Government incentives and support for solar energy generation

In the written reply to Rajya Sabha, the Union Minister for Power and New and Renewable Energy stated that the Ministry of New and Renewable Energy (MNRE) is implementing Rooftop Solar Programme Phase-II to promote solar energy in the residential sector. Through central financial assistance (CFA), 4,000 MW of rooftop solar capacity expansion is targeted in the residential sector under this programme.

For rooftop solar projects up to 3 kW capacity, CFA is provided up to 40 per cent of the benchmark cost, and up to 20 per cent for system capacity beyond 3 kW and up to 10 kW for individual households. CFA is limited at 20 per cent for group housing societies/residential welfare associations for rooftop solar plants supplying power to common facilities with a maximum capacity of 500 kW.

In addition, the government has taken several steps to promote solar energy in the country. These include:

  • Permitting up to 100 per cent foreign direct investment through the automatic route;
  • Waiver of inter-state transmission system charges for inter-state solar and wind power sales for projects completed by June 30, 2025;
  • A declaration of the renewable purchase obligation trajectory until 2022;
  • Setting up of ultra mega renewable energy parks to provide land and transmission to renewable energy developers on a plug and play basis;
  • Schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM- KUSUM), 12,000 MW CPSU Scheme Phase II, etc;
  • Laying of new transmission lines and creating new substation capacity under the green energy corridor scheme for evacuation of renewable power;
  • Notification of standards for deployment of solar photovoltaic system/devices;
  • Setting up of Project Development Cell for attracting and facilitating investments;
  • Standard Bidding Guidelines for tariff based competitive bidding for procurement of power from grid connected solar PV and wind projects.
  • Government has issued orders that power shall be dispatched against Letter of Credit (LC) or advance payment to ensure timely payment by distribution licensees to renewable energy generators.
  • Conducting skill development programmes to create a pool of skilled manpower for setting up, operation and maintenance of renewable energy projects.


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