How India and Tamil Nadu Support Rooftop Solar: Subsidies, Rules and Taxes Explained

Governments promote green energy in many ways, but only a few of them change what you pay for a rooftop system or what it earns you. This page lists those few, for India and for Tamil Nadu, with the amount, who qualifies and where to claim each one. Every figure is from an official order or a government release, linked at the end.

The short answer

Where India stands in 2026

The target in India's climate pledge was half of all power capacity from non-fossil sources by 2030. It was crossed in June 2025, five years early, mostly on the back of ground-mounted solar. Rooftop is still a small slice, which is why the measures below exist.

Cash: the central subsidy

PM Surya Ghar pays 60% of the benchmark cost for the first 2 kW and 40% of the third kilowatt. In rupees that is Rs 30,000 for 1 kW, Rs 60,000 for 2 kW and Rs 78,000 for 3 kW or more. The money comes to your bank account after the net meter is fixed and the installation is inspected. The same scheme set up a collateral-free bank loan at around 7% for systems up to 3 kW. The amounts and the claim steps are on our rooftop subsidy page.

Cash: the Tamil Nadu top-up

The state adds Rs 5,000 for 1 kW, Rs 10,000 for 2 kW and Rs 22,000 for 3 kW and above, under G.O. (Ms) No. 102 of the Energy Department. It is limited to the first 1,00,000 households that registered on the national portal on or after 5 August 2026. Together the two payments reach Rs 1,00,000 on a 3 kW system. Our note on what G.O. 102 says has the conditions.

The rule that makes rooftop pay: net metering

A subsidy lowers the price once. Net metering is what makes the system pay every two months. Under TNERC Order No. 8 of 2021, a home's exported units are set off against the units it draws, one for one. Credit that is still unused on 31 March lapses. A network charge of 20% of Rs 1.53 applies on every unit generated for systems up to 10 kW. The full rules, including what businesses get instead, are in our guide to net metering in Tamil Nadu.

The free units, and an honest caveat

Since 10 May 2026 a Tamil Nadu home that uses up to 500 units in two months gets the first 200 free. That is a government measure too, and it works against solar for very small homes: if your bill is already zero, panels cannot lower it. Above 500 units the free units drop to 100 and the slab rates climb to Rs 11.55, which is where rooftop solar earns its keep. The slabs are in our 2026 tariff table.

Tax: GST at 5%

From 22 September 2025 the GST on solar cells, panels and solar power devices is 5%, down from 12%. The change came from the 56th GST Council meeting. On a Rs 2,00,000 system that is roughly Rs 10,000 less tax than a year earlier, before any subsidy. It applies to the goods; installation is a service and is billed on its own line.

The made-in-India rule: ALMM and DCR

MNRE keeps an Approved List of Models and Manufacturers. Panels must be from List-I. From 1 June 2026 the cells inside them must be from List-II as well. PM Surya Ghar has a domestic content requirement on top, and the ministry has said there is no relaxation of it.

For you this means one check on every quote: the panel brand and model must be on the ALMM list and made with Indian cells, or the subsidy will not be released. A quote that is cheaper because the panels are imported is not a cheaper quote once you take Rs 78,000 off the other one. Our guide to how an installation is done covers what else to look for.

For farms: PM-KUSUM

PM-KUSUM is the scheme for farmers. Component B supports stand-alone solar pumps where there is no grid supply, and Component C puts panels on grid-connected pumps so the farmer can sell the daytime surplus. Central assistance covers pumps up to 7.5 HP in Tamil Nadu. Applications go through the state agriculture agency, not the rooftop portal.

For businesses: open access and depreciation

Two measures matter for a shop, office or factory. The Green Energy Open Access Rules of 2022 let any consumer with 100 kW or more of contracted demand buy green power directly, down from the old 1 MW limit. And under Section 32 of the Income Tax Act a solar plant can be depreciated at 40% in the first year, which pulls the tax benefit forward. Neither applies to a home. How a business system differs from a home one is in our note on solar for homes and businesses.

What these measures add up to

For a Coimbatore home on 600 to 1,000 units a cycle, the subsidy, the 5% GST and net metering together bring a 3 kW system to about Rs 1,05,000 and a payback of four to seven years. The money case in detail and what the subsidy does and does not cover are on their own pages. Our on-grid systems are priced with all of this built in.

Questions people ask

Sources and disclaimer

• MNRE, Physical progress of renewable energy, as on 31 August 2026. Capacity figures.
• PIB: Cabinet approves PM-Surya Ghar: Muft Bijli Yojana, 29 February 2024. Subsidy rule and the loan.
• TNERC Order No. 8 of 2021: generic tariff for grid-interactive solar. Net metering.
• TNERC Order No. 5 of 2026: 200 free units
• pv magazine India: GST on solar cells and modules cut to 5%, 4 September 2025
• SolarQuarter: MNRE amendment mandating ALMM compliance for solar cells from June 2026. ALMM List-II and the DCR condition.
• Vikaspedia: PM-KUSUM scheme
• Trilegal: Green Energy Open Access Rules, 2022. The 100 kW threshold.
• India Briefing: accelerated depreciation of solar power assets in India. Section 32, 40%.
• Mongabay India: India achieves 50% non-fossil power capacity five years ahead of target

Figures were checked against these sources on 6 October 2026. Schemes have quotas, dates and conditions that change. RK Solar Solutions is an installer, not a government agency. Confirm the current rule on the official portal before you sign.

Not sure which of these apply to your roof? Send us your last two EB bills and we will list what you can claim, in writing.