The Union Cabinet today approved the “PM Surya Ghar: Muft Bijli Yojana”, a rooftop solar scheme aimed at installing solar panels on the rooftops of 10 million households. The beneficiaries of this scheme will receive free electricity of up to 300 units per month. This initiative, with a substantial allocation of Rs 75,021 crore, marks a pivotal moment in India”s renewable energy journey.

Anurag Thakur, Minister of Sports, Youth Affairs, and Information and Broadcasting, announced that the scheme offers a substantial Central Financial Assistance, covering up to 60 percent of the system cost. “The scheme provides a Central Financial Assistance of 60 percent of system cost for 2 kW systems and 40 percent of additional system cost for systems between 2 to 3 kW capacity. The CFA will be capped at 3 kW. At current benchmark prices, this will mean Rs 30,000 subsidy for 1 kW system, Rs 60,000 for 2 kW systems and Rs 78,000 for 3 kW systems or higher,” the government said.

Through a streamlined process facilitated by the National Portal, households can apply for subsidies and select suitable vendors for installing rooftop solar systems. The portal offers resources such as system size recommendations, a benefits calculator, and vendor ratings to aid in decision-making. These households will be able to access collateral-free, low-interest loan products of around 7 percent for residential rooftop solar systems of up to 3 kW.

Under the ambit of the scheme, the government aims to establish “A Model Solar Village” in each district to serve as a role model for adoption of rooftop solar in rural areas, the government said.

Finance Minister Nirmala Sitharaman had earlier highlighted the potential for substantial annual savings ranging from Rs 15,000 to Rs 18,000 for households embracing rooftop solar systems. On February 13, PM Modi renamed the new rooftop solar scheme as “PM Surya Ghar: Muft Bijli Yojana”. He said the initiative, with an investment of over Rs 75,000 crore, would provide up to 300 units of free electricity every month.

While a residential rooftop solar scheme existed previously, it has now been enhanced with updated guidelines and incentives. The Ministry of New and Renewable Energy (MNRE) had initiated the “Rooftop Solar Programme Phase-II” to achieve 4,000 MW of rooftop solar capacity in the residential sector. As of November 2023, 2,651.10 MW of capacity had been installed in this phase.

The government will identify households consuming up to 300 units of electricity per month, who may qualify for free rooftop solar installations.

“We will also go beyond Pradhan Mantri Awas Yojna to identify houses that consume up to 300 units electricity a month. The scheme is being designed in such a way that such households will not have to pay anything for the rooftop solar installations,” Union minister for power and new and renewable energy RK Singh told reporters on February 2.

To facilitate the implementation of the scheme, eight central public sector undertakings (CPSUs) have been tasked with reaching 10 million households across states and union territories. It”s important to note that applications submitted before February 13, 2024, will adhere to the previous subsidy framework, while the new scheme offers enhanced benefits, including a minimum subsidy of Rs 30,000 for 1-kW systems.

This initiative aligns seamlessly with India”s ambitious goal of generating 500 GW of renewable energy by 2030. The surge in solar energy capacity additions, nearly doubling from 6,510 MW in 2019-20 to 12,760 MW in 2021-22, underscores the nation”s commitment to sustainable energy solutions.