The recent reduction of Goods and Services Tax (GST) on renewable energy equipment from 12% to 5% has been welcomed as a big relief for the solar sector, especially for farmers adopting solar pumps under the government’s PM-KUSUM scheme.
Etrica Power, which is actively implementing solar projects in Rajasthan and Gujarat under PM-KUSUM, believes this reform will directly benefit thousands of farmers. “The GST cut makes solar pumps more affordable for farmers, who were already receiving subsidies under the scheme. With this change, their upfront costs will come down further, improving adoption across rural India,” said Aditya Singh Poonia, CEO of Etrica Power.
Under PM-KUSUM, farmers receive financial support to install solar pumps and grid-connected solar plants. With the tax burden now reduced, industry experts estimate that farmers could save an additional 7–10% on overall costs. This not only eases their financial burden but also increases the long-term profitability of farming by lowering dependence on costly diesel or grid electricity.
Aditya Singh Poonia added, “The reform is a win-win. Farmers will save more money, rural solar adoption will accelerate, and India’s renewable energy targets will get a strong push. For states like Rajasthan and Gujarat, where agriculture is heavily dependent on irrigation, the impact will be very significant.”
Experts also highlight that lower costs will encourage faster project completion and attract more participation from small and marginal farmers. Since agriculture is one of the largest energy consumers, the move is expected to reduce carbon emissions and cut subsidy costs for state power distribution companies.
Etrica Power says the GST reform strengthens the government’s clean energy vision and boosts confidence in the renewable energy value chain. With farmers saving money and solar companies expanding faster, the measure is likely to bring long-term growth to both agriculture and clean energy in India.
0 Comments