The Solar Revolution in India: Key Policies & Incentives You Should Know

India is undergoing a solar revolution, driven by ambitious government targets, favorable policies, and increasing demand for clean, sustainable energy. For homeowners, businesses, and industrial users, understanding the various incentives and policies available is crucial to making informed decisions about solar adoption. Here’s a detailed guide to the key policies and benefits currently shaping India’s solar landscape.

1. National Solar Mission

Launched in 2010, the Jawaharlal Nehru National Solar Mission (JNNSM) is India’s flagship program to promote solar energy. Its primary goal is to make solar power affordable, scalable, and sustainable across the country. Under this mission, India has set a target of achieving 280 GW of installed solar capacity by 2030.

2. Net Metering Policy

One of the most impactful policies for solar adopters is net metering. This arrangement allows consumers to feed excess solar power back into the grid and receive credits on their electricity bill. It reduces dependency on grid power and accelerates the payback period of solar investments.

Key Highlights:

• Available for residential, commercial, and industrial consumers

• System capacity typically ranges from 1 kW to 1 MW (varies by state)

• Monthly or annual credit settlement, depending on state regulations

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3. Accelerated Depreciation (AD) Benefits

For businesses and industries, the government offers accelerated depreciation on solar assets. This allows solar adopters to depreciate up to 40% of the cost of the solar system per year under the Income Tax Act.

Benefits:

• Reduces taxable income

• Improves return on investment (ROI)

• Encourages businesses to invest in clean energy

  
  

4. Capital Subsidy Schemes

Under various central and state-level schemes, residential and institutional consumers can avail capital subsidies to lower the upfront cost of solar installations.

Current Central Subsidy (as of 2025):

• Up to 40% subsidy for residential rooftop systems up to 3 kW

• 20% subsidy for systems between 3 kW and 10 kW

State Subsidies: Many states offer additional subsidies on top of central government incentives, further reducing installation costs.

5. Production Linked Incentive (PLI) Scheme

To promote domestic solar manufacturing, the Indian government has introduced the PLI Scheme for high-efficiency solar PV modules. This scheme aims to reduce dependency on imports and support local manufacturing capacity.

Impact for Consumers:

• Expected to reduce solar panel costs in the long term

• Supports self-reliance in solar infrastructure

  
  

6. Renewable Energy Service Companies (RESCO) Model

Under the RESCO model, solar projects are installed, owned, and operated by a third party. Consumers only pay for the electricity generated, without any capital investment.

Ideal For:

• Businesses without upfront capital

• Institutions and commercial buildings

  
  

7. Green Energy Open Access Rules

Introduced in 2022, these rules allow consumers with a load of 100 kW or more to procure renewable energy directly from the grid without facing high open access charges. This makes it easier for industrial and commercial units to adopt solar energy.

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Conclusion

India’s solar revolution is being powered not just by technological advancements but also by a strong policy framework and financial incentives. Whether you’re a homeowner, a small business, or a large industrial entity, these government initiatives make solar adoption more affordable and attractive.

By understanding and leveraging these policies, you can reduce your energy costs, improve your sustainability profile, and contribute to India’s clean energy goals.