Government Solar Subsidies & Incentives in India: What’s Real, What’s Not (2026)

If you’re hearing “100% subsidy”, “free solar”, or “government-approved discount today”, pause. India does have genuine rooftop solar support—but it’s specific, rule-based, and almost always paid after installation, not as cash in hand.

Solar subsidy is real—but “100% free” and “instant cash” claims aren’t. Know the difference before you buy.

This guide breaks down what’s real (and how it actually works), what’s not, and how to protect yourself from subsidy-related mis-selling.

The one “main” subsidy most homeowners can actually get

1) PM Surya Ghar (Muft Bijli Yojana) — the real rooftop solar subsidy

For most Indian homes, the legitimate central support is the Central Financial Assistance (CFA) under PM Surya Ghar: Muft Bijli Yojana, meant for residential, grid-connected rooftop solar.

2) How much subsidy is “real” right now?

In practical terms, the widely used CFA amounts work out to:

• ₹30,000 per kW for the first 2 kW
• ₹18,000 per kW for the next 1 kW (up to 3 kW total)
• No extra central subsidy beyond 3 kW

That’s why people quote:

• 1 kW → ₹30,000
• 2 kW → ₹60,000
• 3 kW (and above) → ₹78,000 max

3) Who is eligible (and who usually isn’t)?

Eligible (generally):

• Residential electricity connection
• Grid-connected rooftop solar
• Installed through the proper process/portal and DISCOM verification

Not eligible for central CFA:

• Commercial/industrial connections
• Most “off-grid only” systems
• Systems that don’t meet scheme conditions (more on that below)

4) Important condition many people miss: DCR requirement

For CFA eligibility, the scheme guidelines include a Domestic Content Requirement (DCR)—modules must be domestically manufactured (and from domestically manufactured cells). If the system uses non-DCR modules, it can become ineligible for CFA.

Plain-English takeaway: if someone offers a “cheaper imported panel package + full subsidy”, you should be suspicious.

The real process: how you actually receive the subsidy

The subsidy is typically DBT after commissioning

In the simplified process, the DISCOM inspects/commissions, and then the beneficiary submits bank details (often including a cancelled cheque) on the portal. The CFA is credited to the beneficiary bank account (or sometimes the linked loan account) after successful verification.

What the journey usually looks like

1. Apply on the official portal / DISCOM mechanism
2. DISCOM technical feasibility / approval (rules vary by state; many workflows are now faster for small systems)
3. Choose an empanelled vendor (as required in your DISCOM/portal process)
4. Installation + net meter / metering agreement as per state rules
5. DISCOM inspection + commissioning certificate
6. Submit bank details on portal and claim CFA
7. CFA credited to your account (timeline depends on approvals and completeness of documents)

“Rooftop only” doesn’t always mean only on the roof

MNRE clarified that ground-mounted elevated installations (meeting technical specifications) are explicitly allowed—helpful for homes where roofs aren’t suitable.

What’s NOT real: the most common myths and scams

Myth vs Reality (quick table)

Claim you’ll hear	Reality
“100% subsidy / free solar for everyone”	Central CFA is capped (commonly max ₹78,000) and applies to eligible residential setups only.
“Subsidy is instant discount today”	Legit CFA is tied to DISCOM commissioning + portal claim; many cases get credited after verification.
“Battery also gets subsidy”	Extra components can be part of the system, but CFA calculation is based on solar module capacity rules—not “battery subsidy”.
“Any vendor can get you subsidy”	The process is routed via official portal/DISCOM workflows; vendor and documentation matter.
“You’ll get subsidy on 5 kW / 10 kW fully”	Central CFA typically doesn’t increase beyond 3 kW (cap applies).

Red flags (walk away if you see these)

• “Pay ₹5,000 to ‘unlock’ subsidy”
• “Cashback in cash / we’ll transfer subsidy from our account”
• No mention of DISCOM inspection, commissioning certificate, or portal claim
• No written commitment on bill of materials (modules/inverter) and warranties
• “Imported panels but full subsidy guaranteed” (watch the DCR condition)

Real incentives that aren’t called “subsidy” (but save you money)

1) Net metering / net billing savings

Your biggest long-term benefit is often not the CFA — it’s the monthly bill reduction from self-consumption and the export adjustment (as per your state’s regulation and DISCOM process). The exact rules differ by state, and your metering arrangement could be net metering, gross metering, net billing, virtual net metering, etc.

2) State top-ups and DISCOM-run schemes

Some states/DISCOMs add extra support on top of the central CFA (or run special tenders for specific categories). For example, Maharashtra DISCOM initiatives have been reported for targeted consumer categories, showing how “extra support” often comes via state/DISCOM programs, not random installers.

Also, MNRE guidelines allow States/UTs to provide additional subsidy on top of central CFA, but typically routed through the official framework.

3) GST changes can affect your final price (but it’s not “subsidy”)

GST can materially change the invoice amount. Recent reporting indicates a reduction of GST on renewable energy components from 12% to 5% effective Sept 2025, which can lower costs—though how it applies may depend on contract structure and what’s being billed (goods vs services).

For businesses: incentives exist, but they’re different

Homeowners often ask for “subsidy for my shop/factory”. Central CFA is mainly residential-focused; businesses usually benefit through:

1) Accelerated Depreciation (AD)

Businesses can claim depreciation benefits on solar assets under income-tax provisions (commonly referenced as 40% depreciation under Section 32 frameworks in many explainers), which improves effective payback for taxable entities.

2) Input Tax Credit (ITC) (where applicable)

For eligible businesses, ITC on GST paid can be relevant (subject to tax rules and invoicing). Always verify with your CA.

10-point checklist to verify if an offer is genuine

1. Is your connection residential (not commercial) and eligible?
2. Is it grid-connected with DISCOM metering process?
3. Are they clear that subsidy is credited after commissioning, not instant cash?
4. Are modules compliant with scheme requirements (including DCR where applicable)?
5. Written BOM: module brand/model, inverter make, protections, earthing/lightning, structure details
6. Clear warranty terms (module performance warranty + product warranty; inverter warranty)
7. Net meter responsibility stated (who applies, who pays, timeline)
8. Portal steps explained (application → feasibility → commissioning → claim)
9. No “processing fee” promises to speed approvals
10. Payment schedule linked to milestones (not 100% upfront)

FAQs

• Does “3 kW and above” mean I should install 5 kW?
  Not automatically. The subsidy cap doesn’t increase beyond the defined limit, so you size the plant based on usage, roof space, sanctioned load, and your DISCOM’s rules.
• Is there subsidy for batteries?
  Battery backup is popular, but don’t assume “battery subsidy.” Scheme rules focus CFA calculation around solar module capacity structure; verify the latest conditions before buying add-ons.
• My roof is shaded—does that mean no subsidy?
  Not always. Elevated ground-mounted setups are clarified as allowed if they meet technical specs and are approved in the process