TN’s Subsidy Scheme to Bring Down Rooftop Solar Panels Cost for Domestic Consumers

Chennai:The Tamil Nadu government announced a new ‘Rooftop Solar Subsidy Scheme’ in its budget proposals for the year 2026-27 and the scheme will be introduced in convergence with the ‘Pradhan Mantri Surya Ghar Muft Bijli Yojana’ to bring down the cost of installation of solar panels at houses.

Under the scheme, a subsidy of up to Rs. 1 lakh will be provided to domestic consumers for installing solar panels, significantly reducing their electricity bills and supporting the transition to renewable energy.

The budget announcement aims at boosting the use of rooftop solar energy in Tamil Nadu. Till July this year, the total rooftop capacity of Tamil Nadu stands at 316 MW with 87,039 installations in 1,03,004 households, including apartments.

Under the dual incentives by the Union and state government schemes for solar rooftops, residential consumers can obtain Rs. 78,000 in Central assistance in addition to state subsidy of up to Rs. 1 lakh. The total finance will depend on the amount of electricity to be generated by the system.

For a 1kW system, a Rs. 30,000 Central subsidy is given and it doubles to Rs. 60,000 for a 2kW system. The maximum assistance of Rs. 78,000 is given for a 3kW or higher system. The top-up provided by the state government will be up to Rs. 1 lakh, based on the system.

The consumers should choose the capacity of the system based on their monthly electricity needs. For a consumer using up to 150 units, a system with a capacity of 1kW or 2kW capacity is sufficient. However, this will only get the base Central subsidy of Rs. 30,000 in addition to the state top-up. If the consumer uses 300 units per month, they need a system with a capacity of 2kW to 3kW and this will get the full subsidy of Rs. 78,000 from the Centre, besides the state top-up. A system to generate more than 3kW should be installed when the customer uses more than 300 units. The consumer receives the maximum Central subsidy and the state top-up for installing a system with more than 3kW.

Domestic consumers must apply through the online national grid and portal to secure approvals and disbursal of the subsidy. They should visit the PM Surya Ghar National Portal and select Tamil Nadu. The customer should choose Tangedco or TNPDCL as the distribution company and the consumer electricity service number. People should submit the rooftop solar application to get technical feasibility approval from the state distribution company.

The customer should go for vendor selection, choosing the MNRE-empanelled solar installer to set up the system. The work completion report should be submitted through Tangedco unified solar rooftop portal. After the inspection and net-meter commissioning, the subsidy funds will be deposited directly into the bank account given by the customer.

During the installation, the on-grid systems are connected directly to the local grid without heavy battery storage costs and they are default eligible systems for government subsidies. The solar power generated by the rooftop panel is first consumed by the house or apartment. If there is any excess power, it would go back to the Tangedco grid. The monthly bill is calculated strictly on the net energy consumption, subtracting the total solar energy exported from the total energy imported.

Government officials and representatives of private solar rooftop panel companies assert that the monthly bill will come down drastically for any consumer if he chooses the right system. For most of the consumers who pay over Rs. 10,000, the current bill has decreased to around Rs. 1,000 or even less. Discounting the initial investment, the system is economically beneficial for the consumer. After five to six years, based on the system installed, the consumer gets back what he invested and whatever electricity is generated afterwards is free for the consumers. The maintenance charges for the rooftop panels, too, are not high unlike the electronic appliances at home.

There is a notion that Chinese solar panels are cheaper than Indian products but they are not cheaper since the Centre’s subsidy of Rs. 78,000 and the state subsidy of Rs. 1 lakh is not available for the Chinese solar panels. The Chinese products have a lower manufacturing cost by 5 to 15 per cent. But, consumers cannot claim subsidies since the ministry of new and renewable energy makes the domestic content requirement for solar panels compulsory.

The PM Surya Ghar National Portal requires a 16-digit digital domestic content requirement (DCR) certificate verifying that the solar module and the solar cells inside were manufactured within India. Chinese panels cannot generate this certificate.

Even if the domestic consumer waives the subsidy using the ‘give it up’ option, any panel connected to the grid must belong to the MNRE-approved list of models and manufacturers (ALMM). The 2026 ALMM regulations strictly filter out directly imported solar cells from Chinese factories to support local manufacturing hubs.

Besides, the Indian government also imposes 40 per cent basic customs duty on imported panels, totally taking away the cost advantage of Chinese products due to their low manufacturing costs. In the final analysis, Indian panels are cheaper for residential users. Indian solar panels are advised for domestic consumers while private commercial and industrial could have some advantages when using Chinese solar panels. The Indian and Chinese solar panels are identical in quality and durability. What applies to Chinese solar panels applies for panels from other foreign countries, too.

Sourcing Indian solar panels provide reliable, 25-year, performance warranties along with the accessible local post-sales service networks. All the imported variants have high shipping costs and complex administrative hurdles for warranty execution.

Highlights

Rs. 30,000 Central subsidy for 1kW system, Rs. 60,000 for 2kW system

Maximum assistance of Rs. 78,000 by Centre for 3kW or higher system

1kW system sufficient for consumer using up to 150 units

Consumer using 300 units needs system with 2kW to 3kW capacity

3kW solar energy system required for those using over 300 units

Domestic consumers must apply through online national grid and portal

Feasibility approval necessary from Tangedco

Customer should select vendor from MNRE empanelled list

After inspection and net-meter commissioning, subsidy funds to be deposited in bank accounts

Excess power to go back to Tangedco grid

Consumer starts enjoying free current after 3 to 6 years based on system

Rooftop panels have 25-year warranty

Central and state subsidy available only for Indian solar panels

40 per cent customs duty for Chinese or foreign panels increases cost

Apartments, Gated Communities Can Jointly Instal Rooftop Solar Panels

Chennai:Jointly installing rooftop solar panels in an apartment complex requires navigating shared terrace rights and specific electricity distribution rules. Resident welfare associations or group housing societies are eligible for a common infrastructure subsidy of Rs. 18,00 per kW.

