Complete Guide to Government Solar Subsidies in India 2025

The Indian government has significantly expanded solar incentives in 2025. This guide covers everything you need to know about subsidies, tax benefits, and application procedures. ## PM Surya Ghar Muft Bijli Yojana The flagship residential solar subsidy program launched in 2024 continues with enhanced benefits. ### Subsidy Structure - **1kW systems**: ₹30,000 - **2kW systems**: ₹60,000 - **3kW systems**: ₹78,000 - **4-10kW systems**: ₹78,000 (flat rate) ### Eligibility Criteria 1. Residential property owner 2. Grid-connected electricity connection 3. System installed by empaneled vendor 4. BIS certified and ALMM listed components 5. One subsidy per household ### Application Process 1. Register on National Portal for Rooftop Solar (https://solarrooftop.gov.in/) 2. Get feasibility approval from DISCOM 3. Install system through registered vendor 4. Apply for net metering 5. Submit completion report with photos 6. Receive subsidy via direct bank transfer (30-90 days) ### Important Notes - Subsidy transferred to consumer's bank account (not vendor) - System must use domestically manufactured components - Installation must be completed within 6 months of approval - Net metering mandatory for subsidy receipt ## State-Specific Additional Benefits ### Delhi - Additional generation-based incentive: ₹2/unit for 5 years - Expedited net metering approval (15 days) - Waiver of electricity duty for solar systems ### Gujarat - Accelerated capital subsidy for commercial: ₹10,000/kW (up to 50% of cost) - Exemption from electricity duty - Banking facility for 12 months ### Maharashtra - Generation-based incentive for residential: ₹2/unit for 5 years - Capital subsidy for agricultural: ₹30,000/kW - Net metering up to 1MW for commercial ### Rajasthan - Additional subsidy for SC/ST: ₹15,000 extra - Subsidy for community solar: ₹15,000/kW - Special rates for solar agriculture pumps ### Karnataka - Priority grid connection for solar systems - Reduced processing fees for net metering - Subsidy for apartments/group housing ### Tamil Nadu - Capital subsidy for commercial/industrial: 20% of cost - Banking facility for net metering - TANGEDCO low-interest loans ## Commercial & Industrial Incentives ### Accelerated Depreciation (AD) - **Benefit**: 40% depreciation in first year - **Total depreciation**: 80% in first 2 years - **Eligibility**: All commercial/industrial solar installations - **Impact**: Reduces taxable income significantly **Example Calculation (₹1 Crore system)** - Year 1 Depreciation: ₹40 lakh - Tax Saving (30% rate): ₹12 lakh - Year 2 Depreciation: ₹24 lakh - Tax Saving: ₹7.2 lakh - Total 2-year tax benefit: ₹19.2 lakh ### Generation-Based Incentive (GBI) Some states offer per-unit incentives for commercial solar generation: - Gujarat: ₹2/unit for 5 years - Andhra Pradesh: ₹1.50/unit for 7 years - Madhya Pradesh: ₹2/unit for 5 years ### Concessional Custom Duty - Solar panels: 0% (if domestically manufactured) - Imported components: 25-40% (discourages imports) - Domestic content requirement increasing yearly ## Solar Park Benefits ### Government-Developed Solar Parks - Subsidized land lease: ₹10,000-50,000 per acre/year - Ready infrastructure: Roads, transmission, water - Reduced per-MW development cost - Fast-track clearances and approvals ## Agricultural Solar Schemes ### PM-KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan) **Component A**: 10,000 MW decentralized solar plants on barren land - 30% central subsidy - 30% state subsidy - 30% bank loan - 10% farmer contribution **Component B**: 20 lakh solar agriculture pumps - 30% central subsidy - 30% state subsidy - 30% bank loan - 10% farmer contribution **Component C**: Solarization of 15 lakh grid-connected agriculture pumps - 30% central subsidy - 30% state subsidy ## Green Energy Open Access ### New Regulations 2025 - Open access available from 100kW (reduced from 1MW) - No cross-subsidy surcharge for systems <1MW - Banking facility for 12 months - Virtual net metering for group housing ## Tax Benefits for Individuals ### Section 80C - Loan principal repayment: Deductible up to ₹1.5 lakh ### Section 24 - Loan interest deduction: Up to ₹2 lakh for self-occupied property ### Property Tax Exemption - Many municipalities exempt solar installations from property tax - Check with local authorities ## Green Bonds and Climate Financing ### IREDA Green Loans - Interest rate: 9-10% - Tenure: Up to 10 years - No collateral for systems <₹50 lakh ### Bank Financing - SBI, PNB, HDFC offer dedicated solar loans - Interest rate: 9-12% - Processing fee: 0.5-1% - Learn more about [solar financing options and bank loans](/guides/solar-financing-india) ## How to Maximize Your Benefits ### For Residential Installations 1. Apply for PM Surya Ghar subsidy before installation 2. Check state-specific additional incentives 3. Ensure vendor is empaneled and components are BIS/ALMM certified 4. Claim tax deduction on loan interest (Section 24) 5. Opt for net metering to earn from excess generation ### For Commercial/Industrial 1. Structure installation to claim accelerated depreciation 2. Check eligibility for state GBI schemes 3. Explore open access for large systems 4. Consider solar park development for mega projects 5. Investigate green bonds for financing ## Common Mistakes to Avoid 1. **Installing before subsidy approval**: Apply first, install later 2. **Using non-ALMM components**: Makes you ineligible for subsidies 3. **Unregistered vendors**: No subsidy without empaneled installer 4. **Delayed net metering application**: Can delay subsidy receipt 5. **Incomplete documentation**: Most common cause of subsidy rejection ## Application Timeline - Portal registration: 1 day - DISCOM feasibility approval: 15-30 days - Installation: 7-30 days (depending on size) - Net metering approval: 15-45 days - Subsidy disbursal: 30-90 days post-completion **Total timeline**: 3-6 months from application to subsidy receipt ## Subsidy Amount Examples ### 10kW Residential System (Delhi) - System cost: ₹7,10,000 - Central subsidy (PM Surya Ghar): ₹78,000 - Delhi GBI (estimated 5 years): ₹90,000 - Net metering income (5 years): ₹1,80,000 - Total benefits: ₹3,48,000 - Net investment: ₹3,62,000 - Payback: 2.8 years ### 500kW Commercial System (Gujarat) - System cost: ₹3,25,00,000 - Accelerated depreciation tax benefit: ₹39,00,000 - Gujarat capital subsidy: ₹25,00,000 - GBI (5 years, estimated): ₹60,00,000 - Total benefits: ₹1,24,00,000 - Effective cost: ₹2,01,00,000 - Payback: 4.2 years ## Conclusion With combined central and state subsidies, solar installations in India have never been more financially attractive. The key is proper planning, choosing certified components, and working with registered vendors. For personalized subsidy calculations and application assistance, consult our experts or use our [Solar Calculator](/calculator).