10 Ways to Save Money with Residential Solar Panel Subsidy in India

India is rapidly transitioning towards renewable energy, with solar power leading the charge. To encourage residential solar adoption, the Indian government provides subsidies and incentives, making solar panels more affordable for homeowners. This comprehensive guide covers everything you need to know about residential solar panel subsidy in India, including eligibility, benefits, and the application process.

Understanding Residential Solar Panel Subsidies in India

​Residential solar panel subsidy in India are government incentives designed to encourage homeowners to adopt solar energy by reducing the financial burden of installing rooftop solar systems. These subsidies are part of India’s broader strategy to promote renewable energy, reduce carbon emissions, and achieve energy sustainability.​

Key Features of the Residential Solar Panel Subsidy:

• Financial Incentives: The government provides subsidies covering a significant portion of the installation costs. Under the PM Surya Ghar Muft Bijli Yojana, for example, a subsidy of 60% is offered for systems up to 2 kW capacity, and 40% for additional capacity between 2 to 3 kW.

• Eligibility Criteria: To qualify, applicants must be Indian citizens residing in their own homes with suitable rooftop space for solar panel installation. The house should have a valid electricity connection, and the applicant should not have previously availed of any other solar panel subsidy. ​

• State-Specific Variations: While the central government sets broad guidelines, individual states may offer additional incentives or have specific procedures. It’s essential to check with local authorities for state-specific programs.​

• Net Metering: Many states implement net metering policies, allowing homeowners to feed surplus solar energy back to the grid in exchange for credits on their electricity bills. However, policies vary by state, so it’s advisable to consult local electricity distribution companies.

Types of Residential Solar Panel Subsidies in India

The government offers various subsidies and incentives at both the central and state levels. Here’s a breakdown of available financial support:

Central Government Subsidies

The central government provides financial incentives to encourage the adoption of solar energy across the country. One of the key schemes includes:​

Rooftop Solar Subsidy Scheme: Under this scheme, homeowners can receive subsidies covering a significant portion of the installation cost. The solar panel subsidy structure is as follows:​

This structure ensures that homeowners receive substantial financial support, making solar installations more affordable.​

State Government Subsidies

In addition to central incentives, several state governments offer their own subsidy programs to promote solar energy adoption. These programs vary in terms of subsidy amounts, eligibility criteria, and application procedures. Examples include:​

• Uttar Pradesh: The state government provides a subsidy of ₹15,000 per kW for rooftop solar installations. ​
• Gujarat: Gujarat offers attractive solar panel subsidy schemes for residential solar installations, aiming to boost renewable energy adoption.

It’s essential to consult the respective state government’s official websites or energy departments for detailed information on available subsidies, as they are subject to change and may have specific eligibility criteria.​

PM Surya Ghar: Muft Bijli Yojana

Launched in February 2024, the PM Surya Ghar: Muft Bijli Yojana aims to provide free electricity to households by promoting rooftop solar installations. Under this scheme, households receive a solar panel subsidy covering up to 40% of the installation cost, making solar energy more accessible to a broader population.

PM-KUSUM Scheme

The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme primarily targets farmers, encouraging them to adopt solar energy for agricultural purposes. While its focus is on the agricultural sector, residential areas near agricultural zones may also benefit from its incentives. The scheme offers a 60% subsidy, with 30% provided by the central government and 30% by the state government, covering the remaining 40% of the installation cost by the beneficiary.

State-Specific Programs

Beyond the aforementioned schemes, various states have introduced their own programs to promote solar energy adoption among residents. These programs may include additional financial incentives, tax benefits, or rebates. For instance:​

• Kerala: The state government offers a solar panel subsidy of ₹15,000 per kW for rooftop projects, aiming to encourage homeowners to switch to solar energy.
• Maharashtra: Maharashtra has implemented programs to support residential solar installations, contributing to the state’s renewable energy goals.

Eligibility Criteria for Residential Solar Panel Subsidy

To qualify for the solar panel subsidy in India, homeowners must meet the following requirements:

• The applicant must be an Indian resident.
• The property must be a residential unit (subsidies are not for commercial or industrial units).
• The solar system must be grid-connected.
• The system must be installed by an MNRE-approved vendor.

