Fiscal and financial incentives for rooftop solar by MNRE

Solar rooftop projects have gained significant momentum in India over the past few years, owing to the government’s initiatives and support. One of the key factors that have contributed to the growth of rooftop solar installations is the availability of fiscal and financial incentives. These incentives are offered by the government to promote the adoption of rooftop solar installations, reduce the dependence on fossil fuels and achieve the country’s renewable energy targets.

Here are some of the fiscal and financial incentives offered by the government for solar rooftop projects:

1. Capital Subsidy: The Ministry of New and Renewable Energy (MNRE) provides capital subsidies for the installation of solar rooftop systems. The subsidy amount varies depending on the size of the installation and is available for both residential and commercial installations.
2. Accelerated Depreciation: Solar rooftop installations are eligible for accelerated depreciation under the Income Tax Act. This means that businesses can claim a higher depreciation rate on the capital investment made towards the installation of a solar rooftop system.
3. Net Metering: Net metering is a billing mechanism that allows rooftop solar system owners to sell excess energy generated by their systems to the grid. The energy generated is measured by a bi-directional meter, and the excess energy is credited to the owner’s electricity bill.
4. Renewable Energy Certificates (RECs): Solar rooftop installations are eligible for RECs, which are tradable certificates that represent the environmental attributes of renewable energy. These certificates can be sold in the market, providing additional revenue for the solar rooftop system owner.
5. Tax Benefits: The government provides tax benefits to solar rooftop system owners under various sections of the Income Tax Act. For instance, businesses can claim a tax deduction on the interest paid on loans taken for the installation of solar rooftop systems.

Apart from these incentives, the government also provides financial assistance in the form of loans and grants for the installation of solar rooftop systems. Various banks and financial institutions offer solar rooftop financing schemes to their customers, making it easier for consumers to invest in solar rooftop installations.

In conclusion, the fiscal and financial incentives offered by the government for solar rooftop projects have played a vital role in promoting the adoption of rooftop solar installations. These incentives have made rooftop solar more affordable and attractive for consumers and businesses. With the right measures and policies, solar rooftop installations have the potential to become a major contributor to India’s renewable energy targets and help the country achieve its climate goals.