MNRE Clarifies Residential Rooftop Solar Subsidy Applicability

The benchmark cost for the rooftop solar system, up to 10 kW is ₹54/W for 2019-20


The Ministry of New and Renewable Energy (MNRE) has issued a clarification regarding the subsidy applicable for rooftop solar installations by individual residential households under phase-II of grid-connected rooftop solar program.

In its official memorandum, the MNRE states that subsidy under Phase-II of the grid-connected rooftop solar program will be available to all eligible households for installation of rooftop solar as per regulations of respective State Electricity Regulatory Commission (SERC) and provisions of program implementation guidelines.

According to the MNRE statement, rooftop solar installations up to 3 kW will qualify for a subsidy of 40%. For rooftop solar installations above 3 kW, and up to 10kW will get a subsidy of 40% for the first 3 kW and 20% for the remaining capacity, and for installations above 10 kW, it is 40% for the first 3kW and 20% for the remaining 7 kW. However, there’s no subsidy beyond 10 kW capacity.

According to the MNRE benchmark cost for the rooftop solar system, up to 10 kW is ₹54 (~$0.75)/W for 2019-20. Considering the cost calculated through tenders is ₹50 (~$70)/W, the subsidy would be calculated on ₹50 (~$70)/W being lower than the benchmark cost.

In July 2019, MNRE notified new benchmark costs for grid-connected rooftop solar power projects for the financial year (FY) 2019-20. For projects with a capacity of above 1 kW and up to 10 kW, the benchmark cost was set at ₹54 (~$0.79)/W.

The applicable subsidy for various capacities of rooftop solar systems installed at individual residential households under phase-II of grid-connected rooftop solar program would be:

For a capacity of 1 kW, the applicable subsidy is at the rate of 40% which amounts to ₹20,000 (~$277). For 2 kW solar installations, the applicable subsidy is ₹40,000 (~$555). For a 3 kW capacity, the subsidy is ₹60,000. For installation capacity of 4 kW, the subsidy is calculated at 40% for 3 kW and 20% for the balance of 1 kW, which totals to ₹70,000 (~$970).

For all systems with a capacity 10 kW, the subsidy provided is 60% (@40% for 3 kW and 20% for the balance of 7 kW), which adds to ₹130,000 (~$1,802).

However, MNRE has not provided any subsides to installations of above 10 kW capacity.

The growth in the residential rooftop solar segment has been slow, and to address this, the MNRE recently issued operational guidelines to implement the second phase of its grid-connected rooftop solar photovoltaic program. Under the program, 4,000 MW of grid-connected rooftop solar projects in the residential sector would be set up with Central Financial Assistance (CFA) for which DISCOMs and its local offices will be the nodal points for the implementation of the program.


Image Credit: Suntech Power

Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.