Solar energy is taking the world towards the light – it’s probably the only way to protect the planet. Most importantly, electricity from solar energy is free. Considering its benefits, the government of India is offering a solar panel subsidy.
A solar subsidy is better understood as the financial assistance that the government offers to homeowners and housing societies installing rooftop solar systems. Earlier only the state-run subsidy program existed, but now a nationwide DBT (direct bank transfer) subsidy program has also been launched.
Both the solar panel subsidy in India 2022 programs, state-run as well as DBT (it was launched by PM Modi on July 30th 2022), are running parallel in the country.
If you have been meaning to install a solar system at your home or housing society and want to know everything about subsidies, this post will be a delightful read.
Dive in for all the information.
State-run solar panel subsidy program: An overview
Every state has a solar installation quota that it means to execute. In order to do so, the state government invites empanelled solar vendors to place their bids and earn the maximum allocation rights out of the state’s quota.
The vendor that bids the least gets the maximum allocation rights. The bid of the winning vendor becomes the discovered price (L1 price). The solar panel subsidy is offered against the discovered rates.
The amount of subsidy offered
- 1 KW to 3 KW solar systems: 40% of L1 rates (for homeowners)
- Above 3 KW up to 10 KW solar systems: 20% of L1 rates (for homeowners)
- Up to 500 KW: 20% of L1 rates (for housing societies)
How to apply for a solar panel subsidy in your state?
There’s a fixed procedure that has to be followed. We have simplified it and listed it in the pointers below. Have a look.
- Click open the website of your state’s discom.
- You will find a list of empanelled vendors
- Choose a vendor you trust the most
- Discuss all the installation details with the vendor
- An officer from the discom will visit your house
- The purpose of the visit is to ensure that all the technicalities for solar installation are being met
- After the clearance from the discom, you need to make full payment (minus the subsidy) to your vendor
- After receiving the payment, the vendor will begin the installation
- Post installation, the commissioning of the net meter will begin
- Once installed and commissioned, the solar system will start producing free solar electricity
- The discom will finally disburse the subsidy directly to the vendor
DBT solar panel subsidy program: An overview
DBT stands for direct bank transfer. It was launched on the 30th of July. PM Modi inaugurated the National Portal for Rooftop Solar where consumers can directly apply for the subsidy.
How to apply for a solar panel subsidy in the DBT program?
We have simplified the procedure for you. Have a look at the step-by-step pointers.
- Download the Sandes app from the National Portal for Rooftop Solar
- Register on the portal and submit the rooftop solar system installation application
- Your state’s Discom will check the application for technical feasibility
- You will receive NOC only after the approval of the discom
- After you receive the NOC, pick an empanelled vendor you trust
- Discuss details about the project with the vendor: such as, the size of the solar system to be installed, choosing Made-in-India solar modules from the ALMM list, and choosing a BIS-certified inverter
- Sign an agreement with the vendor and make the full payment
- Once the vendor will get the payment, the process of installation will begin
- After installation, a work completion report and the net meter installation request have to be submitted
- You will receive a commissioning certificate after the net meter is installed and commissioned
- Submit your bank account details and upload a copy of a canceled cheque through the National Portal for Rooftop Solar
- The details will be shared with the Fund Handling Agency
- The Fund Handling Agency will disburse the subsidy to your bank account
Keep in mind that you will receive the solar panel subsidy in your account within 30 days after the net meter is commissioned.
Major differences between the state-run and DBT solar panel subsidy Programs
This bonus section will clarify all your doubts.
| State-run solar panel subsidy program | National DBT solar panel subsidy program |
| Customer pays the installation cost minus the subsidy amount | Customer pays the full installation cost including the subsidy amount |
| Vendor gets the subsidy amount in 3 to 6 months after commissioning | Customer gets the subsidy amount within 1 month after commissioning |
| People with an active subsidy scheme in their cities can apply | No matter the state has an active subsidy program or not, everybody can apply |
Conditions to avail of a subsidy
- The solar panel should be an ALMM-approved DCR model
- Only on-grid solar systems are eligible
- Only rooftop solar systems are eligible
- Only homeowners and housing societies are eligible
- Commercial establishments do not qualify for a solar panel subsidy
For homeowners, the subsidy is capped at 10 KW. For housing societies, the subsidy is capped at 500 KW.
Conclusion:
The Indian government has a target of generating 4 GW of solar electricity from rooftop solar installations at homes and housing societies by the end of Dec. 2024. Post 4 GW, the solar panel subsidy will cease to exist.
So, if you want to take the benefit of a subsidy, this is the right time.