PM Surya Ghar Muft Bijlee Yojana

PM Surya Ghar Muft Bijlee Yojana

Recently, the Ministry of New and Renewable Energy introduced draft guidelines for the PM Surya Ghar-Muft Bijli Yojana, a central scheme aimed at promoting rooftop solar adoption and providing free electricity to 1 crore families. The Rs 75,000 crore initiative, approved by the Union Cabinet in February 2024, aims to reduce electricity bills and foster sustainability through solar energy.

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Key Highlights of the Draft Guidelines

1. Model Types:
   • Renewable Energy Services Company (RESCO) Model: In this model, a private entity develops and owns the rooftop solar system for a minimum of 5 years, covering maintenance costs. Consumers pay the RESCO based on the electricity generated, receiving net metering benefits. The RESCO can sell excess power to the grid under a Power Purchase Agreement with a distribution company (DISCOM).
   • Utility-Led Asset (ULA) Model: A state-run DISCOM owns the solar system for at least 5 years. After this period, ownership is transferred to the household.
2. Eligibility for Central Financial Assistance (CFA):
   • Eligible for grid-connected rooftop solar systems on residential properties such as rooftops, terraces, and balconies.
   • Installations under mechanisms like group net metering or virtual net metering are included.
   • Households with existing rooftop solar systems are excluded from the scheme.
3. Payment Security Mechanism:
   • A Rs 100 crore payment security corpus will be set up, ensuring financial stability and protecting the solar projects from payment defaults.

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What is PM Surya Ghar-Muft Bijli Yojana?

1. About the Scheme:
   • A central government initiative designed to promote rooftop solar installations by offering financial subsidies and facilitating easy installation processes.
2. Objective:
   • The scheme aims to provide free electricity to one crore households. Participating households will receive 300 units of electricity free per month.
3. Implementation:
   • National Level: Managed by the National Programme Implementation Agency (NPIA).
   • State Level: Managed by State Implementation Agencies (SIAs), typically the DISCOMs or state Power Departments.
   • Role of DISCOMs: DISCOMs will assist with net metering, inspection, and timely commissioning of installations.
4. Subsidy Structure:
   • The scheme offers subsidies based on system capacity:
     • 60% subsidy for systems up to 2 kW.
     • 40% subsidy for systems between 2 kW to 3 kW.
   • The subsidy is capped at a 3 kW capacity per household.
5. Additional Features:
   • Model Solar Villages: A demonstration project in each district to encourage rooftop solar in rural areas.
   • Incentives for Local Bodies: Urban and rural local bodies will receive incentives for promoting rooftop solar installations.

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Expected Benefits of the Scheme

1. Economic Benefits:
   • Households will save on electricity bills and may earn additional income by selling surplus energy back to the DISCOMs.
   • A 3 kW system can generate over 300 units of electricity per month, covering the electricity needs of households.
2. Solar Power Generation:
   • The scheme aims to add 30 GW of solar capacity through residential rooftop installations, contributing significantly to India’s clean energy goals.
   • Expected to generate 1000 billion units (BUs) of electricity over the systems' 25-year lifetime.
3. Environmental Impact:
   • It will reduce CO2 emissions by 720 million tonnes, significantly contributing to environmental sustainability.
4. Job Creation:
   • Around 17 lakh direct jobs are expected in sectors such as manufacturing, installation, and operations and maintenance (O&M) related to rooftop solar systems.

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Challenges in Implementing the Scheme

1. Household Reluctance:
   • Many households may be reluctant to adopt rooftop solar due to free electricity provided by some states and union territories, making the scheme less attractive.
2. Space Limitations:
   • Limited roof space, uneven terrain, shading, and property-related issues may restrict the installation of solar systems, particularly for 2-3 kW systems.
3. Operational Strain on DISCOMs:
   • The existing net metering system places financial strain on DISCOMs, which already face losses. The daytime energy generation by households often doesn't match the night-time demand, making DISCOMs essentially unpaid storage for solar energy.
4. Storage Integration:
   • The lack of storage systems alongside rooftop installations could lead to grid management issues, especially when excess solar energy is generated during the day and not used, causing grid instability (the "duck curve").
5. Quality Assurance:
   • A common challenge is the quality of installations, as customers may struggle to assess the reliability and long-term performance of solar systems, leading to dissatisfaction and vulnerability to substandard service providers.

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Other Government Initiatives to Harness Solar Energy

1. One Sun, One World, One Grid: A global initiative to create a unified solar grid across countries.
2. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA): To provide electricity connections to every household.
3. National Smart Grid Mission (NSGM): Focuses on the development of a smart grid infrastructure.
4. International Solar Alliance (ISA): Promotes solar energy internationally.
5. National Solar Mission: Aims to promote solar energy in India.
6. Solar Park Scheme: To develop large-scale solar parks.
7. PM-KUSUM: Aimed at supporting farmers with solar power for agricultural use.

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Road Ahead

1. Targeted Outreach:
   • Ensure that economically disadvantaged households are reached, particularly those who consume less than 200-300 units of electricity per month.
2. Community Solar Projects:
   • Promote shared solar energy generation from central plants, especially for low-income and rural households that cannot install their own rooftop solar systems.
3. Revise Net Metering:
   • Implement pricing models like Time-of-Use (TOU) to better manage grid demand and surplus solar energy.
4. Mandate Storage Integration:
   • Ensure that storage systems are integrated with rooftop solar systems to enhance grid stability and optimize energy use.

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Key Takeaways
The PM Surya Ghar-Muft Bijli Yojana is a significant step toward solar energy adoption, but addressing the outlined challenges will be crucial for its success in providing clean, affordable energy to millions of households across India.

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