Everything About Solar Panel Subsidy In India in 2022

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India’s geographical location is very close to the equator, therefore the potential of the country to harness renewable energy such as solar power is tremendous. The country every year receives around 5000 trillion KWh energy and if we look at an average most of the part of India receives 4 to 7 kWh per sq. m per day.

In recent years India as a country has emerged as one of the most prominent regions in the deployment of renewable energy resources such as solar energy and creating a visible influence all over the world. Globally, in terms of solar energy adaptation, India holds the 5th position with a capacity of more than 50 gigawatts (GW) that was installed at the end of January 2022.

In order to make rapid progress and further enhancements in solar energy adaptation, the government of India has taken many different approaches and initiatives and one of them is to offer financial incentives through solar panel subsidy in India. That means if any resident of India is willing to install solar panels then he or she will be eligible to receive a solar panel subsidy from the government of India for residential solar panel installation.

More about the solar panel subsidy program undertaken by the Indian government

After evaluating the potential of adapting to solar energy in India and its tremendous benefits as well as a noteworthy and positive impact on the environment, the Indian government is encouraging its citizens to make use of solar energy for the consumption of electricity. The majority of people in India are hesitant about adopting solar energy due to the massive installation cost as well as the lack of awareness about its benefits and the solar panel subsidy.

Both the state and central governments offer solar panel installation subsidy schemes for the people who are eager to install rooftop solar panels. In a wide country like India where the energy or electricity consumption is very high, adapting to solar energy can be the best option for the people of India.

With the installation of solar panels on the rooftop people can not only significantly reduce their monthly electricity bills but at the same time they can also reduce the carbon footprint on the environment. Moreover, with the help of grid-connected solar electricity systems, the consumer can release excessive electricity to the grid itself.

Government initiatives for solar panel subsidy

The government of India is offering solar panel subsidy only for the residential sector and as per the Ministry of New and Renewable energy, the central government is offering 40 percent of the total standard installation cost as the subsidy for installing roof top solar panels in properties and homes.

However, there are exceptions for the following states:

  • Sikkim
  • Himachal Pradesh
  • Jammu and Kashmir
  • Lakshadweep
  • Uttarakhand

Particularly, for the above-mentioned states, the Union government offers a subsidy of 70 percent on standard solar system installation costs for roof top solar systems. If a person wants to install the solar system, he or she can also avail of GBI or generation-based incentive but the condition is to generate around 1100 to 1500 kWh per year.

Solar panel subsidy Type of residence
40 percent of the total Installation cost Capacity up to 3KW
20 percent of the total Installation cost Capacity more than 3KW but less than 10KW
20 percent of the total Installation cost Common facilities (RWA/GHS) with the capacity of 500KW

Solar subsidies offered by the different state governments

Multiple state governments are also actively offering solar panel subsidy to people who are installing the same. State governments of Kerala, Madhya Pradesh, West Bengal, Uttar Pradesh, etc. are offering significant subsidy rates on total standard installation cost.

The whole point of providing solar panel subsidy by the government of India is to actively adapt to solar energy for electricity generation and consumption. The subsidy also benefits both the people and the government. Most importantly people can save a lot of money while installing the system as well as save on electricity bills in the long run.