Rooftop Solar Subsidies in India (2025)
India continues to promote rooftop solar through a mix of central and state incentives. As of 2025, residential homeowners can access Central Financial Assistance (CFA) under MNRE’s Grid-Connected Rooftop Solar Program. Businesses get tax breaks and net-metering benefits. This guide covers all the key 2025 incentives for residential and commercial rooftop solar, with exact subsidy figures and official sources.
Residential Sector
National-level Incentives
The Central Rooftop Solar Programme (Phase II) currently provides direct subsidies to residential consumers as follows: ₹30,000 per kW for the first 2 kW of installed capacity and ₹18,000 per kW for the 3rd kW. This subsidy is capped at a maximum of ₹78,000 per household. For example, a 3 kW rooftop system receives the full ₹78,000 subsidy. Systems larger than 3 kW still receive the maximum capped amount of ₹78,000.
The subsidy amount is credited directly to the consumer’s bank account after installation and inspection via the national MNRE solar portal.
Aside from CFA, the central scheme also incentivizes net metering (every state’s electricity regulator provides net-metering or gross-metering) so homeowners can sell excess power to the grid. As a result, 21 of India’s 29 states/UTs now allow end-of-year settlement of unused solar energy at roughly the utility’s average power cost (APPC). In practice, surplus solar units generate bill credits (often carried forward up to 12 months) under each state’s net-metering rules.
(Note: There is no separate income-tax break for residential solar investment beyond the above subsidies.)
🇮🇳 National-Level Rooftop Solar Incentives for Residential Sector (2025)
| Key Point | Details |
|---|---|
| Subsidy Rates | ₹30,000 per kW for the first 2 kW, ₹18,000 for the 3rd kW, capped at a maximum total subsidy of ₹78,000 |
| Total Subsidy Cap | Maximum ₹78,000 subsidy applies for systems 3 kW and above |
| Payment Process | Subsidy is credited directly to the consumer’s bank account after installation and inspection |
| Net Metering | Available in 21+ states; check your state's SERC for detailed net metering rules and provisions |
| Tax Benefits | No separate income tax benefits beyond the listed capital subsidies |
State-level Schemes (Residential)
Several states run their own rooftop solar subsidy programs on top of the national CFA. Key examples include:
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Maharashtra: Under the PM Surya Ghar (Muft Bijli Yojana) in MSEDCL, residential consumers get ₹30,000/kW subsidy for the first 2 kW and ₹18,000/kW for the next 1 kW, capped at ₹78,000 total. In other words, a 3 kW system receives ₹78,000, and larger systems still get a maximum ₹78,000 subsidy. (Group Housing Societies get ₹18,000/kW up to 500 kW common load.) Official guidelines are available on the MSEDCL i-SMART portal.
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Delhi: The Delhi Solar Energy Policy 2023 offers a state capital subsidy of ₹2,000/kW (max ₹10,000) to residential rooftop owners. This small subsidy (credited via the first electricity bill) is in addition to the MNRE CFA. The Delhi policy also includes a generation-based incentive (GBI) of ₹3 per kWh for residential systems up to 3 kW, and ₹2/kWh for 3–10 kW systems, though the capital subsidy is fixed at ₹10,000 maximum. Details are on the Delhi Solar Portal.
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Tamil Nadu: The TN government’s solar rooftop scheme (Chief Minister’s Capital Incentive) provides ₹20,000 per kW capital subsidy for residential PV (up to specified capacity). For example, under the original CM announcement, a 1 kW domestic installation qualified for ₹20,000. (TN also provided a choice of a generation incentive, but many households opt for the subsidy). Applicants must use TEDA‐empanelled vendors. Official GO details the ₹20,000/kW subsidy and state budget allocation.
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Other States: As per industry analyses, states such as Assam, Goa, Gujarat, Jharkhand, Uttarakhand and Uttar Pradesh also offer capital subsidies for residential rooftop solar. (For example, Assam and Goa have schemes providing a percentage subsidy on system cost, while Gujarat’s recent energy policy targets 5 GW rooftop solar.) Exact subsidy rates and eligibility vary by state – consult the respective state nodal agency or state solar policy documents for details.
