Are you planning to install solar panels at home and want the government to pay for it? If yes, then you need to know about the Solar Subsidy in India.
Under the PM Solar Yojana (also known as Muft Bijli Yojana), the government provides financial assistance to homeowners for installing solar systems.
But why does the government offer solar subsidies? How much subsidy is available? Who is eligible? And how can you apply for it? In this article, we will answer all these questions in detail.
Page Contents
What Does Solar Subsidy Mean?
India generates a significant portion of its electricity from coal-based power plants. This electricity is supplied to homes, industries, and factories. The government earns more revenue by supplying power to industries than to residential homes.
By promoting solar power for homes, the government ensures that homeowners generate their own electricity. This allows the government to redirect more power to industries, boosting national revenue. To encourage homeowners to install solar systems, the government provides solar subsidies, making the transition to renewable energy more affordable.
Who is Eligible for Solar Subsidy in India?
Not every solar project qualifies for a subsidy. Here’s how eligibility is determined:
Residential or Commercial Solar Projects?
Only Residential Solar Systems Get Subsidy, Commercial buildings like offices, schools, hospitals, factories, and showrooms are NOT eligible for subsidy.
Even in the residential projects, there are 2 categories:
- Individual Households – One that has its own home and roof. And they want to install solar to fulfill their energy requirements. If this is you then you will get the subsidy.
- Residents Welfare Association/Group Housing Societies – Then there are those people who live in buildings(in flats), which are called group housing societies. In these flats, people do not get a personal roof but instead a common roof. And in a common roof, you cannot install a personal solar setup.
However, there are still subsidy options for such people but only on common facilities that are shared by every house in the society like lifts, lights in common areas, water pumps, EV charging station, etc. You can install solar setup on a common roof for all these common facilities where electricity is required and avail subsidy on it.
On-grid Solar, Off-grid Solar or Hybrid Solar?
There are three types of solar systems:
- Off-Grid Solar System: Uses solar panels, an inverter, and a battery. No connection to the electricity grid. ❌ No Subsidy.
- On-Grid Solar System: Uses solar panels and an inverter but no battery. Excess electricity is sent to the grid. ✅ Eligible for Subsidy.
- Hybrid Solar System: Uses solar panels, an inverter, a battery, and a grid connection. ✅ Eligible for Subsidy.
PM Solar Yojana 2025: How Much Solar Subsidy Can You Get?
The current solar subsidy scheme for 2025 is called PM Surya Ghar Muft Bijli Yojana. Here’s how much subsidy you can get:
- 1 kW solar system – ₹30,000 subsidy
- 2 kW solar system – ₹60,000 subsidy
- 3 kW or more solar system – ₹78,000 subsidy
| Solar Setup | Subsidy Amount |
|---|---|
| 1 KW | Rs 30000 |
| 2KW | Rs 60000 |
| 3KW | Rs 78000 |
| Above 3KW | Fixed Rs 78000 |
💡 Important Notes:
- The subsidy is only available to homeowners who own a self-occupied house with a dedicated rooftop.
- Tenants or apartment owners in low rise builder floors must convince all residents to install a common solar system. Each household will receive an individual subsidy based on their installed capacity.
Below is a circular posted by the Ministry of New and Renewable Energy on the 12th of Aug 2024.
Solar Subsidy for RWA/Group Housing Societies
The rules are different for RWA/GHS where you don’t have your personal roof. So you cannot install solar for your personal needs.
In such societies, you can install solar setups for common facilities like lifts, water pumps, and lights in common areas, EV charging Station, etc.
The solar subsidy for such societies are Rs 18000 per KW till a maximum of 500 KW solar setup. Beyond that, you won’t get any subsidy.
If your building roof is not spacious enough and you are limited to a setup of 100 KW then you will get the subsidy of Rs 18000*100 = Rs 1800000.
The maximum you will get a subsidy of 500 KW if you use all space on your roof, which will be Rs 18000*500 = Rs 9000000.
Below is the table to understand it properly.
| Solar Setup | Subsidy Amount |
|---|---|
| 100KW | Rs 18,00,000 |
| 200KW | Rs 36,00,000 |
| 300KW | Rs 54,00,000 |
| 400KW | Rs 72,00,000 |
| 500KW | Rs 90,00,000 |
| Above 500KW | Fixed Rs 90,00,000 |
You can install a solar setup depending on your requirement, sanction load and the shadow-free area.
