) scheme.

The key differences between state-wise solar panel subsidy and DBT subsidy are:

  • Customers pay the entire installation cost to the solar vendor in the DBT scheme.
  • Unlike the state-wise program where the discom disburses subsidies to the solar vendor, the subsidy in DBT is directly transferred to the bank account of the customer within 30 days after the commissioning of the solar system. It's a much simpler process.

Conclusion:

The government has been offering a solar panel subsidy so that more and more homeowners and housing societies install rooftop solar systems.

However, the solar panel subsidy won't last forever. India is aiming to generate 4 GW worth of solar electricity through residential rooftop solar systems by the end of December 2024.

Once the target is met, solar panel subsidy will be a thing of the past.

Being the future face of the world, everybody will eventually install solar systems. Hence, installing one now while there's still the option to get a subsidy is the smarter thing to do.