Demystifying India’s Latest Solar Energy Policies

India is one of the leading countries in terms of solar energy development, having become the fastest-growing market for solar power globally. India’s solar energy capacity has more than quadrupled in the past five years, increasing from 13,114 MW in 2017 to 57,705 MW in 2022.

India has an ambitious target to achieve Net Zero Emissions by 2070, in addition to attaining the short-term targets which include, Increasing renewables capacity to 500 GW by 2030.

To meet this goal, the government has introduced several policy initiatives and incentives such as increased financing, state initiatives, and tax benefits. These policies have helped to reduce the costs associated with solar energy projects, making them more attractive investments for both domestic and international investors. Furthermore, India’s strong technical know-how and its extensive infrastructure has enabled it to set new standards in solar energy production. As a result of these efforts, India is now a major exporter of solar energy, with most of its exports going to neighboring countries such as Bangladesh, Nepal and Sri Lanka.

Benefits of solar energy for India

1. Increased energy independence

Solar energy provides India with a source of renewable energy that can be used to reduce its dependence on fossil fuels and other imported resources.

2. Cost savings

Installing solar technology is becoming increasingly cost competitive in India with the decreasing prices of photovoltaic (PV) modules and other components.

3. Job creation

Solar energy projects in India are creating thousands of jobs, ranging from manufacturing to installation and maintenance.

4. Cleaner environment

By replacing traditional sources of power with solar energy, India can reduce its carbon emissions and help address climate change.

5. Improved access to electricity

Solar energy projects in rural areas are helping to fill the gap in access to electricity, providing clean and reliable power for people who don’t have access to traditional grids.


The government has introduced several policy initiatives and incentives that have helped to reduce costs, encourage adoption and attract investors towards solar energy.

India’s Latest Solar Energy Policies

Jawaharlal Nehru National Solar Mission

  1. The National Solar Mission was launched in 2010 with the goal of creating a system of incentives and subsidies to promote solar energy development in India.
  2. It sets targets for increasing solar power generation capacity in the country, as well as providing financial assistance for solar projects and research into new technologies.
  3. The mission also seeks to create an enabling environment for the private sector to invest in solar energy projects and reduce the risks associated with them.


Under this, there are several benefits offered for rooftop solar PV plants through,

Accelerated depreciation – If you’re a solar plant developer and want to take advantage of the benefits that come with accelerated depreciation, know that under the Income Tax act, an 80% rate is available for rooftop solar PV systems. This can create significant savings, especially if you have enough profits against which the depreciation can be charged.

MNRE Subsidy – The Ministry of New and Renewable Energy (MNRE) offers Central Financial Assistance through subsidies for capital costs and/or interest rates (depending on the applicant’s needs).

Renewable Energy Certificates (RECs) – Renewable Energy Certificates (RECs) are a way to make more money from your rooftop solar PV plant. RECs are available for rooftop plants that have a capacity of 250 kW or more. Every 1 MWh (1,000 units) of energy generated is eligible for 1 REC. These RECs are traded on power exchanges, where they are sold to organisations that need to satisfy a Renewable Purchase Obligation (usually utilities).

Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya)

  1. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) is an Indian government scheme that was launched in 2017 to provide electricity access to every household in India.
  2. The program aims to achieve universal electrification through the installation of solar photovoltaic (PV) systems in rural areas and providing subsidies to install grid-connected electricity for rural households.
  3. Under the scheme, the government provides financial assistance in the form of loans, grants and other incentives to help meet the upfront costs associated with solar PV installations.
  4. The scheme also supports research into new technologies, such as solar microgrids, to ensure that electricity is provided in a reliable and efficient manner.

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)

  1. Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is an Indian government scheme launched in 2019 to promote the use of solar energy among farmers.
  2. The scheme aims to enable the installation of solar pumps and provide financial assistance (subsidies and loan schemes at reduced interest rates) for rooftop solar plants to be set up on agricultural land.
  3. In addition, it encourages farmers to generate additional income by selling surplus electricity generated from their solar pumps to the grid.

Renewable Energy Distribution Companies (REDCs)

The Indian government has set up Renewable Energy Distribution Companies (REDCs) to facilitate the development of renewable energy projects in the country.

  1. REDCs are responsible for providing access to renewable energy sources, such as solar and wind power, at competitive prices to consumers across India.
  2. REDCs are required to purchase any surplus energy generated from renewable sources and feed it into the grid.
  3. REDCs are also responsible for providing subsidies to those investing in renewable energy projects, as well as providing technical assistance and training to local communities.
  4. The Indian government has been encouraging REDCs to invest in new technologies such as smart grids in order to improve the efficiency and reliability of renewable energy sources.
  5. The Indian government has made it mandatory for all state governments to set up at least one REDC in order to promote the development of renewable energy projects.

Solar Parks and Ultra Mega Solar Projects

write points to explain the schemes under solar parks and ultra mega solar projects

  1. The Indian government has launched solar parks and ultra mega solar projects to promote investment in large-scale solar energy generation.
  2. Solar parks are dedicated areas set aside for the installation of large-scale solar projects, providing greater visibility and accessibility for investors.
  3. Ultra Mega Solar Projects are a form of public-private partnership, which involve the construction of large-scale solar projects with the help of public funding.


Apart from these, India’s individual states have also introduced policies that provide even more incentive to install solar panels on rooftops.


Overall, these initiatives are expected to lead to a significant increase in the share of renewable energy sources in India’s total electricity generation, helping the country move towards its goal of increasing renewables capacity to 500 GW by 2030.