Government Policies and Subsidies for Renewable Energy in India: What’s New in 2025?

India stands at the forefront of a renewable energy revolution, driven by ambitious government targets and evolving policies. As we move into 2025, understanding the latest updates in government policies, subsidies, and incentives is crucial for businesses, entrepreneurs, and households interested in tapping into the green energy sector. This blog provides a detailed overview of the new and updated government policies, schemes, and subsidies in India’s renewable energy landscape for 2025.

India’s Renewable Energy Vision: 2025 and Beyond

India aims to achieve 500 GW of non-fossil fuel capacity by 2030 and reach net-zero carbon emissions by 2070. To accelerate this journey, the government has launched and updated various policies targeting solar, wind, bioenergy, and emerging technologies like green hydrogen.

Key National Policies and Programs (2025)

1. National Solar Mission (Updated for 2025)

Goal: Increase solar power capacity to 300 GW by 2030.
New Features (2025):
- Enhanced capital subsidies for rooftop solar in residential and SME sectors.
- PM Surya Ghar Muft Bijli Yojana: Launched in 2024, continues in 2025, targeting 1 crore households with up to 300 units of free electricity/month via rooftop solar.
- Streamlined approval and installation processes via the National Portal for Rooftop Solar.

2. Wind Energy Policy (Draft 2025)

New draft released in early 2025 aims to revive stalled wind projects, especially in high-potential states (Tamil Nadu, Gujarat, Maharashtra).
Focus on hybrid projects (wind + solar), new evacuation infrastructure, and repowering old wind turbines.

3. Green Hydrogen Mission

National Green Hydrogen Mission (2023–): Major funding boost in 2025 Budget.
Incentives for domestic manufacturing of electrolysers.
Priority for green hydrogen in industrial sectors (steel, fertilizer, refining).
Export-linked incentives and easier regulatory approvals for green hydrogen projects.

4. Renewable Purchase Obligation (RPO) Enhancement

Mandatory RPO targets increased for states and distribution companies (DISCOMs) to purchase a higher share of renewable energy.
New penalties for non-compliance introduced in 2025.

5. Production Linked Incentive (PLI) Schemes (2025 update)

Extended PLI for solar module and battery manufacturing.
Increased budget for domestic manufacturing of high-efficiency modules, solar cells, and advanced battery storage.

Major Subsidies and Incentives (2025)

1. Rooftop Solar Subsidy (PM Surya Ghar Muft Bijli Yojana)

Central subsidy of up to ₹78,000 for a 3 kW system.
Special additional incentives for women-led households and priority sectors.
Net metering and banking allowed in most states.

2. Capital Subsidy for MSMEs

Up to 30% capital subsidy on solar, wind, and biomass projects for MSMEs.
Priority lending and interest subvention schemes for renewable energy adoption.

3. State-Level Subsidies

Many states (e.g., Gujarat, Maharashtra, Rajasthan, Karnataka) offer additional subsidies for rooftop and ground-mounted projects.
Some states provide 100% exemption on electricity duty and reduced wheeling/transmission charges.

4. GST and Tax Benefits

GST on solar components reduced (update for 2025: 5% on modules, 12% on certain equipment).
Accelerated depreciation (up to 40%) for businesses installing renewable energy systems.
No custom duty on import of select capital goods for RE manufacturing (extended till March 2026).

Recent Announcements & What’s New in 2025

Central government allocates an additional ₹10,000 crore in the Union Budget 2025 for green energy infrastructure.
Launch of a single-window clearance portal for all renewable projects to reduce approval time.
New incentives for battery energy storage systems and hybrid renewable energy parks.
Easier land acquisition norms for renewable energy parks in priority zones.
Continued rollout of the Green Open Access Rules: C&I consumers (>100 kW) can buy green power directly from producers.

How to Apply for Subsidies and Schemes

National Portal for Rooftop Solar: pmsuryaghar.gov.in
State Nodal Agencies: Check your state’s Renewable Energy Development Agency for local incentives.
DISCOMs: Many local power utilities facilitate applications and net metering.

Tip: Keep all documents (Aadhaar, electricity bills, bank details, ownership proof) handy for a smooth application process.

With robust policy support and attractive subsidies in 2025, India’s renewable energy sector is more accessible and lucrative than ever. Whether you’re a homeowner, startup, or large business, now is the perfect time to invest in clean energy and benefit from the latest government initiatives.