Solar Panel Installation Business in India (2026): Vendor Registration, ALMM, Net Metering, GST and a Worked ₹ Plan

Rooftop solar has become one of the steadiest small-business opportunities in India. PM Surya Ghar pays households a fixed subsidy per kW, factories and shops want to cut daytime power bills, and every installed system needs five years of maintenance. This guide is for electricians, electrical contractors, engineering graduates and existing electrical shops who want to start a solar panel installation business. It covers the licence you need for the electrical work, PM Surya Ghar vendor registration and bank guarantees, the ALMM and made-in-India module rules (including the 31 December 2026 deadline), net metering, the installer's GST position, and a worked rupee plan with the working capital most guides forget.

Quick answer

To install rooftop solar as a business you need a state electrical contractor licence, GST registration and — to sell subsidised home systems — registration as a PM Surya Ghar vendor with your state's nodal DISCOM (₹2.5 lakh bank guarantee) or with REC Limited nationally. Subsidised systems must use made-in-India (DCR) modules, and you owe the customer 5 years of free maintenance.

• Net-metered systems commissioned after 31 December 2026 must use modules made with ALMM List-II cells

• Supply-and-install contracts: 70% at 5% + 30% at 18% — about 8.9% effective

• Systems up to 10 kW are deemed technically feasible for grid connection

• Budget ₹8–12 lakh fixed costs plus ₹20–30 lakh working capital (MSMETOOLS estimate)

Is solar installation a good business in India?

The demand side is unusually well supported. PM Surya Ghar: Muft Bijli Yojana pays households central financial assistance of ₹30,000 per kW for each of the first 2 kW and ₹18,000 per kW for the third — up to ₹78,000 — and the scheme runs until 31 March 2027. Several states add their own top-ups. Commercial and industrial customers, who get no central subsidy, still install because a rooftop plant typically pays back in a few years against high business tariffs, and because solar equipment carries only 5% GST after GST 2.0. Our solar panel subsidy guide explains the customer side in detail.

The supply side is just as important to understand. PM Surya Ghar dropped the old system of DISCOM tenders that fixed installer prices; consumers now choose any registered vendor on the national portal and agree prices directly. That means open competition — the portal shows vendor profiles, prices and ratings — and it rewards local installers who answer enquiries fast, finish on time and get systems through DISCOM inspection without rework.

The risks are mostly about cash and quality. You pay module and inverter distributors before the customer pays in full; subsidised customers often hold back the last instalment until the subsidy arrives. Module prices and the made-in-India rules change often. And because vendors carry a five-year free maintenance obligation and a rating that customers see, a few bad installations can damage the business for years.

Licences and registrations you need

Electrical contractor licence. A rooftop solar plant is an electrical installation connected to the consumer's supply. Regulation 31 of the Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2023 says no electrical installation work may be carried out on a consumer's premises except by an electrical contractor licensed by the state government, under the direct supervision of a person holding a certificate of competency, and by workers holding a permit issued or recognised by the state. Work done in breach of this can't be energised or connected to the supplier's network. Apply to your state's electrical inspectorate or licensing board; the licence class you need depends on voltage and capacity, and many states issue separate classes for low-tension and high-tension work.

Business registrations. You will need a PAN and a current account in the firm's name, GST registration (installation is a taxable supply and you will want input tax credit on equipment), and free Udyam registration. The MNRE vendor declaration also asks for a provident fund number where applicable, and a shop and establishment registration usually applies to your office.

Skills. Most successful small installers start as electricians, ITI-trained wiremen or electrical contractors who add solar, because the hard part of a rooftop job is the electrical side — DC string design, earthing, surge protection, inverter configuration and safe connection to the consumer's board — rather than bolting panels to a frame. If you come from sales or finance, partner with someone who holds the competency certificate and has installed systems before, and send technicians on manufacturer and MNRE-linked training courses.

PM Surya Ghar vendor registration. The scheme is implemented only through vendors registered on the national portal. Under the scheme guidelines you can register at state level with the state's nodal DISCOM or agency — in states with several DISCOMs, one is nominated to register vendors for all — or with the National Programme Implementation Agency (REC Limited) for national or multi-state registration. MNRE's simplified procedure asks for a declaration and a performance bank guarantee of ₹2.5 lakh, valid for at least five years; national registration was reported in 2024 to need a ₹25 lakh guarantee. Vendors already empanelled under the earlier rooftop programme (Phase II) were carried over.

Getting registered as a rooftop solar vendor

1. 1

   Firm, PAN, GST and bank account

   Set up the firm (proprietorship, partnership, LLP or company), take GST registration and open a current account.

2. 2

   Electrical contractor licence

   Apply to the state electrical licensing board with the certificate-of-competency holder who will supervise your sites.

