PM Surya Ghar Subsidy Explained (2026)
Updated September 2026 • 7 min read • Sources: MNRE, state SERC tariff orders, NIWE
India has the most generous residential solar subsidy of any market this calculator covers — and also the one most commonly misquoted. PM Surya Ghar: Muft Bijli Yojana pays Central Financial Assistance directly into your bank account, but it is tiered, capped, and stops mattering above 3 kW.
1. How the CFA is actually calculated
The subsidy is paid per kilowatt, in declining tiers, with a hard ceiling:
| System size | Rate | Total CFA |
|---|---|---|
| First 2 kW | ₹30,000 per kW | ₹60,000 |
| 3rd kW | ₹18,000 per kW | ₹78,000 |
| 4 kW and above | Nothing further | ₹78,000 (capped) |
The practical consequence is significant: a 3 kW system receives ₹26,000 per kW of assistance, while a 9 kW system receives about ₹8,667 per kW. The subsidy does not scale with your roof. If you are sizing for a large household or an EV, budget on the basis that everything past the third kilowatt is funded entirely by you.
2. Net metering is the quiet half of the return
Unlike the UK or Australia, most Indian states credit exported generation at the retail slab tariff under state net-metering regulations, with annual settlement of unused credit. A unit you export is worth roughly what a unit you consume is worth. That makes Indian payback far less sensitive to when you use electricity, and it is why Indian systems recover cost faster than British ones despite a much lower tariff.
Slab structure matters though. Residential tariffs are progressive, so solar displaces your highest slab first. Households consuming heavily see a better effective rate than the state average below suggests.
3. What that means by region
Tariffs are set by state DISCOMs and vary widely; irradiance is strong almost everywhere. An 8 kW system on our current dataset:
| Region | Tariff | Sun hrs/day | Net cost (8 kW) | Payback |
|---|---|---|---|---|
| East & North-East (WB, BR, OD, AS) | ₹7.60/kWh | 4.8 | ₹4,18,000 | 4.8 yrs |
| Maharashtra & Goa | ₹9.40/kWh | 5.1 | ₹4,18,000 | 3.7 yrs |
| North & West (DL, RJ, GJ, HR) | ₹7.10/kWh | 5.6 | ₹4,18,000 | 4.4 yrs |
| South (KA, TN, TS, AP, KL) | ₹8.20/kWh | 5.3 | ₹4,18,000 | 4 yrs |
Modeled at 8 kW, optimal shading, ₹62/W installed, flat tariff baseline. Figures come from the same dataset the calculator uses.
Maharashtra pays back fastest not because it has the best sunlight — it does not — but because MSEDCL residential tariffs are the highest in this set. Tariff beats irradiance in almost every market.
4. Practical notes before you commit
- Use an empanelled vendor. CFA is only payable on installations by vendors registered on the National Portal, using approved ALMM-listed modules.
- Apply before installing. The subsidy flows through the portal with a feasibility approval step; retro-fitting an application to an existing system generally fails.
- Check for a state top-up. Several states add their own subsidy above the central CFA. Our model deliberately excludes these, so your real net cost may be lower.
- Factor in soiling. Dust accumulation is a real and under-modelled loss in much of India; budget for periodic cleaning.
Model your own payback in rupees
Switch the calculator to India to apply the CFA tiers to your exact system size against your state's DISCOM tariff.
Open the India calculator →