Cabinet okays ₹75,000-crore ‘free electricity’ solar scheme

CategoryYojana

Last Updated03/03/2024

Recently, the Union Cabinet approved the PM-Surya Ghar Muft Bijli Yojana with a budget of ₹75,021 crore.

The free electricity scheme was earlier announced by the Finance Minister in the interim budget speech.
Objective: To promote rooftop solar installations across India, promising 300 units of free electricity per month to one crore households.

The government guarantees no financial burden on the beneficiaries
- By providing significant subsidies directly to their bank accounts
- By offering highly concessional bank loans.
It will fund 60% of the installation cost for 2 kW systems and 40% for systems from 2-3 kW capacity.
Systems beyond 3 kW won't be eligible for central subsidies.
The remaining installation costs will be covered by households through collateral-free, low-interest loans, currently available at around 7%.

Provisions for developing a "Model Solar Village" in each district to showcase rooftop solar adoption in rural areas.
The Urban Local Bodies and Panchayats will be incentivised to promote rooftop solar systems in their jurisdictions.
Payment security for renewable energy service companies (RESCOs)
Dedicated funds for innovative projects in rooftop solar technology.

The scheme emphasizes the use of Indian-made solar panels and systems to boost local manufacturing.
Each public sector unit will engage with specific states to execute the programme, forming special purpose vehicles (SPVs) with private companies.

Savings up to fifteen to eighteen thousand rupees annually for households
- From free solar electricity and selling the surplus to the distribution companies
Charging of electric vehicles
Entrepreneurship opportunities for a large number of vendors for supply and installation
Employment opportunities for the youth with technical skills in manufacturing, installation and maintenance.