The government of India has recently announced new guidelines under the PM-Surya Ghar Muft Bijli Yojana to promote the installation of rooftop solar plants across the country. The aim of this initiative is to make solar power more accessible and affordable for consumers, enabling them to switch to renewable energy sources easily.
The Union Ministry of New and Renewable Energy has introduced new norms under two key components of the scheme – the 'Payment Security Mechanism' (PSM) and 'Central Financial Assistance' (CFA) for RESCO models and utility-led aggregation models.
Two Implementation Models: RESCO and ULA
The PM-Surya Ghar Muft Bijli Yojana offers two different implementation models to facilitate rooftop solar installations for households. The first is the RESCO model (Renewable Energy Service Company), which allows third-party entities to invest in rooftop solar installations. This model enables consumers to pay only for the electricity they use, without having to pay upfront for the installation.
The second model is the Utility-led Aggregation (ULA) model, where electricity distribution companies (discoms) or state-designated entities take the responsibility of installing rooftop solar projects for individual households in the residential sector. These models provide more flexibility for consumers, helping to reduce the barriers to adopting solar power.
Payment Security Mechanism (PSM) for De-risking Investments
To encourage investments in the rooftop solar sector, a Rs 100 crore corpus fund has been allocated for the Payment Security Mechanism (PSM). This fund is designed to reduce the risks for third-party investors and make the installation of grid-connected rooftop solar systems more secure. Additionally, this fund may be further supplemented with grants and other financial resources, subject to approval by the Ministry of New and Renewable Energy.
Aiming for One Crore Households by 2027
The ultimate goal of the PM-Surya Ghar Muft Bijli Yojana is to provide solar power to one crore households by March 2027. Since its launch in February 2024, the scheme has seen significant progress. With a budget of Rs 75,021 crore, the scheme has already resulted in 685,763 installations, achieving 86% of the target set a decade ago.
The demand for rooftop solar plants has been particularly high for the 3-5 kW load segment, which accounts for 77% of the installations. States like Gujarat, Maharashtra, Uttar Pradesh, and Kerala have seen the highest number of installations. Furthermore, over 1.45 crore registrations have been completed under the scheme, reflecting a growing interest in adopting renewable energy solutions.
The PM-Surya Ghar Muft Bijli Yojana also offers a 40% subsidy to eligible households, making it easier for people to invest in solar power systems and contribute to a greener and more sustainable future.