How to Apply for a Residential Solar Panel Subsidy

Visit the Official Portal

• National Portal for Rooftop Solar: The Ministry of New and Renewable Energy (MNRE) provides a centralized platform for applying for rooftop solar installations. Access the portal at https://pmsuryaghar.gov.in/.​

Register as a Consumer

• Create an Account: On the portal, navigate to the consumer section and select “Apply Now.” Fill in the required details, including your state, district, electricity company, customer account number, mobile number, and email address.

Application Submission

• Fill the Application Form: Complete the online application form with accurate information about your household and electricity usage.​
• Document Upload: Upload necessary documents, such as proof of identity, proof of residence, and electricity bill.​

Site Assessment

• Technical Evaluation: After submission, your electricity company will assess the structural feasibility of installing solar panels on your rooftop.
• Site Visit: A technical team may visit your residence to conduct a site survey and determine optimal system specifications.​

System Installation

• Selection of Vendor: Choose an empaneled vendor from the list provided on the portal. It’s advisable to select a vendor based on reviews, experience, and warranty offerings.​
• Installation Process: The selected vendor will install the solar panel system as per the approved design and specifications.​

Subsidy Processing

• Subsidy Release: Upon successful installation and verification, the government subsidy will be credited directly to your bank account.​
• Monitoring: You can track the status of your application and subsidy disbursement through the portal.​

Benefits of Residential Solar Panel Subsidy in India

1. Reduced Installation Costs

• Subsidy Coverage: The government offers financial support to reduce the cost of installing solar panels. Depending on the scheme, homeowners can receive a solar panel subsidy of up to 30-40% of the total installation cost, which significantly reduces the financial burden of adopting solar energy.
• Affordable Investment: With the subsidy, the initial investment required for installing solar systems, including panels, inverters, and wiring, becomes far more affordable for residential consumers.

2. Energy Independence

• Lower Dependence on Grid Power: By installing solar panels, homeowners can generate their own electricity, reducing reliance on the grid. This results in less vulnerability to power outages and fluctuating electricity prices.
• Self-Sufficient Energy Generation: Residential solar systems allow users to produce enough energy for their homes, ensuring a more self-sufficient and reliable energy source.

3. Significant Reduction in Electricity Bills

• Savings on Monthly Electricity Bills: Solar power systems can drastically cut down electricity costs, especially for households that consume significant amounts of electricity. In some cases, the savings on energy bills can help recover the cost of the solar system in just a few years.
• Net Metering Benefits: Many states in India offer net metering facilities, where excess energy generated by solar panels can be fed back into the grid, and homeowners can receive credits on their electricity bills for the energy they supply.

4. Increased Property Value

• Attractive for Future Buyers: Installing solar panels increases the market value of a property. Potential buyers are attracted to homes with solar energy systems due to their long-term energy savings and environmental benefits.
• Sustainable Investment: A home with a solar energy system is seen as a modern, eco-friendly investment, which can be a strong selling point when putting the house on the market.

5. Contribution to Environmental Sustainability

• Reduction in Carbon Footprint: By adopting solar energy, homeowners actively contribute to the reduction of their carbon footprint. Solar power is a clean, renewable energy source that does not emit harmful greenhouse gases.
• Sustainable Energy for the Future: The widespread adoption of residential solar panels helps India move closer to its renewable energy targets, supporting efforts to reduce dependence on fossil fuels and combat climate change.

6. Government Support and Schemes

• Multiple Government Schemes: Several subsidy schemes, such as the PM-KUSUM Scheme and the Rooftop Solar Program, offer substantial financial assistance for residential solar installations. These schemes are part of India’s broader effort to achieve its renewable energy goals.
• Additional State-Level Incentives: In addition to central government subsidies, many states also provide additional incentives for installing solar panels, making it even more affordable for homeowners in certain regions.

7. Low Maintenance and Longevity

• Low Maintenance Costs: Solar power systems are relatively low-maintenance. Regular cleaning and occasional checkups are sufficient to keep the system running efficiently. Most solar panels come with warranties of 20-25 years, ensuring long-term performance.
• Durability: Solar panels are designed to last for decades, and many manufacturers offer extended warranties, making them a long-term, hassle-free solution for homeowners.