Special States with Additional Solar Subsidy
The Indian government provides extra benefits for certain states categorized as Special States due to their geographic or economic conditions. Homeowners in these states receive an additional 10% subsidy on top of the existing PM Solar Yojana subsidy.
The states and regions eligible for this extra subsidy are:
- Northeastern States – Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura.
- Hilly States & Union Territories – Jammu & Kashmir, Ladakh, Himachal Pradesh, Uttarakhand.
- Island Territories – Andaman & Nicobar Islands, Lakshadweep.
For residents in these states, the final subsidy amount will be 10% higher than the standard PM Solar Yojana subsidy.
Additional Solar Subsidy by State Governments
Apart from the central government subsidy, some states offer additional benefits. Here are some examples:
- Uttar Pradesh – ₹30,000 extra subsidy on top of the ₹78,000 central subsidy.
- Haryana – Additional subsidy under the Antyodaya Scheme for low-income families.
To check if your state offers extra subsidies, consult your local solar vendor or electricity department. The government has a National Solar Portal where you can find approved vendors in your area. Visit pmsuryaghar.gov.in.
Solar Subsidy Application Process in India 2025
The government of India launched a dedicated portal for rooftop solar called the PM Surya Ghar: Muft Bijli Yojana. This portal was launched on 30 July 2022.
To apply for the PM Solar Yojana, follow these steps:
- Visit the National Solar Portal and register with all the following documents (e.g.- state, electricity consumer no, mobile, email, etc.)
- Once your registration is done, you can log in through your Electricity consumer number and mobile number.
- Then you have to apply from the solar rooftop portal for the process and wait for the feasibility approval from your DISCOM. Feasibility approval means you are eligible to install solar panels.
- After that, you can contact a registered vendor from this same portal to begin the process of installation. You can get the details of nearby registered vendors on this portal only. You can connect with them and ask everything about the process, installation cost, and other information, etc. You can choose any vendor as per your comfort. The finalized vendor cannot be changed later on hence it has to be chosen wisely. If you wish to change the vendor later then you have to cancel the whole application and start from scratch.
- The vendor will approve your request and sign an installation agreement.
- Upload the installation agreement to this portal and wait for approval from your DISCOM.
- Post approval, get the sola rinstalled.
- After installation, the local electricity department will inspect and approve your system.
- Then apply for net meter from this same portal. This allows your excess solar power to be sent to the electricity grid, reducing your electricity bill.
- Once the net meter is installed, DISCOM will visit for inspection, and based on it, they will generate a commissioning certificate from the portal.
- Once you get the commissioning certificate, you will have to submit your bank details and a cancelled cheque through this portal.
- The subsidy amount will be given to the beneficiary account. You will get the subsidy amount in your bank account within 30 days.
Why Does The Government Provide Solar Subsidy?
Earlier, India set a goal of installing 40 gigawatts of solar panels on residential structures by 2021, but just 5 gigawatts have been installed so far. Now, The Indian government has set a goal of installing 280GW of solar panels by 2030, which means that 10GW should be installed per year.
The government has launched new initiatives to encourage the installation of solar panels at residences, such as allowing any client to have solar panels installed by any solar dealer, distributor, or company, and then sending a photo of the installation to the local electricity board.
Benefits of Installing a Solar System Under PM Solar Yojana
- Huge Savings on Electricity Bills – Reduce your bill by up to 90%.
- Government-Backed Subsidy – Financial support to make solar installation affordable.
- Low Maintenance & High Durability – Solar panels last 25+ years with minimal upkeep.
- Environment-Friendly – Reduce carbon footprint and contribute to a cleaner planet.
- Increased Property Value – Homes with solar systems have higher resale value.
Final Thoughts – Should You Apply for Solar Subsidy?
Without a subsidy, the typical cost of installing a 1KW grid-connected rooftop PV system in 2025 should be around Rs 50,000.
If you are a homeowner and want to reduce your electricity costs while contributing to green energy, then applying for PM Solar Yojana is a smart decision.
With ₹78,000 subsidy, low-maintenance solar solutions, and direct bank transfers, the government has made it easy for households to switch to solar.
💡 Interested in Installing Solar? Visit pmsuryaghar.gov.in and find an approved solar vendor near you today!
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