Categories: Energy

MNRE capital subsidy scheme for off grid solar system

The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the Government of India for all matters relating to new and renewable energy. The Government of India launched the Jawaharlal Nehru National Solar Mission (JNNSM) on 11th January, 2010 with a target to install solar power generation capacity of 20 GW by 2022. MNRE administers JNNSM.  This target is expected to be achieved through large-scale grid connected solar power projects and off-grid solar power projects.

To promote off grid solar power applications, the mission has put forward a target of reaching 200 MW by 2012-13, 1000 MW by 2017 and 2000 MW by 2022.  The detailed targets for solar installations are given in the table below;

Sr. No. Application Segment


Phase 1 (2012-13) Phase 2 (2013-17) Phase 3 (2017-22)
1 Off grid solar

200 MW

1000 MW

2000 MW

2 Grid connected solar including rooftop solar PV projects

1100 MW

4000-10000 MW

20000 MW


JNNSM has created a policy environment for solar technology to make its foray into the Indian market from its inception and both centralized and decentralized technologies are coming up with considerable number of projects. As of 31st May 2013, total 125 MW of installed capacity of off-grid solar projects was recorded in the country (MNRE).

The mission encourages off grid solar system with the focus is on decentralized systems and hybrid systems to meet supplement lighting and other energy requirements. MNRE is providing financial help to the off grid solar projects through its capital subsidy scheme.

MNRE capital subsidy scheme

The scheme provides partial subsidy and interest bearing loan to the project developer. Various off-grid solar PV systems up to a maximum capacity of 100 kWp (Kilowatt peak) per site are eligible for being covered under the scheme. The entire funding under this scheme is based on project basis. A detailed project report including client details, technical & financial details, O&M and monitoring arrangements has to be submitted to the ministry.

Under the project financial criteria, it has to be funded through a mix of debt and incentives where the promoters’ equity contribution would be at least 20%. If the project promoter follow all these applicability conditions, MNRE would provide financial support through a combination of 30 % subsidy and/or 5% interest bearing loans to the eligible project.

By March 2013, the benchmark price for photovoltaic systems with battery back-up support was Rs.200/- per Wp and Rs. 130/- per Wp for without storage battery. For this financial year i.e. 2013-14, the benchmark price for PV systems with battery back-up support was Rs.170/- per Wp and Rs. 90/- per Wp for without storage battery. These rates are for off grid solar power plant of total installed capacity from 10 KWp -100 KWp

The table below provides the revised bench mark costs applicable for year 2013-14;

Sr. No. SPV System


Existing Benchmark cost (Rs./Wp)

Revised Benchmark cost(Rs./Wp)

1 Solar lighting System- street lights home lights, lanterns, Power packs (Multi use) CFL

Up to 300 Wp




Up to 300 Wp



3* Solar Water Pumping System

Up to 5 kWp



4** SPV Power Plants (with battery bank having 6 hours autonomy)

>300 Wp to 1 Kwp



>1 kWp to 10 kWp



>10 kWp to 100 kWp



5 SPV Power Plants (Without Battery)

Up to 100 kWp



>100kWp to 500kWp



6 Micro Grid (DC)

Up to 10 kWp



7 Mini Grid

>10 to 250 kWp


8 Street Lights through SPV power Plant

Up to 100 kWp



*with DC motor. In case AC motor is used there will be a reduction of 15% in the benchmark cost

**with DC motor. In case AC motor is used there will be a reduction of 15% in the benchmark cost

Read more on MNRE website

Capital subsidy of 90% of the benchmark cost is available for special category states i.e. North East, Sikkim, J&K, Himachal Pradesh and Uttarakhand. In addition, capital subsidy up to 60% of benchmark price is exclusively available for standalone rural solar power plants with both technologies i.e. solar PV and solar thermal in remote and difficult areas such as Lakshadweep, Andaman & Nicobar Islands, and districts on India’s international borders.

The release of funds under MNRE capital subsidy scheme is upfront i.e. with installments of 70% on sanction and 30% on completion. It means that the project developer can start construction of the project only after the receipt of capital subsidy and necessary approval from MNRE and the state nodal agency.

The capital subsidy scheme can only be availed by the project developer if the solar equipments that will be used in the project are sourced from MNRE accredited channel partners. These channel partners including solar equipment manufacturers and service providers have been accredited by MNRE through transparent methodology. Click here to view the list of MNRE accredited channel partners.

Reference and further reading – MNRE official website

Also read;

Read more on Top Five States in India with Highest Renewable Energy Capacity  and  Top five states in India with highest installed electricity generation capacity.

State-wise funds released during 2012-13 under the Off-grid and Decentralized Solar Application Scheme

How grid interactive roof top solar PV systems work?

Why is the Indian Power Sector Facing a Supply-Demand Gap?


Shailesh is post graduate in Environment Management from Forest Research Institute (FRI) University, Dehradun, India. Presently he is working in the areas of Environmental and Renewable Energy Advisory Services. He has started during his college days.

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  • Shailesh - Thank you for this very concise, clear summary of the policy. I do have a couple of additional questions that I'm wondering if you could help me with. I have submitted my email address in this reply. If you could forward me your own address I will direct them to you in an email. Any guidance that you could offer would be greatly appreciated.

    Thank you in advance.

    Chris Neidl

    • Hi,
      whether Gridtied rooftop system are eligible for capital subsidy. Also let me know that REC certificates can be availed or not if we avail capital subsidy (REC is for a system >=250kW capacity)

      Please reply


  • HI,

    Can you give me the details about Documentation of PV Plant for domestic use. what is the documentation for Subsidy where i have to approved and where i have to submit the same. actually i want a Fully Independent power system from grid is this possible with Govt. Subsidy,

    • Please visit state nodal agency office. Every state has state nodal agency (e.g. MEDA in Maharashtra) to look after renewable energy related matters. They have solar energy division for the same.

  • I am from Distt. Solan Himachal Pradesh and want to know about the schemes about all this.I have many more queries about this and that to as early as possible because I am about to start one project in few months so kindly Please do reply me or give me Your contact no.

    • Hi Amit, thanks for your comment. The summary of information is already available in this article. In addition, you can visit MNRE website for more details. You can also visit (personally) your state's renewable energy development agency for more accurate information. However, if you want to contact me, please do it. My contact details are available at the website (contact us section).

  • Hi... am starting solar pv plant of 1mw.can u help me to mnre giving subsidy for S .T candidates , required documents and estimation cost ,project model to my mail

  • this is a govt P S U of ASSAM .we are planning a 1MW plant in an Industrial Estate in rural areas near Guwahati ,how can we apply for subsidy ?

    • Solar PV systems up to a maximum capacity of 100 kWp (Kilowatt peak) per site are eligible for being covered under the scheme. Therefore, project with 1 MW of capacity is not eligible to get subsidy. However, you can register your project under Renewable Energy Certificate (REC) mechanism and earn revenue through selling RECs at energy exchanges.

  • Respected Sir/madam I am in this Solar panal manufacturing unit in Bangalore since Two years but I am ppoorman how I can get testing approvel from lab to pay each item Rs.25,000/ to 35,000/ thausands but how pay the cost of the approvel to do business without apprl I can'get any type of orders pls I humble request you help me with regards

  • sir,
    ONGC Vadodara is shortly going to install 100Kwp roof top system for this we will get subsidy , however if go for another project for installation of solar streetlight system in our campus i.e ONGC Vadodara then we will able to get subsidy ?

  • Hi Shailesh,

    Could you brief me on the subsidy claim procedure for 3kW solar water pumping system.
    Where do I find the claim documents? Should I submit the documents to NABARD?

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