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Has center decided to withdraw subsidy on Residential Rooftop Projects from 31.08.2021 ?

AS per the news shared by Times of India (Jaipur Edition) dated 12.08.2021, "The Centre has decided to withdraw the subsidy given to the rooftop solar projects with capacity up to 10 kilowatt from August 31. As per the existing norms, the Centre provides 40% subsidy to projects having 3kw and 20% from above 3kw to 10 kw." Hence, Mr. Subodh Agarwal (MD- RRECL) appealed people to take advantage and put up the plants before the expiry of the subsidies.


This news created a chaos in the market that this may be the last chance to avail the subsidy and after 31.08.2021 there might be no subsidy available in future ? REAR being the renewable energy association in Rajasthan started receiving calls from consumers confirming the news. The same news is getting shared in the social media and people are getting confused. We at REAR Renewable Energy Association, being the responsible industry body take the responsibility to clarify the issue.

  • The news was purely related to Rajasthan and MD (RRECL) given his views in ToI.

  • The information was related to Rooftop Solar Subsidy Scheme of Rajasthan for the capacity allocated by MNRE under RTS phase-II for Year 2019-20. The total allocated capacity was 45 MW for which the tender was released in Oct 2019 and the vendor empanelment completed in June 2020.

  • The scheme time line was 9 months and hence, it was supposed to end in March 2021 However due to Covid, it was extended to June 2021 and once again due to Second wave of Covid, it further get extended to 31.08.2021 ( Application for Subsidy) & project completion timeline is 15 Sep 2021.

From the above sequence of events, we like to clarify that it is the Subsidy Scheme of 2019-20, which was under implementation in Rajasthan. For 2020-21, there's no allotment for Rajasthan as the previous scheme is already under implementation.


The Central Govt or MNRE is not going to withdraw subsidy or Central Financial Assistance (CFA) after 31.08.2021 under the RTS Phase-II and the scheme will continue in all states in India.


The message shared by MD, RRECL that "the Centre has decided to withdraw the subsidy given to the rooftop project up to 10 KW" is not correct Since MNRE is allocating the capacity to Discoms from all States/UTs every year ( 510 MW was allocated in Year 2019-20 and 2096 MW was allocated in Year 2020-21). The clarify more we would like get to the notice of all readers that MNRE issued a draft specification for RTS Phase-II on 06.08.2021 and asked for comments from stakeholders till 16.08.2021.


However, the Ongoing Subsidy Scheme in Rajasthan will have last date to file DPR as 31.08.2021.


About RTS Phase-II:-

Phase II of the Grid connected rooftop solar Programme was approved for with a target for achieving a cumulative capacity of 40,000 MW from Rooftop Solar (RTS) Projects by the year 2022 in February 2019. Operational guidelines were issued on 20th August, 2019.

Under the Phase II of the Grid connected rooftop solar programme Central Financial Assistance (CFA) up-to 40% of the benchmark cost is provided for RTS projects up to 3 kW capacity and 20% for RTS system capacity beyond 3 kW and up to 10 kW in residential sectors. For Group Housing Societies/Residential Welfare Associations (GHS/RWA), CFA is limited to 20% for RTS plants for supply of power to common facilities maximum upto 500 kW capacity. The programme is being implemented through power distribution companies (DISCOMs)/Electricity Department of States and UTs.


The Phase II of the programme has provision of incentives to DISCOMs. As per scheme, DISCOMs will get the incentive for addition of capacity achieving in the  nancial year above the baseline capacity as on 31st March of the previous year. No incentives for capacity addition up to 10% of base capacity 5% incentives for addition beyond 10% and up to 15% of base capacity and 10% incentives for addition beyond 15% of base capacity.The Phase II of the programme has provision of incentives to DISCOMs. As per scheme, DISCOMs will

get the incentive for addition of capacity achieving in the  nancial year above the baseline capacity as on 31st March of the previous year. No incentives for capacity addition up to 10% of base capacity 5% incentives for addition beyond 10% and up to 15% of base capacity and 10% incentives for addition beyond 15% of base capacity.