Cabinet approves PM Surya Ghar: Muft Bijli Yojana scheme for installing rooftop solar in 10 million households

The government added that households will apply for subsidy through the National Portal and will be able to select a suitable vendor for installing rooftop solar.

"The National Portal will assist the households in their decision-making process by providing relevant information such as appropriate system sizes, benefits calculator, vendor rating etc," the government said.

Households will be able to access collateral-free low-interest loan products of around 7 percent at present for installation of residential RTS systems up to 3 kW.

Under the scheme, 'A Model Solar Village' will be developed in each district of the country to act as a role model for adoption of rooftop solar in rural areas, the government said.

Finance Minister Nirmala Sitharaman on February 1 as part of her speech for the Interim Budget had said that the new scheme could result in savings of Rs 15,000-18,000 annually for households that install 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.

To be sure, a residential rooftop solar scheme was already in place, which has now been upgraded with new guidelines and incentives.

The Ministry of New and Renewable Energy (MNRE) had launched the old 'Rooftop Solar Programme Phase-II' on March 8, 2019, with the objective of achieving 4,000 MW of rooftop solar capacity in the residential sector by providing subsidy or central financial assistance.

As of November 2023, the capacity installed under Phase-II of the scheme was 2,651.10 MW.

As per Union minister for power and new and renewable energy RK Singh, the government will identify households that consume up to 300 units of electricity a month for the new rooftop solar scheme.

More importantly, such households may not have to pay for solar installations on their rooftops. Singh said those who were allotted low-income houses under the Pradhan Mantri Awas Yojna could be considered.

"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," the minister told reporters on February 2.

The government has appointed eight central public sector undertakings (CPSUs) to implement the scheme in 10 million households across states and union territories.

Earlier this month, the MNRE clarified that residential rooftop solar applications submitted before February 13, 2024, will not be eligible for central financial assistance under the new scheme. They will be eligible for subsidies only under the old regime.

The biggest difference between the new scheme when compared to the old scheme is that the minimum subsidy for anyone installing a 1-kW rooftop solar system under the new scheme will be Rs 30,000, an increase from Rs 18,000 earlier.