How Much Government Subsidy Is Available for Solar Panels?

The short answer: for eligible residential consumers, Central Financial Assistance under PM Surya Ghar: Muft Bijli Yojana runs up to ₹30,000 for a 1 kW system, up to ₹60,000 for 2 kW, and up to ₹78,000 for 3 kW and above. For commercial and industrial installations, this residential scheme does not apply at all.

The residential position

Assistance is credited to the eligible consumer after installation, inspection and net-meter connection, following the scheme's process. Eligibility depends on having a residential electricity connection, a suitable rooftop, installation through a registered vendor, and compliance with the requirements in force at the time of application.

The ₹78,000 figure is a ceiling. It does not increase with capacity beyond 3 kW.

The commercial and industrial position

This is where a lot of website copy becomes misleading. Businesses, factories, warehouses and commercial buildings are not eligible for the residential subsidy. What may apply instead varies:

• Depreciation benefits. Businesses may be able to claim depreciation on solar assets under the Income Tax Act. The applicable rate and conditions change over time — confirm the current position with your own tax advisor.
• State-level policies. Some states operate their own incentives, banking provisions or open-access arrangements for commercial and industrial consumers.
• Metering arrangements. Net metering, net billing and gross metering differ by state and can materially affect project economics — sometimes more than any incentive.

In practice, most commercial and industrial solar projects in India are justified on energy cost reduction over the system's life rather than on a subsidy.

Institutions, trusts and societies

Eligibility for schools, hospitals, trusts and housing societies depends on the nature of the electricity connection and the specific scheme provisions in force. Group housing societies and residential welfare associations have been addressed separately under the scheme for common-area installations — check the current provisions, as these have evolved.

How to verify anything you are told

Subsidy claims are the most common place where solar marketing overreaches. Two checks protect you:

1. Confirm the current structure and rules on the official government portal, not on an installer's website.
2. Be sceptical of any guarantee of approval. Approval is a government and DISCOM decision. An installer can guide you through the process; they cannot promise the outcome.