In a landmark decision, the GST Council has slashed the GST on solar cells, modules, inverters and other renewable energy components from 12% to just 5% (effective 22 September 2025).
This is big news for homeowners, businesses, and industries looking to switch to clean energy — solar just became more affordable, and solar has become more attractive to buyers
🔎 What Changed: Component-Wise GST Table
| Component | GST Before | GST After | Notes |
|---|---|---|---|
| Solar cells/modules | 12% | 5% | Includes standalone cells or assembled modules |
| Solar power generating system (EPC contract, bundled sale) | Goods @12% + Services @ 18% (effective ~13.8%) | Goods @5% + Services @ 18% (effective ~8.9%) | Major drop in “goods” portion burden |
| Solar inverter (sold as part of system) | 12% | 5% | Lower tax when inverter is bundled with system |
| Solar inverter (standalone purchase) | 18% | 18% | Higher tax if bought separately |
| Solar lanterns / lamps | 12% | 5% | Included in renewable-energy rationalization |
💵 Estimated Impact on Solar System Costs
Here’s how the new GST rates translate into real-world system costs.
| System Size | Before GST Cut | After GST Cut | Savings |
|---|---|---|---|
| 5 kW residential | ₹2,50,000 | ₹2,35,000 | ~₹15,000 |
| 10 kW residential / small business | ₹4,80,000 | ₹4,50,000 | ~₹30,000 |
| 50 kW commercial | ₹22,50,000 | ₹21,25,000 | ~₹1,25,000 |
| 200 kW industrial/warehouse | ₹84,00,000 | ₹80,00,000 | ~₹4,00,000 |
🚀 What This Means for You
With system costs falling by 2–4% overall, rooftop solar is now an even more attractive investment. For businesses and industries, the savings quickly run into lakhs of rupees, improving payback periods and ROI.
👉 Considering solar? Now is the best time to explore your savings. Book a free site survey with Solarsphere today at www.solarsphere.in. Comment “SURVEY” with your phone number and we will reach out to you right away
Sources: PV magazine India, The Financial Express
