Solar Photovoltaic (PV) Subsidy/Capital Support in India [2021]

India is one of the leading countries in the world in terms of solar panel installations. What brings about this sudden push for solar? One aspect has been the demand for a greener and cleaner solution for producing electricity. The other aspect has been the rising costs of coal and petroleum; and the rise in cost of regular electricity from Government Bodies or Private Companies. A substantial drop in the initial setup costs of installing a solar system or a plant has also created a sense of optimism among people to march to the advancement of clean energy.

The result is that Solar panels have come with leaps and bounds in the past decade. Today, there has been a paradigm shift in which each one of us contributes our bit to the preservation of the environment in which we live.

What is a solar subsidy from Central Government?

Our government in India has made various initiatives to boost the use of solar panels and bring India one step closer to its solar target installation. To make this project more effective, the government has launched Central financial assistance (CFA) that provides financial assistance for the installation of solar panels. This subsidy motivates people to invest and allows beneficiaries to save between 40%-50% on installation costs. These grants can be requested by a solar consumer who wants to install solar panels in their home or commercial establishment.

It is important to note here that:

- This subsidy is exclusively available for grid-connected solar rooftop projects in the residential sector (Individual Homes & Big Apartments).
- The subsidy is only available on Grid Connected Solar System (Without Battery System).
- CFA is NOT available in commercial and industrial sectors, such as government, institutional, social, commercial, and industrial as they are eligible for other benefits like accelerated depreciation, tax holidays, and excise duty exemptions.

How much is the subsidy?

Central Financial Assistance (CFA) to Residential Sector

For states such as Himachal Pradesh, Jammu & Kashmir, Uttarakhand, Sikkim, and Lakshadweep, subsidy of up to 70% is given by the Central government.

How to avail of the subsidy?

Customers who want to take advantage of the incentives must contact their local Electricity Distribution Companies (DISCOMs), as the government initiative will be administered through the state (DISCOMs). You can apply for solar panel installation both online and offline, or contact the appropriate electricity distribution company.

Solar Panel Subsidy in Indian States

With the growing number of solar panel installations in India, here are some key elements to keep in mind about the subsidy system in various states, as well as some important data. Here are some specifics on the state’s subsidy :

Subsidy for Solar Panels in Uttar Pradesh, 2021

In India, Uttar Pradesh has the seventh-largest installed rooftop solar power producing capacity. Uttar Pradesh plans to build solar parks on public land in various sections of the state. In order to promote rooftop solar energy production for residential installations, the state government has announced a subsidy under the UP Rooftop Solar Panel Subsidy Scheme 2021.