Solar in Uttar Pradesh: Potential, Policy and Solar Subsidy (2025)

In 2022, the Uttar Pradesh government introduced an ambitious solar policy with large installation targets and has been actively working to achieve them. In August 2024, Ayodhya was unveiled as a model solar city with a 40 MW solar capacity. The state has also launched a major campaign to solarize 25,000 homes in Varanasi.

With these efforts, Uttar Pradesh is making significant strides in the solar energy sector. Let’s explore the state’s solar potential and understand how investing in a solar power plant can benefit consumers.

Solar Subsidy in UP

As part of the new solar policy, the UP government offers a solar subsidy in addition to the Central Financial Assistance (CFA). The incentive was introduced to promote grid-connected rooftop solar installations in the residential sector.

UPNEDA provides a subsidy of ₹15,000/kW with a maximum limit of ₹30,000/– per consumer. The money is reimbursed after the successful installation of the solar plant.

Apart from this, residential consumers and RWAs can also claim Central Financial Assistance (CFA) of up to ₹78,000 directly from the national portal. This incentive is offered across India under the PM Surya Ghar Yojana.

The details of the solar subsidy available to UP residents are as follows:

Apart from this, Group Housing Societies (GHS) and Resident Welfare Associations (RWA) can also avail a subsidy of Rs. 18,000 per kW for common facilities, including EV charging, up to 500 kW capacity (@3 kW per house).

Uttar Pradesh Solar Energy Policy 2022

Toward the end of 2022, the UP government approved a new solar policy that will be in effect till 2026-27. The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) acts as a nodal agency for implementing it.

Some of the key highlights of the document are as follows:

• The state government plans to establish solar cities, aiming for a minimum 10% reduction in traditional electricity consumption by transitioning to renewable energy sources.
• UPNEDA will create a land bank, with areas that are not suitable for agriculture for the development of solar projects.
• Government buildings, including schools and Anganwadi centres, will be solarized.
• The net metering facility will also be given to residential consumers, government-owned public sector buildings, and all educational institutions.
• The government will promote the development of solar parks
• Solar equipment manufacturing units will receive a ten-year electricity duty exemption, promoting local product growth.

Potential of Solar

Uttar Pradesh experiences more than 300 days of sunshine. This abundant sunlight can easily be transformed into electricity. In fact, studies have shown that the solar potential of the state of around 22.83 GWp.

UP’s current solar capacity is 3.3 GW. However, judging by the initiatives and measures introduced by the UP government in the past 5 years, we can say that the state is on the path to harness its massive solar potential.

The state also recently announced Solar Policy 2022, with the target to generate 22 GW of solar power by 2026-27. Under this policy, UP is developing Ayodhya as a solar city and has approved a 40 MW project in the city.

In a bid to reduce air pollution and offset emissions, the state has also begun integrating solar with the transportation sector. The state has launched solar-powered ferry rides and has unveiled plans to install solar panels on the entire 296km stretch of Bundelkhand Expressway.

In September 2024, the state government announced plans to turn the arid region of Bundelkhand into a clean energy hub. The state has announced 10 new solar power projects with a cumulative capacity of 3 GW in the region.

Additionally, the Uttar Pradesh government approved solar power projects worth approximately Rs 10,000 crore in January 2025.

The government has also stated that it has received investment commitments of ₹2 lakh crore after the launch of its new solar policy.

Supplied by Ornate Solar

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