The apartments can choose a common area powering or group net metering, based on their requirements. If common area powering is chosen, the solar plant is connected to the apartment’s common electricity meter. The power directly runs shared amenities like elevators, water pumps, corridor lighting and EV charging points, lowering the monthly maintenance charges for all the residents uniformly.

If group net metering is chosen, a single large solar array is installed on the roof but the generation is virtually split and credited directly to individual flat owner’s separate discom. Residents can specify their energy allocation ratio based on their financial investment and surplus power brings down the electricity bills of individual consumers.

In apartments and gated communities, the consumers usually form a solar committee, a small group of residents to handle vector coordination, site mapping and feasibility studies. The resident welfare associations convene a general body meeting and pass a formal society resolution, authorising the association to instal the system. The managing committee of the apartments must issue an official no-objection certificate allowing the installation since Tangedco requires the certificate to approve multi-user grid connection.

The technicians need 100 square feet of unshaded area to instal 1kW system panels and more unshaded area is needed to instal solar panels generating more power. Tall buildings or trees nearby can obstruct sunlight. The consumer should contact a vendor officially registered with the national portal guarantee compliance and ensure the standard 25-year panel performance warranty.

If it is a registered society, it should apply through the subsidy portal on the PM Surya Ghar National Portal under the group housing or resident welfare association category under the registered society credentials and the common utility meter account number.

The vendor will set up the array and request a technical inspection. Local discom engineers will exchange the old unidirectional meter for a bidirectional group net meter to trace power feed-ins. It is better to budget a small amount from the society or association fund for bi-weekly water cleaning of the panels as gathering dust brings down power generation.

The consumers should monitor the installation to ensure that the vendor instals proper lighting arrestors to guard electronics, and schedules structural checks to prevent terrace water leakage under the mounting legs.

Lesson for TN to Learn from Kerala

Chennai:Though the Kerala rooftop solar scheme is a success, going by the number of people opting for it, the Kerala State Electricity Board (KSEB) is facing stiff challenge and heavy losses due to lack of battery energy storage system (Bess).

By May this year, Kerala’s solar capacity crossed 2,508 MW with 2,036 MW coming from rooftop solar panels. Thousands of consumers have brought their monthly electricity bills to zero using the Kerala state government initiatives and the PM Surya Ghar Yojana.

The big problem is the mismatch of electricity usage in the day and night time. About 75 per cent of Kerala’s consumers are domestic and the use of electricity peaks by 11 pm when there is no solar power generation.

Consumers store daytime solar energy into the grid and pull it back at night but the KSEB has no facilities to store the excess solar power generated by the rooftop solar panels, but they should deduct the current bill for the consumer since they have generated and sent it to the grid.

To provide power during the nights, the KSEB buys external power from national exchanges at high rates and provides it to the consumers. Now, KSEB is taking up Bess, reforming net-metering policies for larger systems and introducing time-of-day (ToD) tariffs to encourage daytime power usage.

Due to the immense success and overwhelming response, KSEB is facing challenges and financial losses.

Tamil Nadu, too, does not have enough Bess to fully store the rooftop solar energy. So, the Tamil Nadu Electricity Regulatory Commission has approved a 375 to 1,500 MW grid scale standalone Bess project. Tamil Nadu Green Energy Corporation Limited is setting up the high-capacity battery units in Coimbatore, Tiruchy, Madurai and Tirunelveli, while a 200 MW Bess unit is coming up in North Chennai Thermal Power Station. Tamil Nadu is also finalising a comprehensive Bess policy to regulate grid connectivity and battery recycling.

Breakdown of Cost of Installing Solar Rooftop

Chennai:The private solar companies approximately put the cost of setting up a solar panel at Rs. 55,000 to Rs. 85,000 per kW. With the state and Central governments giving subsidies, the cost of installation of rooftop solar panels for houses comes down significantly. The cost of installation depends on the system capacity and choice of components.

After getting the subsidies, the installation of a 1kW system costs Rs. 30,000 to Rs. 40,000, while it was Rs. 60,000 to Rs. 70,000 earlier, before the subsidies. For a 2kW system, which is appropriate for a single bedroom house, the consumer should spend Rs. 60,000 to Rs. 80,000 from his pocket. For houses with two to three bedrooms with more than one air-conditioner, the companies suggest the installation of a 3kW system by spending Rs. 65,000 to Rs. 1,20,000 since the Central subsidy comes to Rs. 78,000.

Large homes with heavy loads need a 5kW system and they should spend up to Rs. 1.42 lakh to Rs. 2.72 lakh since the Central subsidy has a ceiling of Rs. 78,000 and the subsidy will not increase for a 5kW system.

About 45 to 50 per cent of the expenses are for the solar modules, while the solar inverter takes up 20 to 25 per cent of the expenses. Other expenses include mounting structures and cables, besides discom approvals and net metering.

A standard 3kW system generates about 360 to 400 units, nearly wiping out the entire electricity bills every month. The panels have a 25-year warranty ensuring that the consumer starts enjoying free current after about 3 to 6 years based on the system installed.