The ever-growing pollution and the rate with which electricity tariffs are increasing are inspiring the masses to adopt the solar way of living. But getting inspired is one thing and taking action is different!
People in general do not understand how a solar system can save huge money. Hence, the upfront installation cost holds them back.
In order to tackle such issues, the Indian government is offering a solar panel subsidy to homeowners and housing societies to install rooftop solar systems.
The government’s most ambitious plan to make the masses adopt solar will be sealed at 4GW. It means that the solar panel subsidy will not last forever.
Once the country has enough residential rooftop systems generating 4 GW of solar electricity, the solar panel subsidy will not be provided any longer.
Want to learn more about the two types of subsidy programs running in the country and how you can apply for a subsidy?
If so, we have all the answers for you, you can click here to read more. Dive in and explore the ins and outs of solar panel subsidy like never before.
Types of subsidies offered to homeowners and housing societies
There are currently two subsidy programs running in the country – one is the state-run subsidy program and the other second is the newly launched DBT subsidy program.
DBT stands for Direct Bank Transfer. PM Narendra Modi launched a National Portal for Solar Rooftop on the 30th of July, 2022.
Let’s explore both these types in detail.
State-run Solar Panel Subsidy Program
This subsidy program is run at the state level and handled by the state discom (electricity supply company).
Every state receives a solar installation quota and the state government invites empanelled solar vendors (vendors that are registered with the discom) to place their bids and get the maximum allocation rights.
The vendor that successfully places the lowest bid gets the maximum allocation rights. That bid’s price becomes the L1 price and the solar panel subsidy is offered against those L1 prices.
Here’s the solar panel subsidy amount (in percentage) that most Indian states offer:
- 40% of L1 rates for solar systems that are up to 3 KW
- 20% of L1 rates when the solar systems are more than 3 KW and up to 10 KW
The above-mentioned subsidy amount is for homeowners. It’s capped at 10 KW.
Here’s the solar panel subsidy amount (in percentage) for housing societies:
- 20% of L1 rates for solar systems that are up to 500 KW
If the solar systems are being installed for commercial establishments, the government does not offer a solar panel subsidy.
In the state subsidy program, the customer gets an upfront subsidy. It means the customer pays the installation cost minus the subsidy amount to the vendor.
Once the solar system is installed and commissioned, the discom disburses the subsidy to the vendor.
DBT subsidy program
This is the latest addition to the arsenal of financial incentives that the government is offering. It’s quite different from the state-run program.
The National Portal for Solar Rooftop is a one-stop website where customers can apply for a subsidy on their own.
In the DBT program, the customer pays the entire installation amount (including the subsidy amount).
A subsidy can be claimed later on through the National Portal and is credited straight into the bank account of the customers within a month after the solar system is installed and commissioned.
The solar panel subsidy amount in the DBT scheme is fixed.
You might be wondering which of the two is better and how to apply for a subsidy. We have those sections covered as well.
Let’s start with the how to apply section first.
How to apply for a solar panel subsidy in the state-run program?
- Open the website of your state’s discom
- You will find a list of empanelled vendors
- Pick the vendor of your choice from the list
- Discuss project details with the vendor
- An officer from the state’s discom will visit your house to check technical feasibility and that all the dues have been cleared
- After the discom approves your application, you have to pay the installation amount to the vendor (minus the subsidy amount)
- Upon receiving the payment, the vendor will start the installation procedure
- Next comes the commissioning of the net meter
- Once the net meter will be installed and commissioned, the discom will disburse the subsidy directly to the vendor
How to apply for a solar panel subsidy in the National DBT Program?
- Go to the National Portal for Rooftop solar and download the Sandes app
- Register yourself on the National Portal and file an application for the installation of a rooftop solar system
- The discom (your state’s discom) will cross-check the application to verify the technical feasibility
- If the application passes, you will receive NOC from the discom
- Once you have the NOC, you can pick any empanelled vendor
- Always remember to discuss the project details with the vendor before making a payment
- Once you’re satisfied with the information, you have to sign an agreement with the vendor
- Make full payment to the vendor (including the subsidy)
- The vendor will commence the installation process
- 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
Which of the two is better – the state subsidy program or the DBT subsidy program?
That’s the biggest debate in the solar industry nowadays. People want to know which of the two is better. We have it covered for you.
We will walk you through the differences between both programs so that you can make an informed decision.
| State subsidy program | DBT subsidy program |
| Who gets the subsidy amount? The vendor gets the subsidy amount since the customer pays the vendor installation cost minus the subsidy amount | Who gets the subsidy? The customer gets the subsidy amount because the customer pays the vendor the entire installation cost including the subsidy amount |
| How much time does it take to receive the subsidy? The subsidy is disbursed to the vendor in about 3 to 6 months after the commissioning of the solar system | How much time does it take to receive the subsidy? The customer receives the subsidy amount in their bank accounts within 30 days after the commissioning of the solar system |
| Who can apply for the subsidy? Only those people who have an active subsidy program in their cities | Who can apply for the subsidy? Every Indian citizen, irrespective of the fact whether or not their state has an active subsidy program |
Needless to say, it’s the DBT scheme that’s better of the two – it’s simpler, takes less time, and reduces the funnel.
Conclusion:
Currently, two solar panel subsidy programs are running in India. One is at the state level and the other is the new DBT scheme.
The DBT scheme is the better of the two and eventually, the entire country might make a switch to the DBT program.
We hope that now you know everything about the solar panel subsidy schemes in India. Apply for it while you still can. You won’t get it after December 2024.
