Context

• The Ministry of New and Renewable Energy (MNRE) has now decided to issue clarification regarding Central Financial Assistance (CFA) under PM Surya Ghar for residential societies.

PM Surya Ghar—Muft Bijli Yojana

• Objective: 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