Projects based on MNRE Capital subsidy

Improve project feasibility with subsidy

To make solar PV systems financially feasible for consumers, the MNRE provides a capital subsidy of up to 30%.

Capital subsidy for solar PV systems in India was provided for system sizes up to 100kW but in the second phase of the NSM (2013-2017) the limit has been increased to system sizes as large as 500 kW.

Process description

The Ministry of New and Renewable Energy (MNRE) offers central financial assistance (CFA) to roof top solar PV systems through its program on “Off-grid and Decentralized Solar Applications”. The scheme is implemented through multiple channel partners. The complete list of channel partners is available at the MNRE website.

Companies offering solar solutions to customers are termed as system integrators. These are companies/ entities, which provide systems and services to clients including design, supply, integration and installation, O&M and other services.

Under the central financial assistance, MNRE is providing a capital subsidy of 30% of the project cost, limited to INR 81 per Wp for PV systems with battery back-up support and INR 57 per Wp for systems without battery back-up support.

There are two methods through which a customer can avail MNRE subsidy:

Subsidy route 1: Through state nodal agencies

The central ministry has appointed one state nodal agency in each state to promote and facilitate the promotional activities of renewable energy in their respective states (For e.g. Tamil Nadu Energy Development Agency (TEDA)). Customers willing to install solar PV system can approach the nodal agency by submitting an application. After the approval from the nodal agency, the customer can get the system installed by an approved system integrator by investing 100% of the capital cost. The nodal agency reimburses the subsidy to the customer after carrying out an inspection of the installation. This process is too complicated and cumbersome for the customer to get the subsidy.

Subsidy route 2: Through accredited channel partners

To ease out the subsidy process, MNRE has registered system integrators as channel partners. These channel partners will install the solar PV system at 70% of the capital cost from the customer and remaining 30% they will claim from the ministry as subsidy. The process is quick and hassle free for the customer.

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