Revamping the PM-Surya Ghar Muft Bijli Yojna: A Shift in Strategy

The Indian government's initiative to promote rooftop solar installations under the PM-Surya Ghar Muft Bijli Yojna (Prime Minister’s Rooftop Solar: Free Electricity Scheme) comes against the backdrop of escalating concerns over climate change and the urgent need to transition towards cleaner energy sources.

1: Dimension: Scheme Modifications

• Revised Subsidy Model: The ?75,000-crore PM-Surya Ghar Muft Bijli Yojna, initially intended to fully subsidize the installation of 1-3 KW solar systems in one crore households, has undergone significant alterations. The scheme now offers a subsidy covering up to 60% of the installation costs, requiring participating households to contribute the remaining amount.
• Financial Implications: Households availing the scheme's benefits will be required to make a minimum contribution, with the balance amount covered by low-interest, collateral-free loans. This strategic shift aims to foster greater consumer involvement and financial responsibility while ensuring the sustainability of the scheme.

2: Dimension: Operational Framework

• Net-Metering Mechanism: Through a system of net-metering, surplus solar power generated by households can be fed back into the grid, offsetting their electricity bills. This innovative approach not only encourages renewable energy adoption but also offers the potential for households to earn income through excess energy production.
• Enhanced Service Delivery: The revamped scheme emphasizes streamlined service delivery, leveraging digital platforms for seamless application processes and installation procedures. By minimizing bureaucratic hurdles, the scheme aims to expedite the deployment of rooftop solar systems across eligible households.

3: Dimension: Financing Mechanism and Subsidy Structure

• Collateral-Free Loans: Twelve public sector banks are set to offer collateral-free loans to eligible households seeking to install rooftop solar systems. With an interest rate marginally above the prevailing RBI repo rate, this financing mechanism aims to make solar adoption financially accessible to a wider demographic.
• Doubling of Subsidy: The scheme witnesses a substantial increase in rooftop solar subsidy rates, doubling the previous subsidy amount per kilowatt. This enhanced financial support is poised to incentivize greater uptake of rooftop solar installations, thereby accelerating India's transition towards renewable energy.

4: Dimension: Projected Impact and Future Prospects

• Scale-Up Strategy: The revised scheme targets the installation of rooftop solar systems in one crore households over the next three years, representing a significant scaling up of India's rooftop solar capacity. By expanding the reach of renewable energy infrastructure, the scheme holds the potential to substantially reduce carbon emissions and mitigate environmental impact.
• Boosting Domestic Manufacturing: By stipulating that only solar panels manufactured by the Indian industry are eligible for subsidies, the scheme aims to bolster domestic manufacturing capacity. This strategic emphasis on indigenous production aligns with broader objectives of promoting self-reliance and sustainability in the renewable energy sector.