A 1 kW Rooftop Solar System to Cost Just ₹22,200 for Residential Consumers in Punjab

The systems must be installed through empanelled vendors for subsidy eligibility


The Punjab State Power Corporation Limited (PSPCL) has announced subsidies for grid-connected rooftop solar systems ranging between 1 and 10 kW in the residential sector, which could make solar very affordable.

The PSPCL noted that this subsidy is not available for installations in the non-residential sector like social, government, educational, public sector undertakings, statutory or autonomous bodies, private commercial, and the industrial sectors.

The state body said that it had selected agencies and vendors for the installation of these grid-connected rooftop solar systems in the residential sector, and the projects must be installed and commissioned only through these empanelled vendors to be eligible for the subsidy. It was also added that the solar cells and modules used in these projects must fall under the Domestic Content Requirement (DCR) category.

Also, PSPCL noted that the discovered rate for the installation of these systems (with subsidy) is ₹37,000 ($510)/kWh. Since the government of India already provides a 40% subsidy for systems up to 3 kW and 20% on systems between 3 kW and 10 kW, the state has directed vendors to bill the consumers only the remaining amount after deducting the subsidy. For example, for a 1 kW system, the vendor shall charge the consumer only ₹22,200 ($307) which is ₹37,000 ($510) minus ₹14,800 ($205) (@ 40% subsidy).

While the prices after subsidy look attractive, it remains to be seen how many installers are willing to participate in this program. In the past, rooftop installers have suffered with some going out of business due to the non-payment of subsidies by government agencies.

In September 2019, the Ministry of New and Renewable Energy (MNRE) had issued a clarification regarding the subsidy applicable for rooftop solar installations by individual residential households under phase-II of grid-connected rooftop solar program. 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.

A few months ago,  Punjab Energy Development Agency (PEDA) issued a request for proposal (RfP) to set up 10 MW of grid-connected rooftop solar systems atop both government and private buildings in the state. The solar systems will be used to sell power under the RESCO model and will be installed at multiple locations across the state. The RESCO model is a system where the developer owns the solar project, and the consumer only has to pay for the energy generated.

Previously, the state issued a similar tender to set up rooftop solar projects totaling 1,699 kW on various buildings owned by Punjab State Transmission Corporation Limited These rooftop solar PV projects will also be developed under the RESCO model.

Recently, PEDA also issued a Request for Proposal for the approval of rates of different capacities of grid-interactive rooftop solar PV projects in the state.

Nithin Thomas is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.