Subsidy on Solar Water Heater System
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All governments over the world promote the use of solar energy a step to conservation of natural resources and environment. As capital costs of solar heaters are high and its payback is long the Government world over provides various incentives to promote renewable source of energy. The government of India provides the following incentives.
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Users are however requested to check the latest status on the Government website as the Government policies keep on changing from time to time. The information below is for general information.
Yes, the Government of India provides subsidy to the extent of 30 to 60% to different category of users and States subject to certain benchmarks as per below:
- General category stipulates that for all types of beneficiaries: 30% capital subsidy or loan at 5% interest on 80% of the benchmark cost
- Special category stipulates that for domestic & non commercial categories (not availing accelerated depreciation): 60% capital subsidy or loan at 5% interest on 80% of the benchmark cost
- Special category states for commercial users category (availing accelerated depreciation): 30% capital subsidy or loan at 5% interest on 80% of the benchmark cost
- Benchmark Cost: ETC based systems: Rs. 10,000/ sq. m. & FPC based systems : Rs. 11,000/ sq. m.
- These costs keep on changing from time to time and from place to place.
The system can be installed at net of subsidy by following ways:
- Through State Nodal Agency- Contact respective state nodal agency in your state (list with phone no. given on MNRE website) who will visit the site, provide information on cost, size & other details of system required and get it installed at net of government subsidy through some manufacturers.
- Through Accredited Channel Partners of MNRE (List available at MNRE website)- Contact any of them and get the system directly installed from him at net of subsidy.
- Through State Nodal Agency- In same fashion as above by inviting tenders and placing order to selected manufacturer
- Through DGS&D rates- Details available on DGS&D website
- Through Accredited Channel Partners- In same fashion as above
- Soft loans from Bank & BAFL at low interest.
- 100 % depreciation, tax relief for profit making companies.
- No Sale Tax, Excise & Octroi on SWHS
Does a solar hot water system qualify for a federal tax credit?
YES! Both the Purchase Price and Installation Cost of a solar hot water system qualify for a 30% federal tax credit. The credit applies to equipment placed in service between January 1, 2009 and December 31, 2016. IRS Form # 5695 (Download pdf here) is needed to apply for this credit.