GST Cut to 5% Promises ₹1.5 Lakh Crore Savings for Renewable Energy Investors—Pralhad Joshi
India’s landmark GST cut on renewables is expected to unlock up to ₹1.5 lakh crore for investors by 2030, slashing project costs for solar, wind, and green equipment while turbocharging India’s 500 GW clean energy drive. Union Minister Pralhad Joshi announces that reducing GST on renewable equipment from 18% to 5% will enable massive investment and cost savings in India’s green sector. The policy is expected to benefit both industry and consumers, making rooftop solar, solar pumps, and utility green power cheaper.
GST Council Slashes Renewable Energy Tax to 5%, Unlocking Massive Investment Potential
In a broad pro-investment move, India’s GST Council has reduced the duty rate on renewable energy supplies from 18% to 5%, with New and Renewable Energy Minister Pralhad Joshi estimating this will unleash ₹1–1.5 lakh crore for investors by 2030.
The new rate covers solar panels, wind turbines, batteries, and allied technologies — significantly lowering capital costs for new green projects.
Key impacts include:
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Rooftop solar costs dropping by up to ₹10,500 per typical 3 kW system.
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PM-KUSUM solar pumps saving farmers a cumulative ₹1,750 crore.
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Major developers already announcing price reductions, making rooftop and utility-scale solar more accessible to homes and businesses.
With a target to add 300 GW of clean power by 2030, even a modest 2–3% cost reduction is expected to drive substantial investments and job creation.
Joshi highlighted that India has already surpassed half its 500 GW renewable energy target, reaching 252 GW from non-fossil sources — five years ahead of schedule. Transmission infrastructure for 537 GW is in the pipeline, with recent tenders achieving record low tariffs.
The reform comes alongside an increase in GST on coal to 18%, providing further incentive for rapid decarbonisation and aligning fiscal measures with India’s Paris climate commitments.
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