   Tip: Without this, your systems can't legally be energised — and DISCOM inspectors check.

3. 3

   Trained team

   MNRE's vendor declaration asks you to confirm at least three technical staff trained in rooftop solar installation.

4. 4

   Apply to the nodal DISCOM or REC

   Submit the declaration and the bank guarantee to your state's nodal DISCOM or agency (or REC for national registration).

5. 5

   Set up your portal profile

   Once listed, log in to the national portal with the PAN and mobile number used for registration, and publish your system prices, service areas and contacts.

   PM Surya Ghar portal

The declaration format in MNRE's 2022 office memorandum commits the firm to install systems that meet MNRE's minimum technical specifications, give comprehensive maintenance for at least five years, tell customers whom to call with complaints, and accept blacklisting and encashment of the bank guarantee if it misleads anyone. The PM Surya Ghar guidelines add that registering authorities may de-register vendors or impose penalties after inspecting poor installations.

ALMM, DCR and the 31 December 2026 deadline

The rules on which panels you may use are the part of this business that changes most often, so check MNRE's ALMM page before every large purchase.

ALMM List-I (modules). The Approved List of Models and Manufacturers lists solar module models whose factories MNRE has inspected. Net-metering and open-access projects have to use List-I modules.

ALMM List-II (cells). List-II names approved solar cell makers. Under MNRE's office memorandum of 9 December 2024, reiterated in July 2025, net-metering and open-access projects commissioned on or after 1 June 2026 had to use List-I modules made with List-II cells. MNRE refused a blanket extension, but on 18 July 2026 it opened a limited window: net-metering and open-access projects can commission with an exemption from List-II until 31 December 2026. Projects commissioned after that must comply. MNRE keeps revising List-II — the 12th revision is dated 8 October 2026 — as more cell factories are added.

DCR for subsidised homes. PM Surya Ghar already requires the stricter Domestic Content Requirement: modules made in India from Indian-made cells. Using a non-DCR module anywhere in a subsidised system makes the whole installation ineligible for the subsidy. Households that opt out of the subsidy through the portal's Give It Up option aren't bound by DCR, though the ALMM rules for net metering still apply to them.

Module and cell rules that affect installers

29 Feb 2024

PM Surya Ghar approved; DCR modules compulsory for subsidised homes

9 Dec 2024

MNRE creates ALMM List-II for solar cells, effective 1 June 2026

1 Jun 2026

List-II applies to net-metering and open-access projects (no blanket extension)

18 Jul 2026

MNRE allows net-metering projects to commission without List-II cells until 31 Dec 2026

1 Jan 2027

Net-metered systems must use List-II cells; PM Surya Ghar runs to 31 Mar 2027

In practice: price your quotes on modules that will still be compliant on the day the DISCOM commissions the system, not the day you sign. A system signed in November 2026 that the DISCOM doesn't commission until January 2027 will be judged under the stricter rule. Keep module datasheets, ALMM and DCR certificates and serial-number lists in each customer file.

Net metering and the DISCOM process

Most rooftop customers are on net metering, so your job doesn't end at the roof. Under the Electricity (Rights of Consumers) Rules, 2020, as amended, applications for rooftop systems up to 10 kW are deemed accepted without a separate technical feasibility approval, though some DISCOMs still run their own process. The DISCOM fits a bi-directional meter (a smart meter in many areas), or lets the consumer buy one from an enlisted meter vendor, signs the net-metering agreement and inspects the system before commissioning. The state electricity regulator decides the details — net metering, net billing, gross metering, group and virtual net metering — so learn your state's regulations.

A subsidised home installation, end to end

Step 1

Consumer applies on portal

Step 2

You survey, quote and sign the agreement

Step 3

Install DCR system

Step 4

Upload details and photos

Step 5

Net meter + DISCOM inspection

your rework risk

Step 6

Subsidy to consumer

≈ 15 days after approval

State differences matter. Each state's electricity regulator sets its own net-metering regulations, and each DISCOM runs its own application and inspection workflow, so an installer working across a state border effectively learns two systems. Some states settle surplus exports at a low average power purchase cost at the end of the year, which makes oversized home systems a poor deal; others allow banking across months or offer group and virtual net metering for housing societies. Commercial consumers in some states face caps linked to sanctioned load or transformer capacity. Before you quote outside your home district, download the state regulation, read the DISCOM's rooftop page and ask an established installer how long net meters actually take there. Building realistic timelines into your payment schedule is far easier than explaining a three-month delay to a customer who has already paid.

