Central Solar Subsidy Rates in India 2026: MNRE Scheme Breakdown

The Short Answer

The central solar subsidy under PM Surya Ghar follows a tiered per-kW rate: ₹30,000/kW for the first 2 kW and ₹18,000/kW for capacity between 2–3 kW. Maximum subsidy: ₹78,000 (at 3 kW). Systems above 3 kW still receive only ₹78,000. The subsidy is a one-time capital grant credited to your bank account — not a loan or tax benefit.

Subsidy Rate Structure Explained

The tiered structure intentionally favours smaller systems, where subsidy has the most impact:

Capacity SlabSubsidy RateCumulative Subsidy% of Typical System Cost
First 1 kW₹30,000/kW₹30,00040–50%
1–2 kW₹30,000/kW₹60,00043–55%
2–3 kW₹18,000/kW₹78,00041–52%
Above 3 kW₹0/kW (capped)₹78,000Decreasing %

Design intent: For a 1 kW system, subsidy covers 40–50% of cost. For 10 kW, only about 12–15%. This steers the scheme towards the households that benefit most from the financial support.

Subsidy Amount by System Size

Here is the exact subsidy you receive for each common system size:

System SizeSubsidy CalculationTotal SubsidySystem Cost (avg)Net Cost
1 kW1 × ₹30,000₹30,000₹70,000~₹40,000
1.5 kW1.5 × ₹30,000₹45,000₹95,000~₹50,000
2 kW2 × ₹30,000₹60,000₹1,25,000~₹65,000
2.5 kW(2 × ₹30,000) + (0.5 × ₹18,000)₹69,000₹1,45,000~₹76,000
3 kW(2 × ₹30,000) + (1 × ₹18,000)₹78,000₹1,70,000~₹92,000
4 kWCapped₹78,000₹2,20,000~₹1,42,000
5 kWCapped₹78,000₹2,85,000~₹2,07,000
10 kWCapped₹78,000₹5,75,000~₹4,97,000

System costs are indicative averages. Actual prices vary by panel brand, inverter type, and location.

→ Detailed system cost breakdown

Subsidy vs Other Financial Incentives

The central subsidy is a direct capital grant. Here is how it compares to other available incentives:

IncentiveTypeFor WhomValue (3 kW)
PM Surya Ghar subsidyUpfront capital grantResidential₹78,000 one-time
Accelerated depreciationTax benefitCommercial/Industrial~₹72,000 tax saving*
State top-up (Gujarat)Additional grantResidential₹30,000 one-time
Net metering savingsBill reductionAll grid-connected₹15,000–₹40,000/year

*Accelerated depreciation calculated at 40% on ₹1,80,000 system cost at 30% corporate tax rate. Not applicable to residential.

Residential consumers benefit from the subsidy as a direct cost reduction. The ongoing savings from net metering add up to far more over the system's 25-year life.

How the Subsidy Is Disbursed

The central subsidy flows through a defined government payment pipeline:

  1. Trigger: DISCOM uploads commissioning report to PM Surya Ghar portal
  2. Verification: MNRE verifies installation matches approved specifications
  3. Approval: Subsidy amount calculated based on installed (not applied-for) capacity
  4. Payment processing: Routed through Public Financial Management System (PFMS)
  5. DBT credit: Amount credited to your Aadhaar-linked bank account
  6. Confirmation: SMS notification sent on successful credit

Timeline: 15–45 days from commissioning to bank credit. If your Aadhaar-bank linkage has issues, the payment bounces and needs re-processing after linkage correction.

Important Rules and Limitations

Know these rules to avoid surprises:

  • One subsidy per consumer number: If you already received subsidy under a previous MNRE scheme, you cannot claim again under PM Surya Ghar
  • On-grid only: Off-grid and standalone systems are excluded. The system must be grid-connected with net metering
  • Cannot be combined with commercial depreciation: You choose either residential subsidy OR commercial accelerated depreciation, not both
  • Capacity based on installation: If you applied for 3 kW but installed 2 kW, subsidy is calculated on 2 kW (₹60,000, not ₹78,000)
  • No retrospective claims: Systems installed before PM Surya Ghar registration do not qualify

Is 3 kW the Sweet Spot?

From a pure subsidy-optimisation perspective, 3 kW maximises your per-kW subsidy benefit. But the right system size depends on your electricity consumption, not just subsidy:

  • If your monthly bill is under ₹1,500 → 1–2 kW is sufficient (₹30,000–₹60,000 subsidy)
  • If your bill is ₹1,500–₹3,000 → 3 kW is optimal (₹78,000 subsidy, best value)
  • If your bill exceeds ₹3,000 → 5 kW+ makes economic sense despite lower subsidy-per-kW

The subsidy is a one-time benefit. Your 25-year electricity savings dwarf the subsidy amount. Size your system for maximum long-term savings, not just maximum subsidy percentage.

→ Calculate your optimal system size

Get Your Exact Subsidy Amount

Solar Vipani's installers provide quotes that clearly show your subsidy amount and net out-of-pocket cost. No guesswork.

Get free solar quotes with subsidy breakdown →

Common questions

What is the exact central subsidy for a 3 kW solar system?
For a 3 kW system: (2 kW × ₹30,000) + (1 kW × ₹18,000) = ₹78,000. This is the maximum central subsidy available. Systems above 3 kW also receive ₹78,000 — the subsidy does not increase beyond 3 kW.
Why is the subsidy capped at 3 kW?
The tiered structure ensures maximum benefit reaches households with modest energy needs. The ₹78,000 cap at 3 kW means the subsidy covers 40–50% of a 3 kW system cost. For larger systems (5–10 kW), which typically belong to higher-income households, the same ₹78,000 represents a smaller percentage.
Is the central subsidy a loan or a grant?
It is a direct, non-refundable grant. You do not need to repay it. The amount is credited to your bank account via DBT after installation and DISCOM verification. There is no EMI, interest, or repayment obligation.
Can I get central subsidy for a solar system larger than 10 kW?
PM Surya Ghar allows residential systems up to 10 kW (or your sanctioned load, whichever is lower). The subsidy remains capped at ₹78,000 regardless of size above 3 kW. For systems above 10 kW, residential subsidy does not apply — these are typically classified as commercial.
Has the central subsidy rate changed recently?
The current PM Surya Ghar rates (₹30,000/kW up to 2 kW, ₹18,000/kW for 3rd kW) were set at launch in February 2024 and are fixed for the scheme period until 2027. Previous MNRE schemes had lower rates. The current rates are the highest central solar subsidy India has ever offered.

Ready to go solar? Find verified solar installers across India

Get free solar quotes in India