With electricity costs rising and increasing awareness of alternative energy sources, more and more Indians have shown interest in solar energy. But there are various reasons why people can adopt it and one such reason is government support. There are many ways in which you can reduce the cost of installing solar panels, like subsidies and tax rebates.
 

What Is a Solar Subsidy Anyway?

A solar subsidy means money that the government gives you to lower the initial cost of installing solar panels. It is pretty much straightforward. Lower the cost of solar energy so that it promotes the use of renewable energy.

In most instances, the money will be paid to you directly via bank transfer after inspection of the installation.
 

Government Initiatives on Solar Energy

The Indian government has launched many schemes to encourage solar energy.

1. PM Surya Ghar: Muft Bijli Yojana 

1. At present, it is the most important solar policy in India.
2. The subsidy available is ₹78,000 for rooftop solar panel installations.
3. Purpose: Domestic purpose
4. Try to provide free electricity up to 300 units per month.
5. Target: 1 crore houses in India
6. It has made it possible for middle-class people to avail of solar energy technology.

2. PM-KUSUM Scheme (For Farmers)

1. This scheme concentrates on the agricultural sector.
2. Installation of solar pumps is encouraged under this scheme
3. Makes farmers less reliant on diesel and electric pumpsets
4. Provides great financial assistance due to joint efforts of central & state governments
5. Especially beneficial for farmers in the long run.

3. Rooftop Solar Scheme (MNRE)

1. It is the pillar of India’s efforts for solarization.
2. Encourages people to install solar roofs in their homes
3. Also, goes hand in hand with state subsidy schemes
4. Can save you money on your electricity bill

Subsidies at State Level

Other than the central scheme subsidies, several states also provide additional incentives. This could be through offering additional subsidies, fast approvals, or improved net metering policies.

At times, the combined effect of the central and state government subsidies can cut down the cost of installation of solar panels up to 50 to 70 percent.

Taxes for Business

Whereas, the residential customers benefit directly with subsidization, businesses reap the rewards via taxes.

1. Accelerated Depreciation

Under the Income Tax Act, accelerated depreciation up to 40 percent is available to businesses.

This decreases the amount of taxable income.

2. Lower GST Rates

Solar systems are exempt from GST, which cuts down their cost.

3. Reduced Bills

Other than reduced tax outgo, there will be savings from reduced bills.

Who Is Eligible To Apply?

Different systems have different target customers:

1. For homeowners: Rooftop subsidy system
2. For farmers: Solar water pumping system
3. For business owners: Tax benefit

It is very important that applications should be made only via the government website and after gaining approval, then installing systems. If not, one might not qualify for the subsidy.

How Much Can Be Saved?

Here are the rough amounts of savings that can be obtained from each system:

1. Up to ₹78,000 subsidy for home installation
2. Other state subsidies in certain places
3. 40 percent in tax savings for companies
4. Substantial decrease in electricity bills
5. In most cases, the system would pay off in 3 to 5 years.

Solar energy is more economical now due to the backing of the government in India. No matter whether you are an individual or a company that wants to save money, you will benefit greatly from these programs.

When thinking about solar energy, don’t think of the high upfront cost but rather the investment you will make. Planning well with the aid of government facilities can turn out to be a profitable move.