Government subsidies and schemes for solar adoption in MSMEs (2025 update)
Infra - Energy23 Jun 2025
In 2025, Indian micro, small and medium enterprises (MSMEs) face the dual challenge of managing rising energy costs and aligning with sustainability goals. Solar energy adoption offers a viable solution, and the government has introduced several subsidies and schemes to facilitate this transition.
Key government initiatives for MSMEs
PM Surya Ghar: Muft Bijli Yojana
Launched in February 2024, this scheme aims to empower households and small businesses by providing rooftop solar installations. Beneficiaries can receive subsidies up to ₹78,000 for systems up to 3 kW. Additionally, collateral-free loans up to ₹2 lakh are available at a subsidised interest rate of 6.75%, making solar installations more accessible.
MNRE's grid-connected rooftop solar programme
The Ministry of New and Renewable Energy (MNRE) offers Central Financial Assistance (CFA) for rooftop solar installations. For systems up to 3 kW, a subsidy of 40% is provided, and for systems between 3 kW and 10 kW, a 20% subsidy is available. This programme encourages MSMEs to adopt solar energy by reducing the initial investment burden.
Credit Linked Capital Subsidy Scheme (CLCSS)
This scheme provides financial assistance to MSMEs for technology upgradation, including the adoption of solar energy solutions. By offering a 15% capital subsidy on eligible investments, CLCSS reduces the financial barriers to implementing solar technologies.
Udyam registration benefits
MSMEs registered under the Udyam portal can access various government schemes and subsidies, including those related to solar energy adoption. Registration facilitates easier access to credit, subsidies, and other support mechanisms designed to promote renewable energy usage among small businesses.
State-level initiatives
Several states have introduced their own schemes to promote solar energy adoption among MSMEs:
Maharashtra: Under the 'Mukhyamantri Saur Krushi Vahini Yojana', the state aims to shift 1,600 MW of agricultural feeders to solar power by 2026, supporting MSMEs in the agricultural sector.
Uttarakhand: The Chief Minister's Solar Self-Employment Scheme offers subsidies ranging from 20% to 50% for solar projects between 20 to 200 kW, with additional support for entrepreneurs.
Net metering policies
Net metering allows MSMEs to sell excess solar power back to the grid, providing an additional revenue stream and improving the return on investment for solar installations. While policies vary by state, most have implemented net metering to encourage solar adoption.
Conclusion
The Indian government, through various central and state-level initiatives, is actively promoting solar energy adoption among MSMEs. By leveraging these schemes, MSMEs can reduce operational costs, enhance energy security, and contribute to environmental sustainability. Staying informed about available subsidies and understanding the application processes are crucial steps for MSMEs aiming to transition to solar energy.