GST Reform to Create 5–7 Lakh Jobs in Renewable Energy Sector

In a major boost to India’s clean energy goals, the GST Council, in its 56th meeting on September 3, 2025, approved significant reforms that are set to create 5–7 lakh jobs in the renewable energy sector over the next decade. The reduction in GST from 12 percent to 5 percent on renewable energy modules and components will lower equipment costs by 3–4 percent, making domestically manufactured solar and clean energy equipment more competitive under the Make in India and Aatmanirbhar Bharat initiatives. 

With India targeting 100 GW of solar manufacturing capacity by 2030, the reform is expected to spur large-scale investment in domestic manufacturing hubs. Every gigawatt (GW) of capacity creates around 5,000 jobs, meaning this reform could directly and indirectly generate lakhs of employment opportunities. 

The reduced GST rates will significantly lower the cost of clean energy projects. For instance, a 500 MW utility-scale solar park could see cost savings of over ₹100 crore, making solar electricity more affordable and boosting tariff competitiveness. This will also ease the financial burden on power distribution companies (DISCOMs), potentially saving ₹2,000–3,000 crore annually in power purchase costs. 

Households and farmers stand to gain as well. Rooftop solar systems will become cheaper by ₹9,000–10,500, while a 5 HP solar pump under the PM-KUSUM scheme will now cost ₹17,500 less, saving farmers ₹1,750 crore on 10 lakh pumps. 

The reform supports decentralized solutions like mini-grids, solar water pumps, and livelihood equipment, empowering rural schools, health centres, and small businesses. 

Set to take effect from September 22, 2025, this landmark GST cut will reduce energy costs, boost investor confidence, and accelerate India's transition to clean energy, while helping avoid 50–70 lakh tonnes of CO₂ emissions annually by 2030.