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3 Key Benefits Of Solar Panel Subsidies For Your Home

The sun is an amazing fireball that humans have been using to generate energy since the 7th century BC. Now the government is trying to promote the installation of solar panels by offering a solar panel subsidy. 

Doesn’t that sound interesting to you – it sure does to us; hence, we curated this entire post to walk you through some of the key benefits of claiming solar panel subsidies for your home.

Some of the least understood topics revolve around solar subsidy only – how much subsidy will you get if you install solar panels, can you calculate solar panel subsidy on your own, and so much more. 

If you’ve been meaning to clarify your doubts regarding solar panel subsidy, dive in. We promise you’ll be left nothing but happy in the end.

What is a solar panel subsidy and how can you calculate it?

Before you know its benefits, you need to know what it is – solar subsidy is the financial help that the government extends to homeowners installing rooftop solar systems. It’s their way of onboarding more and more people in their mission of popularizing solar energy. 

Now that you know what it is, you’d want a simple answer to know how to calculate it. Let’s help you with the precise calculations:

  • You get a solar panel subsidy of 40% on the L1 prices of solar systems between 1 KW to 3 KW.
  • You get a solar panel subsidy of 20% on the L1 prices of solar systems between 4 KW to 10 KW.

10 KW is the cut limit of a solar subsidy for residential solar installations. 

Your solar installation company will help you identify the L1 rates in your city. Whether it’s the size of the solar system or its type, a good solar installation company will guide you at every step of the way. 

3 reasons why a solar subsidy on solar panels is worth it 

First things first: you get a subsidy on the installation of Made-in-India solar panels only (polycrystalline solar panels). Also, on-grid systems are the candidates. You do not get a subsidy if you are installing an off-grid system.

Moving on, let’s walk you through some amazing benefits of solar panel subsidies

#1. The cost of installing a solar system reduces

You get a 40% subsidy on L1 rates. If you look at it, getting a subsidy reduces the overall solar installation cost. You can check the website of the discom in your city and take the help of your solar installation company to get a final quote. 

#2. The upfront installation cost breaks even quickly

Installing a solar system is an asset, but there’s an upfront investment needed. Although a good solar installation company will offer financial assistance in the form of EMI, you still have to pay no matter if it’s in the form of installments.

When you get a subsidy, the cost will break even much faster — how? Since you paid less than what you would have had to without a subsidy, naturally, the recovery will be sooner.

Wondering what breaking even means? It means when you’ll recover the installation cost. Since a solar system will reduce your electricity bills substantially, it will take a couple of years to break even.  

#3. MNRE is making subsidies simpler 

Some states offer subsidies, some don’t. If you live in cities that do not offer a solar panel subsidy yet, MNRE has come up with a solution.

Very soon, a national portal will be launched. It will allow every citizen of India (no matter the state or city) to apply for a subsidy through the portal. To make things simpler, the MNRE will also be launching a rate card for the subsidy being offered per KW. 

That said, care to venture further and figure out how a solar system can save lakhs of rupees over the years? If yes, tag along, we’re spilling out some beans. 

How does a solar system actually save money?

For those people who do not know yet, solar electricity is free. When you install a solar system, the electricity units being produced by the system wouldn’t be changed. 

Let’s give you a quick example: Suppose, you consume 500 units of electricity a month and your solar system supplies 400 units, you pay for just 100 units now. The rest 400 from the solar system are free. 

Since a tier-1, high-quality solar system has a life of a good 25 years, once the cost of investment breaks even, you’ll get free electricity for all the years to come. 


The government offers a solar panel subsidy so that people install a rooftop solar system. Installing a rooftop solar system is not just a smart investment that’ll save you lots and lots of money, it will also make you the planet’s hero – how?

A solar system does not release toxic carbon emissions since it doesn’t produce toxic gasses in the first place. Your carbon footprint will reduce before you know it. 

In order to do your bit for the environment and simultaneously save money, install a rooftop solar system and avail all the benefits of subsidies being offered by the government. Click here to read more on solar panel subsidy.



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