Solar energy has become one of the eco-friendly and sustainable options in recent years. It serves as an excellent alternative to conventional energy resources as a country like India faces numerous challenges with climatic changes. Hence, to boost solar rooftop installation, the Government of India provides incentives for such an eco-friendly alternative for their homes and business spaces. Therefore, this blog explores the overview of solar subsidies and the solar subsidies introduced in India in 2023.
Understanding Solar Subsidy:
A solar subsidy is an excellent option for many building owners who wish to choose a conventional energy resource. So, solar subsidy is an incentive program offered by the Government of India to increase the usage of solar power systems. Hence, this program allows many industries, individuals, or businesses to access and afford one for themselves. This initiative aims to alleviate the financial challenges associated with installing solar panels by offering financial assistance to consumers.
Solar Subsidy In India – 2023:
India has implemented a solar subsidy program to encourage the adoption of solar energy among residential consumers.
This incentive allows residential users to reduce up to 40% of their installation expenses. Furthermore, individuals from various regions of the country can apply for these grants. However, the specifics regarding the incentive amount and the procedure for individuals to claim it may require further exploration. Let’s explore some of the standard details.
Central Financial Assistance:
The Indian Government, in late 2022, took the initiative on Rooftop Solar Programme Phase II. The program is a part of the Ministry of New and Renewable Energy (MNRE), where Central Financial Assistance (CFA) is extended to residential homeowners who install rooftop solar systems (RTS).
The execution of the program will be carried out by DISCOMs (Distribution Companies) and the relevant state agencies. The Central Financial Assistance notably introduces a noteworthy feature – direct benefit transfer (DBT). Consumers will receive the incentive directly credited to their bank accounts, adding a streamlined and efficient dimension to the subsidy disbursement process.
Who Is Eligible For CFA?
At present, the CFA is accessible to residential consumers who have a grid-connected solar plant. Group housing societies and Resident Welfare Associations (RWAs) with solar capacities of up to 500kW are also eligible for this incentive. However, there are specific criteria established by MNRE to avail subsidy.
CFA or subsidy benefits apply exclusively to projects fully executed through the National Portal, having undergone the requisite processes for technical feasibility approval and installation of the Rooftop Solar (RTS) plant by a registered vendor or solar dealers in Chennai and other places adhering to the provisions stipulated in the National Portal.
Determining the plant capacity eligible for CFA or subsidy will involve considering the capacity already installed at the site. Applications registered in the National Portal must be submitted by the respective consumer or beneficiary, and submissions made by vendors are subject to rejection.
Solar Subsidy Cost In India:
The implementation of the CFA has streamlined subsidy calculations significantly. Additionally, the incentive amount remains uniform for consumers across all states, excluding the northeastern states and specific union territories.
- 3 kW solar energy systems or less can avail subsidy of up to ₹14,588 per kilowatt.
- 3 kW to 10 kW solar energy system, ₹14,588 per kilowatt can be availed for initial watts and ₹7,294 per kilowatt for the remaining capacity.
- For more than 10 kW solar energy systems, a subsidy of ₹94,822 will be provided.
- For Resident Welfare Associations/Group Housing Societies (RWA/GHS), a subsidy of ₹7,294 per kilowatt is available for everyday essentials, from 500 kWp to 10 kWp per house.
The calculation of the CFA relies on the lower of either the module capacity or the inverter capacity. Furthermore, specific states in India, including Jammu and Kerala, offer an additional solar subsidy at the state level, supplementing the CFA to encourage the uptake of clean energy.
Solar subsidies catalyze the widespread adoption of solar energy, offering homeowners in India a unique opportunity to contribute to economic and environmental sustainability. As Governments continue prioritizing renewable energy initiatives, solar subsidies become increasingly vital in making clean and green power a reality for households nationwide. Embracing solar energy through subsidies through Buhin Solars for solar panel installation In Chennai transforms the energy landscape at the individual level and propels India toward a brighter and more sustainable future.