The Ministry of New and Renewable Energy recently introduced draft guidelines detailing the central financial support and payment assurance framework for the PM Surya Ghar—Muft Bijli Yojana. This scheme, approved by the Union Cabinet with an allocation of Rs 75,000 crore in February 2024, aspires to bring free electricity to 10 million families across India.
Key Aspects of the Draft Guidelines
The PM Surya Ghar—Muft Bijli Yojana introduces two operational models: the Renewable Energy Services Company (RESCO) model and the Utility-Led Asset (ULA) model. Here’s a breakdown:
Renewable Energy Services Company (RESCO) Model: Under this arrangement, a RESCO will install and own the rooftop solar system on a consumer’s property for a minimum duration of five years, overseeing all maintenance costs. Consumers pay for the electricity generated and receive a net metering benefit on their power bills. The RESCO may also partner with distribution companies (DISCOMs) to sell excess electricity back to the grid.
Utility-Led Asset (ULA) Model: In this model, the rooftop solar system is owned by a state DISCOM for a minimum of five years. Following this period, ownership is transferred to the household, further democratizing solar energy access.
Eligibility and Financial Assistance
The draft outlines that only grid-connected rooftop solar systems on residential structures—roofs, terraces, balconies, and similar elevated areas—will qualify for central financial assistance (CFA). Notably, properties with existing rooftop solar systems are ineligible under the RESCO and ULA models. To enhance project financial security, a corpus of Rs 100 crore will be established, providing stability to solar investors and operators.
Understanding PM Surya Ghar—Muft Bijli Yojana
The PM Surya Ghar scheme aims to streamline the adoption of solar rooftop installations, offering financial subsidies and simplified installation procedures to make clean energy accessible. Its goal is to provide one crore households with up to 300 units of electricity free of cost each month.
The scheme’s implementation will be carried out through dual agencies:
National Level: Governed by the National Programme Implementation Agency (NPIA).
State Level: Managed by State Implementation Agencies (SIAs), generally DISCOMs or energy departments of each respective state or union territory.
DISCOMs’ Role
As State Implementation Agencies, DISCOMs are responsible for making net meters available, conducting inspections, and ensuring timely project completion.
Subsidy Framework
The scheme offers tiered subsidies to reduce the financial burden of solar rooftop system installation, with a subsidy cap at 3 kW. Households installing systems up to 2 kW capacity are eligible for a 60% subsidy, while those with systems between 2 kW and 3 kW are entitled to a 40% subsidy.
Additional Program Highlights
- Model Solar Villages: Each district will see the establishment of a “Model Solar Village,” serving as an exemplary hub for rooftop solar energy in rural regions.
- Incentives for Local Bodies: Urban Local Bodies and Panchayati Raj Institutions will receive incentives to encourage rooftop solar adoption within their areas.
Projected Benefits of the PM Surya Ghar—Muft Bijli Yojana
This scheme brings a multitude of benefits, extending from economic upliftment to environmental preservation:
- Economic Relief: Households can decrease their monthly electricity bills while earning revenue by selling surplus power to DISCOMs. A 3 kW system can produce over 300 units of electricity monthly, covering a significant portion of energy needs.
- Expansion of Solar Capacity: The scheme anticipates an additional 30 GW of solar capacity via residential rooftop installations, cumulatively generating around 1000 billion units (BUs) of electricity over the 25-year life span of the systems.
- Reduction in Carbon Emissions: A projected reduction of 720 million tonnes of CO₂ emissions will contribute significantly to India’s sustainability goals.
- Job Creation: Approximately 1.7 million direct jobs could emerge across sectors like manufacturing, supply chain management, installation, and operations.
Challenges in Implementing the Scheme
Despite its benefits, several obstacles lie ahead in making PM Surya Ghar a widespread reality:
- Household Hesitancy: The availability of free electricity in some states and union territories may make households less inclined to adopt rooftop solar systems.
- Space Constraints: Limited rooftop space and shading issues pose challenges, especially in smaller homes or buildings.
- Financial Strain on DISCOMs: The current net metering system may impose financial burdens on DISCOMs, turning them into storage facilities for households that generate energy in the day but rely on the grid at night.
- Lack of Mandated Storage: Absence of required energy storage systems for rooftop solar installations may strain grid stability, leading to issues such as the “duck curve,” a demand pattern where grid load spikes as solar production wanes.
- Quality Control: Many consumers face difficulties in verifying the quality of installed systems, leaving them vulnerable to substandard products and services.
The PM Surya Ghar—Muft Bijli Yojana stands as a bold step in India’s pursuit of sustainable energy solutions, blending economic relief with environmental responsibility. The scheme’s success will depend on strategic implementation, inclusive outreach, and continuous innovation to ensure rooftop solar energy truly transforms millions of Indian households. For more you can visit C-Fritts Power, leading solar panel company in Kolkata.