Benefits, Procedure And Eligibility For Solar Panel Subsidy: A Detailed Guide

Solar Panel

Everybody says installing a rooftop solar system is slightly expensive, and it sure is – but then, there’s solar panel subsidy too! Yes, the procedure can be a bit overwhelming to understand, but given the state of mounting electricity tariffs, exploring the ABC of solar subsidy is worth the time and the money.

Subsidy on a rooftop solar system for homeowners is the government’s initiative to achieve its target of generating 4 GW of solar electricity from residential installations by the end of December 2024.

A solar panel subsidy, better understood as a subsidy on a solar system, has certain elements that one should be well aware of when planning to install a rooftop solar system.

Care to engage in a delightful, insightful post that’ll explain solar panel subsidy like never before? Look no further. Dive in and you’ll have all the answers.

Eligibility for Solar Panel Subsidy in India

A subsidy is financial assistance that the government offers to homeowners willing to install a rooftop solar system. However, there are certain conditions that make a customer eligible to apply for a subsidy in the first place.

  • Type of Module: Indian government offers a subsidy on ALMM-approved and Made-in-India (DCR) solar panels. Since polycrystalline panels are currently the only type of modules that are made within the country, a customer will get a subsidy only upon the installation of polycrystalline solar panels.
  • The type of system: Residential rooftop solar subsidy is offered for an on-grid solar system.
  • The sector: Subsidy for rooftop installations is provided for individual homes and housing societies only. Commercial entities including, but not limited to, shops, offices, hotels, and industries are not eligible to apply for a subsidy.
  • The system’s capacity: For residential rooftop installations, the subsidy is capped at 10 KW. It means that for residential customers, 10 KW is the upper limit for subsidy. If you install an 11 KW solar system (or more) at home, you will get the subsidy limited to 10 KW only. Small cooperative housing societies (CHS) get a 20% subsidy on L1 prices for up to 500 KW.

Benefits of solar panel subsidy in India

Subsidy on solar panels (system) is a significant step that the government has taken toward promoting sustainable living.

The most important advantages/benefits of offering solar panel subsidy are as follows:

  1. Electricity bills seriously dent the pockets. They’ve been on a constant rise. In fact, every year, the electricity rates increase by about 5% to 6%. Solar energy is a boon in such cases. Still, despite its long-term benefits, many homeowners hold back from installing a solar system since the installation of a rooftop solar system is expensive. Here, subsidy comes in very handy. Solar panel subsidy is a praiseworthy effort to make solar systems affordable.
  2. The cost breaks even quicker when homeowners get to avail of a subsidy. It popularizes solar energy more and more.

Once the milestone solar power generation of 4 GW will be hit, the government will no longer run the subsidy programme. Now is the best time to install a solar system when financial assistance is being offered.

Procedure to apply for solar panel subsidy in India

There are two ways to apply for a subsidy on rooftop solar system installation: State-run subsidy programmes and the simplified National rooftop solar subsidy programme. Let us explain the procedure to avail of a subsidy in both cases.

State-wise subsidy programme

As the name suggests, this subsidy is run by the state’s discom. Here’s the simplified procedure.

  • Visit your state’s discom website.
  • Find out the list of empanelled vendors.
  • Pick the vendor of your choice.
  • Discuss details with the vendor.
  • An officer from the state’s discom will visit your house, and ensure that all the dues have been cleared and that there’s adequate space for the installation.
  • After the clearance, your solar vendor will start the process of installation.
  • You pay the money to the vendor for the system minus the subsidy amount.
  • Upon installation, the commissioning of the net meter will begin.
  • Once installed and commissioned, your solar system will become operational.
  • The discom will disburse the subsidy directly to the vendor.

National Solar Subsidy Programme

This is a very recent initiative by the government to simplify the process of applying for a solar panel subsidy.

A National solar portal was launched by PM Narendra Modi on the 30th of July, 2022.

The national subsidy program is also known as DBT (Direct bank transfer). Here’s a step-by-step illustration of applying for a subsidy through the National Solar Portal

  • Visit the National Solar Portal
  • Download the Sandes App
  • Register on the National Portal
  • Submit the application to install Solar Rooftop System
  • The Discom will check the application for technical feasibility. If the application gets approved, you’ll get an NOC
  • Choose an empanelled vendor
  • Discuss necessary details with the vendor: such as, the size of the solar system to be installed, choosing Made-in-India solar modules from the ALMM list, choosing a BIS-certified inverter, and signing an agreement with the vendor
  • Make the payment to the vendor
  • After receiving the full payment, the vendor will install the solar plant
  • Submit the Work Completion Report and Net Meter installation request. Your vendor will help you
  • Once the net meter is installed and commissioned, a commissioning certificate will be generated
  • You will have to submit your bank account details and upload a copy of a canceled cheque online through the National Portal itself. Again, your vendor will help you
  • The details will be transferred to the Fund Handling Agency
  • The Fund Handling Agency will disburse the subsidy and you’ll get the amount credited straight to your bank account within 30 days of the commissioning of the net meter

The one thing that makes the DBT subsidy scheme special is that it is valid even for homeowners who do not have active subsidy programmes in their states yet.

If you choose to install an on-grid rooftop solar system with polycrystalline solar panels, no matter the state, you can apply for a subsidy.

For further simplification, the government has released a KW-wise subsidy rate card.

Here’s the rate card:

State Nodal Agency/ Discom Subsidy per kW under national & simplified programme Type of subsidy
Category A

1-3 kW

Category B

3-10 kW

Category C

>10 kW

0 Rs. for Homes

Every state & UT of India Respective DISCOM 14,588 Rs/ kW Rs. 14588/- per kW for the first 3 kW and thereafter Rs. 7294/- per kW Rs. 94822/- total fixed on the entire system The subsidy will be directly credited to the consumer’s bank account


Solar panel subsidy is the financial help that the government offers homeowners so that the installation can be made more affordable. If you install an on-grid solar system with polycrystalline solar panels, you will receive a subsidy of up to 10 KW.

Since the subsidy will be offered till the government reaches the target of generating 4 GW of solar power from the residential sector, it’s the best time to install a solar system and take advantage of the financial help that is being provided.