I have always received many queries from my readers regarding the availability of solar subsidy in India. Though solar energy prices are becoming comparable to the commercial electricity prices in many states of India, it still commands a large upfront spend initially. The government of India had set up JNNSM (Jawaharlal Nehru National Solar Mission) in January 2010 to promote solar energy. In this article I am covering subsidies for solar rooftop panels, solar water pump sets and solar lights. Hope it will help the readers to some extent.

Solar Subsidy For Rooftop Solar

The Government will provide a 30% capital subsidy for rooftop solar installations to residential, government, social and institutional segments only. This subsidy is not available for commercial and industrial customers because they can avail other benefits like accelerated depreciation, tax holidays, excise duty exemptions. India increased its rooftop budget by a significant 730% in January this year. The subsidy level could reach as far as 70% for states such as Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, Lakshadweep and Andaman & Nicobar.

These subsidies will be made available through various state government schemes, Solar Energy Corporation of India (SECI) and other financial institutions (like State Bank of India). It is a much needed step by the Government to promote rooftop solar installations in India.

Solar Subsidy for Solar Water Pumps

The Government also provides a 40% subsidy on capital costs of a solar PV system (SPV), subject to a maximum amount. For availing subsidy on a solar system, it is important to select a supplier who is approved by the Ministry of New and Renewable Energy (MNRE). Only the specified PV systems are eligible for the subsidy. This subsidy scheme is available through NABARD.

The subsidy scheme for solar water pumps differs from state to state. In Rajasthan a farmer typically pays just 14% of the cost of a solar water pump. 30% subsidy is provided under JNNSM scheme and upto 56% is provided by Rashtriya Krishi Vikas Yojana and MNRE. The prices of these pump sets are also coming down each year. The Indian state of Kerala will also distribute 1,380 pumps of 3HP capacity at a subsidy of 30%-35%.

Solar Subsidy for Solar Home Lighting

Subsidy available for solar lights in India:

Source

Since most part of the cost is being borne by the government as subsidy, it goes without saying that there would be red-tapism involved in India. Since the funds are limited, a limited number of these solar products are being given out to the farmers/ customers. It is a process of selection by the government whom they wish to grant subsidy, hence it does not seem to be a very lucrative offer in a large populated country like India. All being said, the government of India is trying hard to promote solar in India, however I wish the process was a little more transparent.

Please feel free to share your story of availing subsidy from the government, or add on points that have not been covered in this article in the comments section. Or you can also email us at greenworldinvestor@gmail.com. This way the community at large will benefit.

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