The guidelines say the subsidy is processed within 15 days of DISCOM approval, but the slow steps are usually net-meter supply and inspection. Inspections fail most often on earthing, cable sizing and routing, missing surge protection, wrong module make or serial numbers versus the application, and poor structure anchoring. An installer who learns the local DISCOM inspectors' checklist and gets systems passed first time wins referrals.

GST for a solar installer

You will charge GST on almost every job, so build it into your quotes correctly. Our GST on solar panels guide covers the rates in depth; the essentials for an installer are below.

Supply-and-install contracts. When you supply solar equipment together with installation, the rate notification deems 70% of the gross price to be goods at 5% and the remaining 30% to be services at 18%. On a ₹1,90,000 home system that is ₹1,33,000 at 5% (₹6,650) plus ₹57,000 at 18% (₹10,260): ₹16,910 of GST, about 8.9%. You can't renegotiate the split — it applies whenever goods and services are supplied together.

Separate services. Installation-only jobs (customer bought the kit), annual maintenance contracts after the free period, panel cleaning and civil work are taxed at 18%.

Your purchases. Modules and inverters bought as parts of solar power systems generally carry 5%; cables, MCBs, earthing material and structures are usually 18%; batteries sold separately are 18%. Because your output is taxed at an effective 8.9% and your biggest inputs at 5%, credit rarely piles up, but keep purchase invoices tidy — each must show your GSTIN for the credit to flow. If you also sell to businesses, they can claim the GST on your invoice as input tax credit where the plant is used for their taxable supplies.

Check the GST on a quote

Sales (Add GST)Purchase (Remove GST)Price Comparison

AmountGST Rate

0%3% (Gold / silver)5%18% (Standard)40% (Sin / luxury)

Transaction Type

Intra-state (CGST + SGST)Inter-state (IGST)

Base Amount (Before GST)₹57,000.00

CGST (9%)₹5,130.00

SGST (9%)₹5,130.00

Total GST (18%)₹10,260.00

Total Amount (Including GST)₹67,260.00

Open the full GST Calculator (PDF, save, compare)

Worked ₹ plan: a small rooftop installer

Here is a first-year plan for a two-partner installer in a tier-2 city, registered at state level, doing mostly 3 kW home systems with a few small commercial jobs. All figures are MSMETOOLS estimates based on typical 2026 market prices for DCR modules, inverters, structures, wages and vehicles; they are not official figures.

The margin looks thin on paper because most of the contract value passes straight through to module and inverter suppliers. The real constraint is working capital: if you pay distributors 50% in advance and customers pay 70% before installation and 30% after commissioning, you may have ₹20–30 lakh tied up at any time. Negotiate credit with one distributor, ask customers for a meaningful advance, and use the portal's loan option where customers want it. A Mudra loan (up to ₹20 lakh across categories) or a CGTMSE-backed cash credit limit can bridge the gap. Run your own numbers in the break-even calculator, and send professional quotes with the quotation generator.

Winning customers and keeping a good rating

Speed and transparency. Households compare several vendors on the portal. Reply to enquiries the same day, do a proper shadow survey, and give a written quote that names the module make and model, DCR status, inverter, structure height and material, warranty terms and payment schedule. Use MNRE's model vendor–consumer agreement as your base.

Size honestly. Size systems on the customer's actual consumption and roof area, not on the maximum subsidy. An oversized system that exports most of its power at a low settlement rate disappoints customers and earns poor ratings.

Commercial and industrial work. Shops, schools, hospitals and small factories need larger systems with no central subsidy, so price and payback matter more than paperwork. These jobs usually need load-sanction checks, sometimes a transformer study, and approval from the electrical inspectorate above certain capacities. Margins per kW are lower, but ticket sizes are larger.

After-sales as income. You must maintain subsidised systems free for 5 years, but cleaning contracts, monitoring, battery add-ons and AMCs after that period become recurring revenue. Keep a service register for every site; the portal's vendor rating rewards it.

Common mistakes and how to avoid them

Working without the right licence. A system installed without a licensed contractor and competent supervisor can be refused connection, and an accident without them is a serious liability.

Buying modules that won't be compliant at commissioning. With the ALMM List-II window closing on 31 December 2026, stock bought for net-metered jobs that slip into 2027 may become unusable for those jobs. Match purchase timing to commissioning dates.

Mismatched paperwork. Module serial numbers, makes and capacities on the portal must match what's on the roof. Mismatches are a leading cause of inspection failure and subsidy delay.

Underpricing to win leads. Quoting below cost to climb the portal list leaves no margin for five years of free maintenance. Price the CMC into every system.

Ignoring safety. Use harnesses on sloping and high roofs, isolate DC strings properly, and train every technician. A fall or electrocution can end a small business.

