All you want to know about subsidies on Solar Systems

Considering the importance of the overall energy scene in the country, Indian Central as well as State governments, have announced various subsidies and incentives for installing solar systems. To meet the goals of total solar installments, the government is pushing solar energy in a variety of ways. The government has also set aside about Rs. 5,000 crore for solar subsidies. The subsidies are given through the Ministry of New and Renewable Energy (MNRE) and the relevant departments of the state governments.

Hence, if you are planning to adopt solar systems for your home or any commercial establishment, it is worth knowing everything about the subsidies.

At Navitas Solar, India’s one of the top solar system providers, we provide the all-around support that you need for a solar system. Apart from choosing the right solution to the engineering and installation needs, we also support you in availing of the applicable subsidies.

Here is an overview of the subsidies available. Please note that this is just an overview, and it is subject to change as per government policies.

Currently, consumers of solar systems are eligible for various levels of subsidies. It starts from 20% for grid-connected systems and goes up to 90% for agriculture and other off-grid solar systems of the benchmark capital costs. However, the amount of subsidy you will receive for solar panels is determined by the capacity and type of solar system you install. It is usually like this:

It is worth knowing that the subsidy depends on the type of solar system. Usually, solar systems are classified into three categories:

1. Solar On-Grid System
2. Solar Off-Grid System
3. Solar Hybrid System

The solar subsidy does not apply to all of these solar systems. Subsidies are offered for both on-grid and hybrid solar systems (without batteries only). Subsidies for off-grid and hybrid solar systems are no longer available under the current policies.

It is also important to keep in mind that solar subsidy policies differ from state to state. One needs to check with the applicable state’s solar department for subsidy rates before installing a solar system.

The government is devoting special attention to the agriculture sector as part of India’s overall growth. As a result, the Indian government is offering up to a 90% subsidy to farmers and anyone who want to install solar water pumps in their homes.

To promote the use of solar energy in the agriculture field, the Government of India has launched Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) Yojana. It aims at replacing agriculture diesel pumps with solar water pumps and solarise grid-connected agriculture pumps. It is one of the largest initiatives in the world to provide clean energy to more than 3.5 million farmers by solarising their agriculture pumps. Under the scheme, the government provides a 60% subsidy to the farmers and 30% of the cost is given by the government in the form of a loan. Farmers need to pay 10% of the total cost of the project.

However, just like with solar panels, solar water pumps are subject to your state’s policies. Some hilly states, such as J&K and Himachal Pradesh have unique provisions.

If you are curious about who is eligible for a solar subsidy, here is the answer!

• All residential homeowners are eligible for a government solar system subsidy.
• Subsidies are available for registered societies, multi-story apartments, and cooperative group housing societies.
• The subsidy programme is available to farmers who want to put solar pumps in their fields.

Regarding rooftop residential subsidy, this year’s total target is 3GW and it is divided into different states. Gujarat is leading with 1GW tenders already out in the market.

Keen to promote solar energy adoption, the government has radically improved the process of receiving a solar subsidy. The government has made it much easier for you to receive subsidies. To begin with, the government has approved selected solar companies in each state to give the subsidies through an open bidding method. Only these solar firms can offer you a solar subsidy.

This solar firm will install your solar system and submit a net metering request. The net meter is linked to your solar system after the net meter request process is completed. Your solar system’s net meter generates a report, which is then submitted for subsidy.

After sanctioning, your solar system report will be reviewed and the subsidy amount will be routed through the state DISCOMs. Keep in mind that the subsidy will be deposited into the solar company’s account, not yours. After reducing the amount of subsidy, the solar firm will collect the remaining money from you.