Rooftop Solar in India: Subsidies, Sizing and the Process

India's residential rooftop programme is one of the largest household solar initiatives anywhere. It combines capital subsidy with a structured approval process — and the process is where most applicants encounter friction.

How the subsidy is structured

The national residential scheme provides capital subsidy — a contribution toward installation cost — on a sliding scale according to system size, with a cap for larger household systems.

Three conditions typically govern eligibility, and each one catches applicants out:

• Residential use. Commercial and industrial installations fall under different frameworks.
• Registered vendors. Subsidy is generally conditional on using an empanelled installer. Choosing a cheaper unregistered contractor usually forfeits the subsidy entirely, which frequently costs more than it saves.
• Approved equipment. Modules and sometimes other components must appear on approved lists.

Scheme parameters are revised from time to time. Confirm the terms applying on your application date rather than relying on figures quoted in an older article or a vendor's brochure.

Size from your bill, not from the subsidy cap

The most common sizing error is choosing the system size that maximises subsidy rather than the one that matches consumption.

Start with twelve months of electricity bills and calculate your average monthly units. Then convert:

• In most of India, one kilowatt of well-installed solar generates roughly 4 to 4.5 units per day averaged across the year — approximately 120 to 135 units per month.
• Divide your average monthly consumption by that figure to get an approximate system size.

A household using 400 units a month lands near 3 kW. One using 700 units lands near 5 to 5.5 kW. The same arithmetic we set out for sizing a system in Pakistan applies, since the resource is broadly comparable across much of the subcontinent.

Then check three constraints that override the arithmetic: available unshaded roof area, sanctioned load on your connection, and your distribution company's limits on system size relative to that load.

Why self-consumption still matters most

Under net metering, a unit consumed as it is generated offsets your full retail tariff. A unit exported earns the applicable export rate, which is usually lower.

So the value of a system depends heavily on when the household uses electricity. A home occupied during the day captures far more value than one empty from morning to evening. Shifting flexible loads — washing machines, water pumps, dishwashers — into daylight hours raises returns without adding capacity. We set out the underlying logic in net metering versus gross metering.

The process, and where it stalls

The sequence is broadly consistent:

• Register on the applicable portal and submit an application.
• Select an empanelled vendor and agree a system design.
• Obtain technical feasibility approval from the distribution company.
• Install the system.
• Pass inspection.
• Have the net meter installed and commissioned.
• Submit documentation and claim subsidy.

Physical installation takes days. Approval, inspection and net meter installation take much longer, and they are outside the installer's control regardless of what the sales conversation implied.

Build that into your expectations, and be sceptical of anyone promising a total timeline that assumes every administrative step proceeds without delay.

What to check before signing

• Is the vendor genuinely empanelled under the scheme, verified independently rather than on their word?
• Are the proposed modules and inverter on the approved lists?
• Does the quotation include application processing and net metering, or are they extra?
• What generation estimate is offered, and with what assumptions — irradiance, losses, soiling, temperature derating?
• What warranties apply to modules, inverter and workmanship, and who honours them locally?
• Who is responsible if subsidy is refused because of a vendor or equipment issue?

That last question is worth putting in writing.

The honest case

Rooftop solar in India is a sound investment for households with reasonable consumption, an unshaded roof and daytime usage. The subsidy improves the return; it does not manufacture one.

It follows that a household should not install a larger system than it needs simply to capture more subsidy. Surplus generation exported at a lower rate pays back slowly, and the capital would have been better left unspent.

The bottom line

Size from your bill. Use an empanelled vendor with approved equipment, or accept that you are forgoing the subsidy. Expect the administrative steps to dominate the timeline. Confirm current scheme terms before committing rather than trusting a brochure.

Keep up with the scheme as it changes

Subsidy rates, eligibility rules and net metering terms are revised periodically, and installers are rarely the first to tell you.

• Follow our South Asia energy coverage for policy and scheme developments.
• Read the solar energy desk for sizing, equipment and economics.
• Subscribe to The Energy Edit — free, independent, no paywall. Start here.

Installers and equipment suppliers serving Indian households: explore partnership with Arcnex Energy.