Solar Ongrid Subsidy Scheme

To boost the usage of solar energy in the residential sector, India has a solar subsidy programme in place. It reduces the financial burden of installing solar panels, by providing financial assistance to consumers.With this incentive, residential consumers can save up to 60% of their installation cost. Moreover, individuals from across the country can apply for these grants. But how much is the incentive and how can individuals claim it? Let’s understand it further.

• Solar energy systems with a capacity of up to 2 kW are eligible for a subsidy of up to ₹30,000/ kW.
• For a system capacity of 3kW, consumer can avail a subsidy of ₹78,000.
• For all system capacities exceeding 3kW, a fixed subsidy of ₹78,000 will be provided.

The CFA is calculated based on either the module capacity or the inverter capacity, whichever is lower. Apart from this, certain Indian states such as Jammu and Kerala also provide their own separate state solar subsidy in addition to the CFA to promote clean energy adoption. However, as the government moves towards a uniform solar subsidy, there is limited clarity on how long such state-specific incentive schemes will be in place.

System Capacity

At the end of 2022, the Indian government announced that it was implementing the Rooftop Solar Programme Phase II. Under the scheme, the Ministry of New and Renewable Energy (MNRE) will provide Central Financial Assistance to residential consumers for installing rooftop solar systems (RTS).The programme will be implemented by DISCOMs and respective state agencies. The best part about the CFA is that it offers direct benefit transfer (DBT), i.e. consumers will directly receive the incentive in their bank accounts. Who is the CFA for?

Currently, CFA is available to residential consumers with a grid-connected solar plant. Moreover, group housing societies and RWAs of solar capacities up to 500kW can also avail the incentive. MNRE has set certain stipulations that have to be met to avail the subsidy, which we will discuss in the coming sections. First, let’s break down the subsidy amount.With the introduction of the CFA, subsidy calculations have been largely simplified. Also, the incentive amount is equal for consumers from all states, except the northeastern states and certain union territories.