India’s GST Cut on Renewables Starts Journey to Rs 1.5 Lakh Crore Savings By 2030

The recent move by the Government of India (GoI), announced in the 56th GST Council Meeting, to reduce GST will help investors save up to Rs 1.5 lakh crore on renewable energy equipment by 2030, Union Minister for New and Renewable Energy Pralhad Joshi announced on Monday.

Addressing a national conference on energy storage in New Delhi, Joshi said, "Approximately 248GW of non-fossil capacity will be implemented further in the next five years. With this GST cut, savings will stand around INR 1 lakh crore to INR 1.5 lakh crore. So, that will be the biggest ever advantage. This is an estimate."

The New GST Comes into Effect, Spurs Enthusiasm

The revised GST rates, effective from Monday, will significantly reduce costs across the renewable ecosystem. Tax on solar cells, wind turbines, biogas units, and related equipment has been brought down from 12 percent to 5 percent, sparking enthusiasm from both developers and consumers.

Industry Reacts with Price Cuts

The GST cut is already showing an impact in the market. Gurugram-based ReNew Energy announced price reductions in its solar modules and cells the same day. The company highlighted that the change will translate into direct savings of up to INR 10 lakhs per MW for non-DCR (domestic content requirement) modules and as much as INR 15 lakhs per MW for DCR modules in utility-scale projects.

For households, the impact is equally notable. Under the PM Surya Ghar Muft Bijli Yojana, ReNew estimates that a standard 3 kW rooftop solar system will now cost up to INR 5,000 less after the tax cut. Farmers installing 5 HP solar pumps under PM-KUSUM will be able to save up to INR 12,000.

These cost reductions add to the existing matrix of subsidies and low-cost financing. As of September 2025, PM Surya Ghar has powered more than 20 lakh homes nationwide. PM-KUSUM has crossed 10 lakh solar pump installations by April 2025, with record numbers achieved in FY 2024–25. ReNew said the GST relaxation will serve as a powerful accelerator for both schemes.

Progress on National Targets

Joshi added that transmission systems are being engineered to accommodate about 537 GW of renewable energy capacity by 2030, positioning India as a global leader in green power deployment.

Push for Domestic Manufacturing

Joshi emphasized the government’s commitment to self-reliance in renewable manufacturing. He noted targets to establish domestic solar cell production by 2028. 

“We are now moving towards a comprehensive indigenous wafers and ingots ecosystem (Swadeshi),” he said.

“I have given my Ministry clear directions to develop a trajectory for domestic polysilicon production, ensuring a completely integrated solar value chain from the ground up. We are also discussing a PLI scheme for advanced chemistry cells, and I have asked officials to prepare an ALMM (Approved List of Models and Manufacturers) for solar inverters,” he added.

Skilling India for Renewables

The minister also highlighted human capital development in the sector. Training programmes such as the Suryamitra Skill Development Programme for solar, Varunmitra for solar water pumps, Vayumitra for wind energy, and Jal-Urjamitra for small hydro are underway to equip youth for clean energy deployment. 

Currently, the renewable energy industry employs more than 13 lakh full-time workers across solar, wind, hydro, and biomass.

Expanding Green Hydrogen and Storage

India is also advancing in green hydrogen technology. “We are supporting domestic manufacturing of electrolysers and components for green hydrogen. Incentives have already been awarded for over 3,000 MW per annum of electrolyser manufacturing and 8.62 MTPA of green hydrogen production,” Joshi said.

He also pointed to India’s achievement in cost reduction through competitive procurement. Madhya Pradesh recently secured India’s lowest-ever tariff for solar-plus-storage projects at just INR 2.70 per unit, a benchmark highlighting the sector’s cost competitiveness.