Different incentives, different maths
The residential subsidy does not apply to commercial or industrial connections. What replaces it is a tax instrument: accelerated depreciation. Under Section 32 of the Income Tax Act, solar assets attract 40% depreciation in year one, with the balance written down over following years on the written-down-value method.
For a profitable business, that front-loaded deduction is worth real money in the first year — which is why commercial solar is usually evaluated on post-tax cash flow rather than on a simple savings figure.
The date most buyers miss
- Commission on or before 30 September and you claim the full 40% in year one
- Commission on or after 1 October and the half-year rule cuts it to 20%
- The remainder is not lost — it moves into later years, but the year-one benefit halves
A project that slips from late September to early October does not become a bad project. It does become a materially different one in the year you sign for it, and that is worth building into the installation schedule rather than discovering afterwards.
How GST actually lands
Solar equipment attracts a concessional 5% GST rate. For most rooftop installations, however, input tax credit is restricted under Section 17(5) of the CGST Act, because the system is treated as immovable property. The practical effect is that the GST you pay is not recovered as credit — it sits inside the capitalised cost of the asset, and is therefore depreciated along with everything else.
That is not a disaster, but it changes the arithmetic, and a proposal that assumes you will recover the GST as credit is overstating your return.
The tariff you are actually displacing
The value of every unit you generate is the unit you no longer buy. For HT industrial consumers in Gujarat, GERC-regulated energy charges have held in the region of ₹4.30 per unit in recent years, while effective landed cost per unit — once demand charges, duties and other components are included — runs considerably higher.
This is why the only honest starting point for a commercial proposal is your own bill. Category, voltage level, load factor and power factor vary enough between two businesses on the same road that a generic per-unit saving figure is close to meaningless.
When rooftop stops being the answer
Rooftop solar is limited by roof. Once a plant's consumption outgrows what its roof can carry, the next step is usually open access — procuring power from an off-site solar plant and wheeling it through the grid. In Gujarat this becomes available for larger consumers under GERC regulations, and it comes with its own cost stack: wheeling charges, cross-subsidy surcharge and banking charges.
Open access is a genuinely different commercial structure, not a bigger rooftop. Many industrial users end up with both — rooftop for the base, open access for the rest.
On payback figures
Payback periods in the range of three to five years are commonly cited for commercial rooftop solar in India, and for a well-sited plant with high daytime consumption that is a reasonable expectation. It is an expectation, not a promise: it depends on your tariff, your generation, your tax position and how much of the output you consume yourself rather than export.
Tax treatment and regulated tariffs change, and depreciation benefits depend on your own tax position. Treat this as orientation and take advice on your specific circumstances.