8. Access to Financing Options

• Easy Financing Options: To further reduce the financial barrier, many banks and financial institutions in India offer low-interest loans specifically for solar energy installations. This, combined with the subsidy, makes it even easier for homeowners to afford solar power systems.
• EMI Schemes: Several solar companies and financial institutions offer flexible EMI (Equated Monthly Installment) schemes, making it easy to pay for the system over time while still enjoying the benefits of reduced energy bills.

9. Job Creation and Economic Growth

• Support for the Solar Industry: By adopting solar energy, homeowners contribute to the growth of the solar power industry, which in turn helps create jobs in manufacturing, installation, and maintenance.
• Boost to Local Economy: Solar installations create a positive ripple effect in the local economy by encouraging the development of the renewable energy sector, manufacturing facilities, and skilled labor.

10. Energy Security

• Sustainability and Resilience: Solar energy is a renewable resource, unlike fossil fuels, which are finite. By relying on solar power, homeowners contribute to energy security, both on an individual and national scale.
• Reduced Vulnerability to Price Fluctuations: Solar energy provides protection from fluctuating energy prices and price hikes by enabling individuals to generate their own electricity.

Challenges in Availing Residential Solar Subsidy

While solar subsidies are beneficial, there are some challenges:

• Lengthy approval process with DISCOM verification.
• Limited awareness about state-level incentives.
• Initial investment cost even after subsidy reduction.
• Availability of MNRE-approved vendors in some regions.

To overcome these challenges, it’s important to stay informed and choose the right vendor.

Future of Residential Solar Panel Subsidy in India

The Indian government is committed to achieving 500 GW of renewable energy capacity by 2030. Future plans include:

• Simplifying subsidy disbursement processes.
• Increasing solar adoption rates with better financial incentives.
• Encouraging private sector participation in solar financing.

Frequently Asked Questions (FAQs)

1. Who is eligible for a residential solar panel subsidy in India?

• Any Indian homeowner with a grid-connected solar system installed by an MNRE-approved vendor.

2. What is the maximum subsidy amount available?

• Up to 40% for systems up to 3 kW and 20% for systems up to 10 kW under the Rooftop Solar Programme Phase II.

3. How long does it take to get a solar subsidy?

• The process can take 1-3 months, depending on DISCOM approvals and vendor availability.

4. Are there tax benefits for installing solar panels?

• Yes, under Section 80-IA of the Income Tax Act, homeowners can claim deductions for solar investments.

5. Can I install solar panels without availing of the subsidy?

• Yes, but government subsidies significantly reduce costs, making it a more affordable investment.

Conclusion

In conclusion, the residential solar panel subsidy in India represents a significant opportunity for homeowners to transition to clean and renewable energy while also reducing their electricity bills. The government’s initiatives are designed to make solar energy more affordable, but despite these incentives, many challenges remain in availing the solar panel subsidy. From high initial costs and complex application processes to delays in subsidy disbursements and a lack of awareness, these barriers continue to hinder widespread adoption.

To unlock the full potential of the solar panel subsidy, it is essential for the government, industry stakeholders, and consumers to collaborate. Increased awareness campaigns, streamlined application procedures, and better infrastructure support can make solar adoption more accessible for a larger segment of the population. Moreover, ensuring that the solar panel subsidy reaches the intended beneficiaries in a timely manner is crucial for making solar energy a viable and affordable solution for homeowners across India.

The solar panel subsidy plays a vital role in helping homeowners make the transition to renewable energy. However, overcoming the hurdles that exist within the system will ensure that more individuals can benefit from these programs. As India strives to meet its renewable energy targets, addressing the challenges related to solar subsidies will be critical in scaling up solar energy adoption nationwide.

If you’re looking to benefit from the residential solar panel subsidy and make your home more energy-efficient, Soleos Solar is here to help. We simplify the process of applying for and securing your solar panel subsidy, ensuring you get the maximum benefit while reducing your electricity costs. Contact us today to learn more about how we can assist you in your transition to clean, affordable solar energy!