New Delhi, Sept 23: Union Minister for New and Renewable Energy, Pralhad Joshi, announced that the recent reduction in Goods and Services Tax (GST) on renewable energy equipment from 18% to 5% could save investors between ₹1 lakh crore and ₹1.5 lakh crore by 2030. This move is aimed at supporting India’s goal of reaching 500 GW of renewable energy capacity by the end of the decade.The GST cut, effective from September 22, 2025, is expected to lower the cost of renewable energy projects. For example, a typical 3 kW rooftop solar system may become ₹9,000–₹10,500 cheaper, making solar energy more accessible to consumers and farmers under schemes like PM Surya Ghar and PM-KUSUM.
Minister Joshi thanked Prime Minister Narendra Modi for implementing the tax reduction during the Navratri festival. He noted that the change would boost investor confidence and help India add around 248 GW of renewable energy capacity over the next five years.
The Ministry of New and Renewable Energy estimates that the GST reduction will save ₹1,750 crore on 10 lakh solar pumps under the PM-KUSUM scheme. The move is also expected to make large-scale solar projects more affordable, accelerating the country’s transition to clean energy.
This tax reform is considered a key step in supporting sustainable development and energy independence in India, while attracting investments and fostering growth in the renewable energy sector.