GST Council Cuts Rates on Renewable Energy Devices to 5% from September 22

New Delhi, Thursday, September 4, 2025: The GST Council, in its meeting yesterday, lowered the GST burden on a range of renewable and clean energy products. The new GST rate has been reduced from 12% to 5%, effective September 22.

GST Cut on a Range Of Renewable and Clean Energy Products

At its 56th meeting, the GST Council recommended a GST rate cut on a range of renewable and clean energy products, including:

• Fuel cell motor vehicles, including hydrogen-based vehicles
• Solar cookers and solar water heating systems
• Photovoltaic cells (whether or not assembled in modules or panels)
• Solar power-based devices and generators
• Windmills and wind-operated electricity generators
• Biogas plants, waste-to-energy devices, and solar lanterns
• Ocean waves and tidal energy systems

Decision To Significantly Lower Project Costs

The decision to slash the GST rate to 5% is expected to significantly lower project costs for developers, improve financial viability, and push India’s transition to green energy. Furthermore, the GST reforms are likely to demand, draw investments, and help India move closer to its target of achieving 500 GW of non-fossil fuel capacity by 2030.

Making Renewable Projects Affordable

The GST rate cut is expected to make renewable projects in India more viable at a time when such installations are currently expensive. This will reduce the cost burden on developers, which they are likely to pass on to the customers.

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