• Recently, the Ministry of New and Renewable Energy released the draft guidelines for the central financial assistance and payment security mechanism for the ‘PM Surya Ghar—Muft Bijli Yojana’.

Key Highlights of the Draft Guidelines:

Scheme Models:

1. Renewable Energy Services Company (RESCO) Model: RESCO will develop and own the rooftop solar system on the consumer's property for at least five years. Consumers pay for the electricity generated, while RESCO handles operational expenditures and maintenance. RESCOs can also sell excess power to the grid through agreements with distribution companies (DISCOMs).
2. Utility Led Asset (ULA) Model: Here, the state DISCOM owns the solar systems for a minimum of five years, transferring ownership to households afterward.

• Central Financial Assistance (CFA): The scheme provides subsidies to households installing grid-connected rooftop solar systems, with eligibility extending to terraces, balconies, and elevated structures. However, households with pre-existing solar systems are excluded from the scheme.
• Payment Security Mechanism: A ₹100 crore corpus will be established to ensure payment security, ensuring financial stability for projects under the scheme.

Objectives of PM Surya Ghar—Muft Bijli Yojana:

• The scheme seeks to provide free electricity—up to 300 units per month—to households installing solar panels. It will boost the nation’s solar energy capacity, reduce carbon emissions, and promote green energy adoption across both urban and rural areas.

Implementation Mechanism:

• National Level: Managed by the National Programme Implementation Agency (NPIA).
• State Level: Managed by State Implementation Agencies (SIAs), primarily DISCOMs or Power/Energy Departments.

Subsidy Structure:

• 60% subsidy for solar systems up to 2 kW capacity.
• 40% subsidy for systems between 2 kW and 3 kW capacity.

Additional Features:

• Development of Model Solar Villages in each district to promote solar energy in rural areas.
• Incentives for Urban Local Bodies and Panchayati Raj Institutions to encourage rooftop solar installations.

Expected Benefits:

• Economic Gains: Households will save on electricity bills and have the opportunity to sell surplus power to DISCOMs. A 3kW system can generate over 300 units of electricity per month.
• Solar Capacity Growth: The scheme is expected to add 30 GW of solar capacity through rooftop installations, generating 1,000 billion units over 25 years.
• Environmental Impact: The initiative will reduce CO2 emissions by 720 million tonnes, supporting India’s environmental sustainability goals.
• Employment Generation: Around 17 lakh direct jobs are expected to be created across various sectors, including manufacturing, sales, and operations.

Challenges in Implementation:

• Household Reluctance: The provision of free electricity by several states could deter households from adopting solar panels.
• Space Constraints: Installation difficulties arise in households with limited space or uneven surfaces.
• Operational Strain on DISCOMs: The current net metering system could pose financial burdens on DISCOMs, as they become unpaid storage for homeowners generating energy during the day but drawing from the grid at night.
• Storage Integration: Lack of mandatory storage systems could lead to grid management challenges, like the "duck curve," which results from fluctuating electricity demand.

Government Initiatives to Promote Solar Energy: