Solar Revolution in India: 5% GST on Panels & Inverters + Huge Subsidies – Make Your Home Bill-Free Today!

• Published
• By Anupam Nath

The Indian government has made a game-changing move in the renewable energy sector by reducing the Goods and Services Tax (GST) on solar panels, inverters, and other key components from 12% to 5%, effective from September 22, 2025. This bold decision, announced by the GST Council, aims to accelerate India's transition to clean energy, lower electricity costs for households, and support national goals like achieving 500 GW of non-fossil fuel capacity by 2030. Combined with the ongoing PM Surya Ghar: Muft Bijli Yojana, this tax cut makes rooftop solar more affordable than ever, potentially eliminating electricity bills for millions of homes. Now is the perfect time for every household to switch to solar.

Why the GST Reduction Matters

Previously, solar power generating systems, including panels, inverters, and related equipment, attracted a 12% GST, which increased the overall cost of installations. The new 5% rate applies to a wide range of renewable energy devices, such as solar modules, cells, inverters, solar cookers, lamps, wind-operated generators, biogas plants, and more. This rationalization reduces the capital cost of solar projects significantly, making them more viable for residential users, farmers, industries, and developers.

Industry reports indicate that this change has already led to price drops in solar modules and cells. For homeowners, it translates to immediate savings on upfront costs. The reduction aligns with broader reforms to promote green energy, create jobs in manufacturing (potentially 5-7 lakh new opportunities), and position India as a global leader in climate action.

Impact on Solar System Prices

The GST cut directly lowers the price of solar systems. Here are approximate cost reductions based on market trends post-September 2025:

A 1 kW rooftop solar system, which previously cost around ₹70,000, now comes down to about ₹65,000 or less.

For a 3 kW system (common for average households), prices have dropped from ₹2-2.5 lakh to roughly ₹1.85-2.2 lakh.

A 5 kW setup, ideal for larger homes or small businesses, has seen reductions from ₹3-3.5 lakh to around ₹2.95 lakh or lower.

These figures vary by brand, location, and installer, but the 7% GST savings (from 12% to 5%) typically shave off 5-8% from the total bill. With falling global solar component prices and increased domestic manufacturing, costs are expected to stabilize even further in the coming months.

The Power of PM Surya Ghar: Muft Bijli Yojana

Launched in 2024 with a massive outlay of over ₹75,000 crore, the PM Surya Ghar: Muft Bijli Yojana (Prime Minister's Free Electricity Scheme) complements the GST reduction perfectly. The scheme targets 1 crore households with rooftop solar installations, providing free electricity up to 300 units per month—enough to cover most average family needs.

Key subsidy details include:

For systems up to 2 kW: ₹30,000 per kW (up to ₹60,000 total).

For additional capacity from 2-3 kW: ₹18,000 per kW.

Maximum subsidy capped at ₹78,000 for systems of 3 kW or more.

The subsidy is transferred directly to your bank account within 30 days of installation and approval by the local discom (electricity distribution company). Surplus power generated can be sold back to the grid under net metering, earning credits or payments—turning your rooftop into a mini power plant that pays you!

As of late 2025, millions of systems have been installed under the scheme, with over 7.7 lakh households already enjoying zero electricity bills. The combination of lower GST and this generous subsidy shortens the payback period dramatically—often to 4-6 years—after which you enjoy virtually free, clean electricity for 25+ years (the typical lifespan of solar panels).

Benefits Beyond Cost Savings

Switching to solar offers multiple advantages:

Zero or Near-Zero Electricity Bills — Say goodbye to rising power tariffs. Generate your own power and reduce dependence on the grid.

Environmental Impact — Solar energy is clean and renewable, reducing carbon emissions and combating climate change. Each kW of solar offsets tons of CO2 annually.

Energy Independence — Protect yourself from frequent power cuts, voltage fluctuations, and future tariff hikes.

Increased Property Value — Homes with solar installations command higher resale prices due to lower running costs.

Government Incentives — Easy online application via the official portal, low-interest collateral-free loans, and quick approvals.

Job Creation and Economic Boost — Supports local installers, technicians, and manufacturers.

How to Get Started with Rooftop Solar

Check Eligibility — Any residential rooftop owner with sufficient space (shadow-free) and a valid electricity connection qualifies.

Apply Online — Visit the official PM Surya Ghar portal (pmsuryaghar.gov.in), register, and submit details.

Get Quotes — Choose empanelled vendors for quality assurance.

Installation — Professional setup usually takes 1-3 days.

Claim Subsidy — Submit documents for subsidy disbursement and net metering approval.

Consult certified installers to assess your roof's suitability and energy needs. Many offer end-to-end services, including financing options.

The Bottom Line: Act Now!

With the GST slashed to 5% from September 22, 2025, and powerful subsidies under PM Surya Ghar Muft Bijli Yojana, rooftop solar has never been more accessible or economical. Households can achieve energy self-reliance, slash bills to zero, and contribute to a greener India—all while enjoying a quick return on investment.

This is truly the right time to go solar. Don't miss out—embrace the sun's free power today and secure a brighter, sustainable future for your family and the planet.