In New Delhi, on September 17, the government announced a major reform: lower GST makes rooftop solar systems more affordable for Indian families. The Goods and Services Tax (GST) on renewable energy dropped from 12% to 5%. This cut reduces the cost of a 3 kW rooftop system by Rs 9,000 to Rs 10,500.
The Ministry of New and Renewable Energy said this step will push thousands of families to adopt solar power. Programs like PM Surya Ghar: Muft Bijli Yojana will draw more participation as costs fall.
The GST cut also slashes expenses for large projects. Developers usually spend Rs 3.5 to 4 crore per megawatt, but now they save Rs 20 to 25 lakh per MW. A 500 MW solar park alone could save over Rs 100 crore.
Electricity distribution companies (DISCOMs) expect lower procurement costs, with nationwide annual savings between Rs 2,000 and 3,000 crore. Consumers benefit directly through reduced electricity bills.
Electricity distribution companies (DISCOMs) will see lower procurement costs, translating into nationwide annual savings of Rs 2,000 to 3,000 crore. Consumers benefit directly, as cheaper solar projects reduce their electricity bills.
Farmers are another group set to gain. Under the PM-KUSUM scheme, the price of a 5 HP solar pump drops by nearly Rs 17,500. If 1 million pumps are deployed, farmers across India, including Punjab, could save Rs 1,750 crore. This ensures affordable irrigation and better agricultural productivity.
The reform also boosts Indian manufacturing. Solar module and equipment costs will decline by 3% to 4%, making local products more competitive. This supports ‘Make in India’ and ‘Aatmanirbhar Bharat.’
India’s target of 100 GW solar capacity by 2030 looks closer with these measures. Each gigawatt of solar manufacturing creates about 5,000 jobs, and officials expect 5 to 7 lakh jobs over the next decade. This strengthens both energy security and employment.
The move also boosts investor confidence, encouraging faster agreements and quicker project launches in the renewable energy sector.
In conclusion, lower GST makes rooftop solar systems a turning point for families, farmers, and businesses. It drives clean energy adoption, supports manufacturing, and creates jobs while cutting electricity costs for millions.
