Archive · 17 Sep 2025
India: GST Rate Cuts to Boost Rooftop Solar Adoption
The Indian government reduced the Goods and Services Tax (GST) on solar energy equipment.
This means it will be cheaper to buy and install solar panels, especially for homes.
Experts believe this will encourage more people to use solar power.
Lowering taxes on solar equipment and increasing taxes on coal and oil & gas exploration is expected to accelerate the shift away from fossil fuels.
This change is part of India's plan to use more renewable energy and make solar power more attractive.
The GST rate on solar modules and inverters was reduced to 5 percent.
India's rooftop solar capacity was 20,850 MW as of August 2025.
The new GST rates are expected to reduce upfront investment for households by approximately 5–7 percent.
Savings on a 3kW solar system are around ₹10,000.
Taxes on coal and oil & gas exploration were increased to encourage solar adoption.
- Who
- Indian Government
- What
- GST rate reduction on solar equipment
- When
- Effective from September 22, 2025
- Where
- India
- Why
- To promote rooftop solar adoption
Solar Power Advocates
Fossil Fuel Interests
Taxation
Solar Power Advocates
Favor GST reductions to promote clean energy.
Fossil Fuel Interests
Face increased operational costs due to increased taxes.
- Rooftop Solar Capacity (August 2025)
- 20,850 MW
- Rooftop Solar Share
- 17% of overall solar power capacity
- Gujarat Rooftop Capacity
- 5,900 MW
- Maharashtra Rooftop Capacity
- 4,086 MW
- Rajasthan Rooftop Capacity
- 1,773 MW
- Upfront Investment Reduction (Household)
- 5-7%
- Savings on 3kW System
- Approximately ₹10,000
Sources
GST rejig a major push towards advancing India’s climate goals: Centre
GST 2.0: Who Saves More on What and Who Pays for it
GST 2.0 To Inject Rs 2 Lakh Crore Into Indian Economy, Says FM Nirmala Sitharaman
GST reforms to lower 3 kilowatts rooftop solar system prices by up to Rs 10,500
GST Rate Cut Will Make Rooftop Solar More Affordable For Households, Reducing 3-Kilowatt Price By ₹10,500
GST rate cuts to boost rooftop solar adoption, bring down upfront costs
