PM Surya Ghar—Muft Bijli Yojana

The Ministry of New and Renewable Energy recently issued draft guidelines for the central financial assistance and payment security mechanism for the PM Surya Ghar—Muft Bijli Yojana. The scheme, approved by the Union Cabinet in February 2024 with a budget of Rs 75,000 crore, aims to benefit 1 crore families.

Key Highlights of the Draft Guidelines

Models:

1. Renewable Energy Services Company (RESCO) Model:

   1. RESCO develops and owns the rooftop solar system for at least five years.
   2. RESCO handles operational expenses and maintenance.
   3. Customers pay RESCO for the electricity generated, receiving net metering benefits.
   4. RESCO may sell power to the grid through a Power Purchase Agreement (PPA).

2. Utility Led Asset (ULA) Model:

   1. State DISCOM owns the rooftop solar systems for at least five years.
   2. Ownership is transferred to the household after the project period.

Eligibility for Central Financial Assistance (CFA):

1. Applies to grid-connected rooftop solar systems on residential properties (roofs, terraces, balconies).
2. Includes installations under group net metering and virtual net metering.
3. Excludes households with existing rooftop solar systems.

Payment Security Mechanism:

1. A Rs 100 crore corpus will be established, managed by a national program implementation agency to ensure financial stability.

What is PM Surya Ghar—Muft Bijli Yojana?

About:

1. A central scheme promoting solar rooftop systems with substantial financial subsidies and installation support.

Objective:

1. To provide free electricity to 1 crore households, offering 300 units per month.

Implementation Agencies:

1. National Level:
   1. Managed by the National Programme Implementation Agency (NPIA).
2. State Level:
   1. Managed by State Implementation Agencies (SIAs) such as Distribution Utilities (DISCOMs) or state Power/Energy Departments.

Role of DISCOMs:

1. Facilitate rooftop solar adoption, provide net meters, and oversee inspections and installations.

Subsidy Structure:

1. 60% subsidy for systems up to 2kW.
2. 40% subsidy for systems between 2kW to 3kW.

Additional Features:

1. Model Solar Villages: One in each district to promote rural rooftop solar adoption.
2. Incentives for Local Bodies: Urban Local Bodies and Panchayati Raj Institutions receive incentives to boost installations.

Expected Benefits

Economic:

1. Reduced electricity bills and potential income from surplus power sales.
2. A 3 kW system can generate over 300 units per month.

Solar Power Generation:

1. Expected to add 30 GW of solar capacity and generate 1000 billion units (BUs) over 25 years.

Environmental:

1. Reduction of CO2 equivalent emissions by 720 million tonnes.

Job Creation:

1. Around 17 lakh direct jobs across manufacturing, logistics, sales, installation, and maintenance.

Challenges in Implementation

1. Household Reluctance:

   1. Free electricity in many states may deter adoption of rooftop solar.

2. Restricted Space Use:

   1. Limited terrace space, uneven terrain, and other issues complicate the installation of smaller systems.

3. Operational Strain on DISCOMs:

   1. Financial burden due to net metering, with DISCOMs acting as unpaid storage.

4. Storage Integration:

   1. Lack of storage systems could exacerbate grid management issues, like the “duck curve.”

5. Quality Assurance:

   1. Difficulty in assessing the quality of installed systems and vulnerability to substandard services.

Other Government Initiatives to Harness Solar Energy

1. One Sun, One World, One Grid
2. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)
3. National Smart Grid Mission (NSGM) and Smart Meter National Programme
4. International Solar Alliance (ISA)
5. National Solar Mission
6. Solar Park Scheme
7. Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)

Way Forward

1. Targeted Beneficiary Outreach:

   1. Partner with local bodies to reach economically disadvantaged households consuming less than 200-300 units monthly.

2. Community Solar Projects:

   1. Develop projects allowing shared solar generation to benefit low-income and rural households.

3. Revise Net Metering:

   1. Explore Time-of-Use (TOU) pricing to manage grid strain from surplus solar generation.

4. Mandate Storage Integration:

   1. Make storage systems mandatory for rooftop solar installations to enhance grid stability and optimize solar energy use.

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