Before your first paid installation

0/8

• State electrical contractor licence and certificate-of-competency supervisor
• GST registration, current account and Udyam registration
• PM Surya Ghar vendor registration and bank guarantee submitted
• At least three trained technicians and safety gear
• Distributor tie-up for DCR / ALMM-compliant modules and inverters
• Quote format, vendor–consumer agreement and CMC terms ready
• Local DISCOM inspection checklist and net-metering process understood
• Working capital line or distributor credit arranged

Share Print

What to do next

Get your electrical contractor licence sorted first, then apply to your state's nodal DISCOM for vendor registration and arrange the bank guarantee. Read our solar panel subsidy guide so you can explain the scheme to customers, and our GST on solar panels guide before you issue your first invoice. If you want a second line of business, rooftop solar pairs naturally with EV charging station installations.

Official links

• PM Surya Ghar national portalVendor login and consumer applications
• PM Surya Ghar guidelines (PDF)Vendor registration, CMC, DCR
• MNRE ALMM pageCurrent List-I and List-II and clarifications
• MNRE OM dated 18 July 2026 (PDF)List-II window to 31 December 2026
• CEA Safety Regulations 2023 (PDF)Regulation 31 — licensed contractors
• Notification 9/2025-CT(Rate) (PDF)Entry 437 — 5% and the 70:30 rule

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How do I register as a PM Surya Ghar vendor?

Register with the nodal DISCOM or state agency for state-level registration, or with REC Limited as the national implementing agency for multi-state work. State registration under MNRE's simplified procedure needs a declaration and a performance bank guarantee of ₹2.5 lakh; national registration was reported at ₹25 lakh. Once listed, you log in to pmsuryaghar.gov.in and publish your prices and contacts.

Is a licence needed to install solar panels in India?

Yes, for the electrical work. The CEA safety regulations of 2023 (regulation 31) allow electrical installation work on a consumer's premises only by an electrical contractor licensed by the state government, supervised by a certificate-of-competency holder and done by permit-holding workers. You also need GST registration, and DISCOM or PM Surya Ghar vendor registration to sell subsidised systems.

What is ALMM List-II and how does it affect installers?

ALMM List-I names approved solar module models; List-II names approved solar cell makers. Net-metering and open-access projects must use List-I modules, and MNRE's 18 July 2026 order lets them commission without List-II cells only until 31 December 2026. After that, rooftop systems on net metering must use modules made with List-II cells. PM Surya Ghar systems already need DCR modules.

What GST does a solar installer charge?

On a supply-and-install contract, 70% of the total price is deemed to be goods at 5% and 30% services at 18%, an effective rate of about 8.9%. Installation, AMC or civil work billed separately is 18%. Modules and solar inverters bought by the installer carry 5%.

How much profit does a solar installer make per kW?

Our estimate for a small residential installer in 2026 is a gross margin of about 12–18% of the contract price — roughly ₹7,000–11,000 per kW on a ₹60,000–65,000 per kW home system — before salaries, vehicles, marketing and five years of free maintenance. Net profit depends on volume: an installer doing 400–500 kW a year can clear around ₹10–12 lakh.

How much money is needed to start a solar installation business?

Plan for about ₹8–12 lakh in fixed costs — bank guarantee margin, tools and testing instruments, a vehicle, a small office and licences — plus ₹20–30 lakh of working capital to buy modules and inverters before customers pay in full. That is an MSMETOOLS estimate; a Mudra or CGTMSE-backed loan can fund part of it.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 11 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Guidelines for PM-Surya Ghar: Muft Bijli Yojana — CFA to residential consumers (amended, July 2025) — Ministry of New and Renewable Energy · accessed 11 October 2026
2. 2.MNRE OM No. 318/6/2022-GCRT — simplification of procedure (vendor registration with DISCOM) — MNRE (hosted by MSEDCL) · accessed 11 October 2026
3. 3.MNRE OM No. 283/53/2026-GRID SOLAR dated 18 July 2026 — ALMM List-II limited window — Ministry of New and Renewable Energy · accessed 11 October 2026
4. 4.Approved List of Models and Manufacturers (ALMM) — MNRE page — Ministry of New and Renewable Energy · accessed 11 October 2026
5. 5.Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2023 — Central Electricity Authority (hosted by KSEB) · accessed 11 October 2026
6. 6.Notification No. 9/2025-Central Tax (Rate) — Ministry of Finance (Gazette of India) · accessed 11 October 2026
7. 7.Vendors required to provide ₹25 lakh bank guarantee for national registration in PM Surya Ghar scheme — Energetica India (secondary) · accessed 11 October 2026
8. 8.PM Surya Ghar: Muft Bijli Yojana national portal — Ministry of New and Renewable Energy · accessed 11 October 2026