🏠 Residential Rooftop Solar Subsidies in Top Indian States (2025)
| State | Capital Subsidy | Generation-Based Incentive (GBI) | Notes & Source |
|---|---|---|---|
| Maharashtra | No separate state subsidy. GHS: ₹18,000/kW up to 500 kW (for common area load only) | None specified | MSEDCL i-SMART Portal |
| Delhi | ₹2,000/kW (max ₹10,000) credited via electricity bill | ₹3/kWh for ≤3 kW, ₹2/kWh for 3–10 kW | Delhi Solar Portal |
| Tamil Nadu | ₹20,000/kW under Chief Minister’s Capital Subsidy Scheme | Optional (available in some periods under TEDA) | TEDA Guidelines |
| Assam | ~40% of system cost (varies by system size/year); implemented by AEDA | Not specified | AEDA Official Site |
| Goa | % of system cost (varies annually; often 40–50% for smaller systems) | Not specified | GEDA Goa |
| Gujarat | ₹10,000–₹20,000/kW (historical); new rooftop policy aims for 5 GW by 2027 | Not specified | GEDA Gujarat |
| Jharkhand | ~40% of system cost via JREDA schemes | Not specified | JREDA Jharkhand |
| Uttarakhand | Top-up subsidy under UREDA programs | Not specified | UREDA |
| Uttar Pradesh | ₹15,000/kW with max ₹30,000 per residential rooftop installation | Not specified | UPNEDA |
Commercial Sector
National-level Incentives
For businesses and industries, the main central incentives are tax and policy related. Accelerated Depreciation (AD): Commercial and industrial firms installing rooftop solar can claim 40% depreciation on the asset value in the first year under IT Section 32. (This was trimmed from 80% to 40% in 2017, but remains a key benefit.) For example, a ₹1 crore solar installation can yield a ₹40 lakh depreciation deduction in Year 1, speeding up payback.
Net Metering: All states have net-metering or gross-metering rules that allow businesses to offset their power consumption by exporting surplus solar energy. As noted, 21 of 29 states provide year-end crediting (usually at APPC rates). In practice, most DISCOMs allow 1–3 year carryover of solar credits under C&I connections.
GST/ITC: Solar panels attract a concessional 5% GST. However, because electricity supply is GST-exempt, businesses generally cannot claim input tax credit on the solar plant cost. (This is a cost factor, not a subsidy.)
Note: No central CFA (capital subsidy) is offered to commercial/industrial consumers under the rooftop scheme – subsidies are currently limited to the residential component.
🏢 National-Level Rooftop Solar Incentives for Commercial/Industrial Sector (2025)
| Incentive Type | Details | Benefit Estimate | Eligibility/Conditions |
|---|---|---|---|
| Accelerated Depreciation | 40% per year (under Section 32 of Income Tax Act) for solar PV investments | Claim ~40% depreciation in year 1, reduces taxable income | Must own the asset and use it for business; claim under Income Tax return |
| Net/Gross Metering | Available in most states for C&I users (check state-specific policies) | Savings from exporting excess power | Capacity and metering caps vary by state; some allow gross metering for higher returns |
| No Central CFA | Commercial & industrial consumers are not eligible for MNRE CFA (subsidy) | 0 | Only residential consumers get direct subsidy under MNRE Phase II |
| GST Benefit | Solar components taxed at 13.8% composite rate (70% @5% for supply, 30% @18% for services) | Lower input tax credit | Businesses can claim ITC on full GST paid; improves ROI |
State-level Policies (C\&I)
Rather than direct cash subsidies, state support for commercial rooftop solar comes via favorable policies like net-metering, banking, and incentives. Notable state provisions include:
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Net-Metering Allowance: Nearly all major states permit large C&I rooftop systems. For example, Delhi, Maharashtra, Karnataka, Gujarat, and Rajasthan allow systems up to 1 MW (with 1-year rollover). Haryana and Uttar Pradesh permit up to 2 MW. Tamil Nadu allows residential/net-metering up to 1 MW (but typically uses gross metering for C\&I). In all these states, excess solar export is banked and credited (usually with 12-month settlement) for the customer.
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State Generation Incentives: Delhi’s 2023 policy includes a ₹1 per kWh GBI for commercial/industrial rooftop (for the first 200 MW of deployment), providing a revenue benefit on solar generation. (Residential GBI in Delhi is higher, as noted above.) Kerala also offers a small GBI for rooftop solar generation.
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Other State Supports: Several states waive transmission/wheeling charges or provide banking for C&I solar. For instance, many DISCOMs impose no additional fees for wheeling self-generated solar to other meters. State solar policies (e.g., in Gujarat, Punjab, Tamil Nadu) may allow banking up to a year. These policy incentives significantly improve the economics for businesses installing rooftop PV. For detailed state regulations (tariffs, wheeling charges, renewable purchase obligations, etc.), refer to the respective SERC or nodal agency websites.
In summary, commercial and industrial rooftop adopters benefit from a 40% accelerated depreciation tax incentive, broad net‐metering policies across all states, and in a few cases, state generation incentives (e.g. Delhi’s ₹1/kWh GBI). Combined with falling solar costs, these measures make rooftop systems financially attractive for businesses.
Sources: Official MNRE program guidelines, state DISCOM portals (MSEDCL, Delhi Solar Portal), government GOs, and recent reports. These cover the most current 2025 subsidies and incentives.
