When talking about solar energy, the cost of a solar system is discussed before the plan for subsidising solar panels. Let's look at the present status of the solar subsidy programme and process in each Indian state. As I started to put this material together, I finished my own research and talked to a number of solar industry professionals. I couldn't locate the following details:

What exactly does the term "Solar Subsidy" mean?

As is commonly known, solar energy is cost-free, clean, and less dependent on other natural resources like coal and water. The government wants to put solar panels on every building so that each home can generate its own energy.

Why does the government fund solar energy?

India had set a goal of installing 40GW worth of solar panels on residential structures, but as of 2021, it had only installed 5GW. The Indian government has set a goal of installing 280GW worth of solar panels by 2030, or 10GW annually. The government has launched new initiatives to encourage the installation of solar panels at houses, such as allowing any client to have solar panels installed by any solar dealer, distributor, or corporation, and having them provide a photo of the completed installation to the local electricity board.

Subsidy Advantages

There are three parties are involved in the procedure: 1. Customers, 2. Channel Partners, and 3. DISCOMS (Distribution Licensee).


Commercial and industrial sectors are not eligible for the subsidy; it is only accessible for residential homes (individual homes and large apartments). Only grid-connected solar systems (excluding battery systems) are eligible for a solar subsidy. The financial support encourages consumers to invest because installing a solar system requires a significant financial outlay and relieves some of their burden.

Only through the state DISCOM may homeowners install solar systems and apply for subsidies. The nearest channel partner will be registered, and client information will be shared. Here, you can discover the DISCOMS for every state.

The solar installation provider will offer a 5-year performance warranty if you install a solar system using a subsidy programme. After that, you are responsible for maintaining your solar system on your own.

Commercial and industrial customers are not eligible for this subsidy since they can take advantage of other perks including accelerated depreciation, tax holidays, and excise duty exemptions.

Channel Partners

A wider customer base and greater business are advantageous to channel partners. Even though the average individual wants the subsidy very much, it is challenging for him to understand the procedures for receiving it. The channel partner enters the picture at this point. He makes an effort to collaborate with the client and the relevant government agencies in order to hasten the client's eligibility for a subsidy.

Demands for power consumption in the residential sector decline, allowing them to provide more in the commercial sector. We are aware that commercial spaces require more electricity than do homes.

The average cost per kilowatt in India for installing a solar system with the most recent technology is Rs. 60,000, though prices vary slightly from state to state. This is the average price, without subsidies, for a product, installation, and service during a five-year period with a net metering facility.

People can install solar rooftop systems thanks to incentive programmes offered by the federal and state governments. States in broad categories receive a 30% grant from the federal government for these systems. The central government provides subsidies of up to 70% for special states like Uttarakhand, Sikkim, Himachal Pradesh, Jammu & Kashmir, and Lakshadweep.

The typical cost of installing a rooftop PV system without a subsidy should be between Rs. 60,000 and 70,000. The consumer must produce between 1100 and 1500 kWh annually in order to qualify for the generation-based incentive.