A Bright Beginning: Why Solar Is a Game-Changer for MSMEs
As an MSME founder, you’re no stranger to rising utility bills, especially electricity. Imagine trimming that cost while also building sustainability into your business. That’s where solar comes in, and the government is backing you strongly this year. With the right support, shifting to solar can be more than a feel-good green move; it becomes a smart financial decision.
Government Solar Support for MSMEs in 2025: What’s Available
Here’s a curated look at the key solar subsidy and financing options that MSMEs in India can tap into now:
1. Capital Investment Support for Solar Projects
Under the “Investment Promotion Scheme (IPS)”, available for Daman & Diu and Dadra & Nagar Haveli, MSMEs can access capital support for setting up renewable energy projects, classified as a state-level scheme. It offers capital support to enterprises investing in solar power generation assets.
This directly reduces the burden of upfront costs and makes it easier for small or medium units to consider owning solar capacity.
2. State-Level Solar Yojanas: Uttarakhand’s MSSY
Uttarakhand’s Mukhyamantri Saur Swarojgar Yojana (MSSY) is especially relevant. MSMEs and aspiring entrepreneurs can set up solar plants in the 20–200 kW range with a subsidy of up to 50% of the plant cost, depending on location, plus favorable PPA arrangements.
This model encourages self-employment while strengthening clean capacity.
3. Accelerated Depreciation & Tax Incentives
Beyond direct subsidies, MSMEs can benefit from tax incentives like accelerated depreciation. According to solar-finance platforms, businesses may claim a 40% depreciation benefit in the first year on solar assets, improving ROI and reducing tax burden.
4. Grid-Connected Rooftop Solar Programme (MNRE)
The Ministry of New and Renewable Energy (MNRE) runs a Grid-Connected Rooftop Solar Programme whose Phase II is extended until March 2026.
Though the scheme primarily targets residential consumers, many MSMEs (especially small commercial units) could engage through similar mechanisms or cross-leverage connections because of shared infrastructure.
Spotlight: Real-World Impact & Uptake
In Uttarakhand, the MSSY scheme has begun to pick up pace. Local MSME owners are installing small solar plants, handing back energy to the grid, and building a self-sustaining electricity business under a 25-year PPA.
What MSMEs Should Watch for When Considering Solar
- Eligibility matters: Not all MSMEs will qualify for every scheme. For IPS assistance, your business has to satisfy certain registration and capacity criteria.
- Documentation is key: Be ready with financial statements, project reports, and bank-loan papers.
- Choose registered vendors: Especially for MNRE-linked, installers and suppliers should be certified.
- Net metering: If you’re feeding power into the grid, check your local DISCOM’s net-metering norms; it drastically affects payback.
- Long-term planning: Solar investments are capital-heavy upfront but pay off over the years. Pair subsidy leverages with sustainable business goals.
📝Note: Subsidy impact varies based on the scheme, state policies, and project size. MSMEs are advised to check with state renewable energy departments or certified vendors to determine the effective capital reduction for their solar setup.
How IRIS MSME Can Help You Navigate This Transition
At IRIS MSME, our goal is to help you unlock the full potential of government schemes. Here’s how our platform supports you in going solar:
- Our schemes-match tool identifies which solar incentives you are eligible for — whether it’s IPS or state-level subsidies — saving you time and effort.
- With IRIS, you save on paperwork and increase transparency, which is often very helpful when applying for subsidy-linked loans.
The Big Picture: Why It’s Worth It
Switching to solar with government support isn’t just about reducing electricity bills; it’s about future-proofing. As energy costs rise and sustainability becomes a non-negotiable part of business, investing in solar infrastructure now lets your MSME handle future energy needs while supporting its shift toward sustainable practices.
For MSMEs, adopting solar isn’t only about lowering exposure to rising power costs; it also adds a steady, long-term energy advantage to their operations.
⚡ Your Next Step
- Log in (or sign up) on IRIS Peridot to explore which solar incentive programs match your profile.
- Run a quick feasibility check with a trusted solar vendor (preferably MNRE-approved).
- Apply for eligible schemes like the IPS solar sub-scheme using the documentation IRIS helps you prepare.
- Use the IRIS Peridot dashboard to monitor GST, invoice submissions, and credit history so your applications are more complete and well-documented.
[Get Started Today] — turn your entrepreneurial energy into renewable power for growth.
Further Reading:
- Check IRIS MSME’s guide on ” MSME Loans in India 2025 – Key Schemes, Trends, and Tips “ to understand financing options and how MSMEs can access government-backed loans effectively.
- To explore important government schemes supporting MSME growth and technology upgrades, check ” Top 5 Government Schemes Every MSME Should Know “